Revenue Operations: What Is It and Why Do You Need It?

person looking at revenue operations information on a laptop

Ever since the technology that allowed for the creation of advanced selling systems emerged, the process of generating revenue and increasing its growth in the 21st century has changed significantly. The model for commerce has progressed to the point where traditional systems for managing processes, people, and assets have become inadequate in terms of supporting revenue growth.

However, companies have adapted to the changing times. The word “revenue” has been used a lot recently with job titles like chief revenue officer being one of the most in-demand jobs in 2020.

One of the hottest focus areas for companies is revenue operations, or RevOps.

a person reviewing their revenue operations on their computer

What Is Revenue Operations (RevOps)?

Revenue operations, simply called RevOps, is an approach in commerce that puts the priority on aligning sales, marketing, and customer success operations. The main goal of RevOps is to provide buyers with a stable process throughout their entire user or buyer journey. It’s also designed to promote growth by improving efficiencies in operations across the company.

RevOps works by breaking down the barriers between the departments mentioned above. It then brings them together under one umbrella so that they can work seamlessly and harmoniously.

With central RevOps in place, an organization can enjoy the benefits of data transparency and fluidity across various departments. A RevOps structure also ensures that each area of the company is in line to move people through the buying journey fluidly and cohesively.

However, revenue operations isn’t just about converting customers – it’s also about maintaining a positive relationship with buyers. This approach is designed to encourage repeat customers who will continue to bring in constant revenue for the company as well as share their positive experience with others.

Why Does RevOps Matter?

RevOps matters because it keeps both sales and finance departments connected and working harmoniously to grow revenue. This is particularly crucial these days as organizations become more complex with the multiple systems they have in place.

Smart companies today use multiple channels that allow customers to purchase across them seamlessly. Although this may be designed to improve overall revenue, it can be tricky to manage all of them at once.

A business can have at least three of the sales channels below:

  • E-commerce

  • Direct sales

  • Channel sales

  • Services

  • In-product selling

  • Retail

  • Third-party marketplace

Businesses could also be employing new revenue models while allowing customers to choose their preferred models for themselves. A company can have at least two of the different revenue models below:

  • Subscriptions

  • Consumption and usage pricing

  • One-time sales

  • Milestone-based billing

Customers go through a revenue lifecycle that involves purchasing, selling, and billing. The traditional approach would be to shape the entire process based on the channels and revenue models used.This technique may work when you only have two or three different offerings, but it can be more complicated the more you scale. Disconnected revenue processes are a common occurrence that companies face when they increase their offerings.

The solution to this dilemma is to put everything under one roof. Bringing the sales and finance teams together through a single revenue process can make the overall approach more efficient and effective. When done well, the revenue process can lead to business intelligence, increased visibility, and advanced automation.

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KPIs for RevOps

Revenue operations are all about driving revenue growth, mostly through predictable revenue streams. The following are the primary key performance indicators (KPIs) for RevOps:

RevOps KPI #1: Revenue

As mentioned above, the central focus of revenue operations is to generate and increase business revenue. If revenue growth isn’t present, then the RevOps strategy can be considered a failure.

What exactly should you look for when you want to measure revenue? A company’s KPIs should be based on your industry and a specific period of measurement in order to give measurable results.

For instance, annual recurring revenue is an ideal approach in measuring revenue growth for Software as a Service (SaaS) brands while average revenue per user is preferred by those in the telecommunications niche. Meanwhile, a common model in the e-commerce sector is monthly recurring revenue.

As revenue sources are identified, you need to determine if the revenue is coming from new buyers, returning consumers, or any other area that could bring in money.

When you can determine how these changes throughout the business affect your overall revenue, you can begin calculating the real revenue growth of your company.

RevOps KPI #2: Revenue Retention

Knowing the level of satisfaction that your customers have with your business is important. As you analyze revenue retention for your brand, you want to prioritize both gross and net retention rates.

These two will provide you with crucial information on how your company is growing.

Gross retention revenue is all about the total percentage of recurring revenue that has been acquired from existing customers. This can include all cancelations or downgrades for products or services used.

Meanwhile, the net retention revenue is the measurement of the gross including added revenue. This comes by way of new customers or simply called “expansions.”

When you can measure your revenue retention successfully, you can easily understand whether or not your customers are still interested in your offerings.

RevOps KPI #3: Customer Churn

The customer churn of your business is a measurement of existing users who no longer use your products or services within a specified time.

All companies experience customer churn no matter the effectiveness of their customer retention strategies. The best approach to counteract it would be to keep as many consumers as possible while implementing a reliable RevOps strategy.

RevOps KPI #4: Sales Pipeline Velocity

Your overall sales cycle can be shortened when you incorporate a structured sales process or sales pipeline into your company. When this happens, you can typically improve the speeds at which you process deals that go through your sales team. It also increases the probability of converting more of your leads into customers.

