By Chuck Leddy
Revenue Operations isn’t a new technology. It’s a strategic approach in B2B that aligns revenue-impacting functions (marketing, sales, customer service, and beyond) in order to create a revenue engine that drives growth. Julian Archer, Senior Research Director at Forrester (which acquired SiriusDecisions in early 2019), will be speaking on the topic (along with Anthony McPartlin) at the SiriusDecisions Summit Europe on October 10. We spoke with Archer recently about what revenue operations is, what’s been driving the trend, and how B2B organizations can begin implementing RevOps. What follows is an edited version of our conversation.
How do you define “revenue operations”?
Archer: The revenue engine is the combination of people, processes, and tech that drive the conversion of prospects to customers and maximize the lifetime value of customers. Revenue operations actually brings together the requirements from marketing ops, sales ops, and either customer success or customer operations. They all need operational support. Revenue operations is the strategic operational alignment of all the operational resources that organizations need to drive that revenue engine.
What’s been driving the trend towards RevOps?
Archer: There are external elements now in the way people buy, including more complexity and speed around the buying process. We’ve seen the digitization of the customer journey, which has brought greater emphasis on the customer. So much data is now available to generate insights.
On the company side, CEOs are asking “why am I investing in a technology stack and processes that are in silos, not shared by all functions?” The ability to work together through technology is certainly one of the driving factors. We as a B2B marketing community have gone too far in thinking that the lead is everything. We know that the buyer’s journey in a B2B environment is built around the buying group, individuals who come together to make a purchase on behalf of a buying center. Far too often, we see the breakdown in process between marketing and sales.
How can marketing and sales align for revenue operations?
Archer: We’ve got two issues coming together. Marketing does not speak the language of sales. And sales does not understand what happens before an opportunity or lead reaches them. There can be a lot of finger pointing and misunderstanding on both sides. Revenue operations encompasses the entire process from beginning to end. It starts the process at the very beginning, with target demand, sales and marketing and product, all understanding each other and aligned. That way, we all know what customers we’re going after, and everybody’s using the same record, a single source of truth to communicate information.
Why is alignment such a perennial challenge?
Archer: Because as humans we’re all silos, we all have different challenges, different time horizons, different targets and metrics. There is a lack of understanding about what each function does. You can ask a salesperson where an opportunity came from and they’ll say “I just found it.” On the other hand, marketers will say, “I got that lead, and my job is done.”
Revenue operations offers cross-functional understanding and an aligned strategy with sales and marketing and beyond. We all understand why we’re doing this: it’s really around creating an aligned customer experience from the beginning all the way through the funnel and beyond.
What else does RevOps require?
Archer: There’s cross-functional planning. We always say that marketing should involve sales in campaign planning, but why doesn’t that happen more? The infrastructure needs to support coordination: there are sales-oriented technologies and marketing-oriented technologies, but there are also many overlaps like the CRM system, like data management.
Then there’s people. For RevOps to work, HR needs to think about the competencies needed, including collaborative mindsets, as well as the development and enablement of people for RevOps. It’s a different scenario if you’re looking at the entire revenue engine rather than just an individual function.
How might organizational structures need to change to support RevOps?
Archer: There are four major org structures that might come into play. The first one is quite straightforward: we’re doing nothing, status quo. Number two is where there’s some alignment between marketing and sales around data governance, but they don’t really cooperate with each other. So let’s call that status quo on steroids, where you’re actually working together under an agreed process from beginning to end, but you’re still separate departments.
The third structure is where you still keep sales and marketing ops separate, but actually take out some of their functions or tasks and put them into a center of excellence, maybe around things like analytics or data management. That could become a stepping stone to the fourth structure, which is a centralized function reporting to the CRO [Chief Revenue Officer]. We did some surveys, asking about 200 organizations. Around 18% said they’ve got no revenue operations functions at all. Then 40% of them have the second structure, status quo on steroids. Then there’s another 18% with that limited centralization. And then finally 15% are in that fourth structure, centralized under a CRO.
What results are those with a centralized function under a CRO seeing?
Archer: They’re seeing their average sales cycle come down by almost a month. They’re seeing deal sizes increase. They also have the technology and the processes in place to better measure success, another important factor. It’s still early days, so we don’t have complete, definitive results yet.
What steps should B2B organizations be taking to increase their RevOps maturity?
Archer: Look at the areas inside sales, customer, marketing operations that blend into each other, like a Venn diagram. Areas like data, analytics, getting that single source of truth from which to generate your marketing reports, your sales reports. That in itself is a major step forward. You should also develop a common language and common data as well. Sit in a room and work with sales ops and marketing ops to clearly understand what each other does. Sales are absolutely quarterly driven, so the urgent always outweighs the important. Marketing folks know the importance of setting up long-term planning.
What helps is having an executive team who recognizes the importance of data and insights based on data. Then you need joint metric selection. HR issues may also come into play in developing an environment of experimentation. Lastly, don’t just do revenue operations because it’s trendy and because rivals are doing it. Understand your why and then plan accordingly.
Attending SiriusDecisions Summit Europe in London this week, October 10-11? Please visit the Sojourn Solutions team in Booth 3 to continue this conversation, or start another based on your business challenges. Feel free to contact us directly with any comments or questions.
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