When analyzing your metrics, one of the most important aspects to consider is pipeline velocity since it plays a key role in driving revenue growth. That’s why all of your revenue operations groups should incorporate sales enablement tactics. These methods are designed to positively affect the probability of prospects becoming qualified leads.

Another important factor is that sales teams need to deeply understand the pain points of their buyer persona. This should include the main reasons why they wish to buy a certain product or service. These teams should also learn the common issues that can hinder prospects from leveling up to become customers.

By following a similar approach, your organization can start formulating ways to resolve most of your prospects’ concerns, convert them to paying customers, and drive revenue growth.

RevOps KPI #5: Cost of Customer Acquisition

Customer acquisition is one of the metrics that an organization spends in its marketing efforts to obtain new customers. Companies need to invest in their marketing and sales teams heavily if they want to work on attracting the right type of people to their brands.

Organizations capable of aligning their solutions, marketing message, company branding, and acquisition efforts have a greater chance of attracting prospects and converting them into customers than those that do not.

After a RevOps team has identified their company’s cost of customer acquisition, they can start identifying the right strategies to help them retain customers and which do not.

What Is a Chief Revenue Officer (CRO)?

At the center of the standard RevOps team is a chief revenue officer (CRO). As one of the c-suite executives, this person is one who has significant experience and responsibility in driving company revenue.

A CRO is the main person who supervises the workings of a RevOps team. They are the one who creates and ensures alignment between all the other departments that are part of generating revenue for a company. When the marketing, sales, and customer service teams are aligned, organizations have a better chance of being effective and maximizing profitability.

Since revenue generation depends on the customer, the role of the CRO is to incorporate a customer-first mindset in all of their business decisions. Although they have distinct similarities, a chief revenue officer isn’t the same as a person working as a vice president of sales.

What Is the Job of a CRO?

The primary responsibility of a chief revenue officer is in overseeing all activities performed by a business that affects its streams of revenue. This can be anything from the customer success aspect to the way it markets a product.

A CRO ensures that all revenue departments work under one umbrella and follow the same processes set forth beforehand. They promote alignment between teams to increase overall company profitability while using business intelligence to make informed decisions.

Depending on the organization, the specific duties of the CRO will vary according to their needs and requirements. However, the chief revenue officer has some general responsibilities, which include:

  • Creating and ensuring all revenue teams are aligned and that everyone collaborates harmoniously with each other.

  • The CRO works personally with all of the department leaders.

  • They leverage business data to make their decisions while defining their strategies based on these insights.

  • A CRO defines its company’s relevant KPIs using business intelligence and communicates these objectives with all teams involved.

  • They provide all of these departments with the resources, technologies, and tools necessary for everyone to succeed in their roles.

  • The CRO will be the one to communicate with all other company executives and stakeholders concerning the organization’s revenue stream performance.

Besides the general responsibilities, the chief revenue officer also has these marketing and product responsibilities:

  • A CRO uses business information to pinpoint segments in the market that can help their company bring in the most revenue. They also guide them in carrying out strategic marketing processes that resonate with the needs of their target market.

  • They work in tandem with the relevant product and marketing team leaders to ensure everyone is on the same page.

  • The CRO checks to make sure that all of their campaigns are on the right channels and that their teams are implementing impactful messaging.

  • They assess business information and keep track of campaign performance metrics to see how successful their company is in terms of generating revenue.

  • A CRO utilizes data so that it can immediately identify key areas for business growth that can immediately impact the way its company generates revenue.

  • They make sure that their offerings are sold on the most appropriate and relevant markets possible.

  • The CRO supervises the entire product development lifecycle to ensure that any new products or updates pushed on the market cater to the changing needs of their customers.

Finally, the CRO also has the following responsibilities with regards to sales:


  • A CRO makes sure that the sales department under them knows the true value propositions they give to their target audiences while ensuring constant revenue generation.

  • Creates and updates all of the company’s sales playbooks to ensure that all of them are customer-centric.

  • CROs keep track of their department’s sales performance to see how the company fares.

  • They are adept at identifying new areas of business opportunity that can help grow revenue and which areas are problematic and should be avoided.

RevOps for the Future

The vision of revenue operations is all about creating a unified team that operates through the same processes to generate revenue for an organization. When applied correctly, RevOps is capable of providing a consistent experience to all customers, thus leading to repeat customers and revenue growth.

You might feel overwhelmed with the idea of adopting the RevOps approach but remember, the goal of RevOps is simply unifying everything you already have in place. The revenue operations mindset is leveraging the power of alignment on all revenue departments while ensuring all processes are customer-centric.

This is the first important step that will help you identify which aspects of the business need improvement. Everything else will fall in place once the proper alignment of the RevOps team has been achieved.

Shifting to a RevOps focus for you company can start moving it forward and develop growth-minded teams that only have a single goal in mind — generating more revenue for the business and a customer-focused vision.

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