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How Can I Define Revenue Operations?

As organizations transition away from traditional sales operations, Revenue Operations roles have become the fastest growing category on LinkedIn. Still, Rev Ops means different things at different companies and in different industries. Sometimes, Rev Ops even means different things within single companies!

This blog explores the first step in developing Revenue Operations maturity in your organization, and shares how Rev Ops Leaders, Rev Ops Beginners and Rev Ops Laggards tend to behave.

3 Critical Questions to Define Revenue Operations 

Every organization's journey to Revenue Operations maturity begins with three important questions. The following questions are designed to help you define your Rev Ops motion.  

  1. Do we have a defined function and strategy for Revenue Operations?
  2. What Chief Executive will own Rev Ops at our company? 
  3. Which functions will Revenue Operations own? 

In the next section, we’ll dive into the answers that are common to these three questions—and highlight which answers we see characterize the most mature and effective Rev Ops organizations. 

The 5 Pillars That Your Definition for Revenue Operations Requires

Following are the Five Pillars that every organization must assemble as it creates its definition for Revenue Operations. 

  1. Document a Revenue Operations strategy.
    Organizations generally define and document their company’s strategy for Revenue Operations before appointing a Rev Ops leader. The process ensures accountability and synchronizes activity across teams because it equally involves marketing, sales, and customer success—and often, sales enablement and product.
  • Laggards do not have a defined or documented strategy.
  • Beginners have a defined Revenue Operations strategy only.
  • Leaders have a defined and documented Revenue Operations strategy.

Once you’ve defined your strategy, the next step is to find a Rev Ops leader.

  1. Appoint a head of Revenue Operations.

Only after organizations codify their Revenue Operations strategy is it customary to formalize the function by appointing a leader.

  • Laggards cannot designate a Revenue Operations function, because they don’t have a defined strategy.
  • Beginners have defined Rev Ops strategies but lack a designated owner. 
  • Leaders have designated owners for their documented Rev Ops strategies.

Of course, a critical part of appointing—or hiring—a leader for Revenue Operations is determining who his or her manager will be. That leads us to the next pillar.

  1. Mature your Revenue Operations’ reporting structure.

Revenue Operations tends to report to one of several executives on the leadership team, whether at a Chief or Vice President level: The Chief Executive Officer, or the Chief or VP of Finance, Marketing, Revenue, or Sales.

  • In Laggard organizations, Revenue Operations tends to report to Sales—if Rev Ops even exists. In unusual circumstances, Marketing owns the function.
  • Beginners, meanwhile, operationalize their reporting structure to reflect their understanding that Revenue Operations is not sales operations. Revenue Operations reports to the Chief Executive or Chief/VP of Finance at Beginner organizations.
  • Leader organizations are sophisticated enough to employ a Chief Revenue Officer (CRO) or Vice President of Revenue to own Revenue Operations. 
  1. Give Revenue Operations ownership of all revenue teams.
    By definition, Revenue Operations should support marketing, sales, and customer success or client support—and often, even product and sales enablement. All three teams contribute to the revenue capture lifecycle and, when coordinated operationally, significantly contribute to revenue. 

However, recent research shows that Marketing is the function least managed by CROs, who are 2.9X more likely to manage sales than marketing and 1.6X more likely to manage sales than customer success. 

  • As such, Laggards treat Revenue Operations as a sales motion, and the function oversees only Sales. 
  • Beginner organizations give Revenue Operations purview over Sales and one other revenue function, be it Marketing or Customer Success.
  • Leader organizations assign ownership of all three teams—Marketing, Sales, and Customer Success—to Revenue Operations. They also tend to involve Product and Sales Enablement.

Analysts emphatically agree on the revenue impact of a healthy, mature revenue operation—estimating the impact of synchronized Marketing, Sales, and Customer Success motions to have the power to triple revenue. 

  1. Address existing bias. 

How an enterprise defines Revenue Operations is also apparent in existing biases about the Rev Ops function within the company. 

  • Laggards demonstrate strong preference for one revenue team—generally Sales—above the other two. These biases are generally apparent in prioritized goals and Key Performance Indicators (KPIs), as well as subjective attitudes about the relative importance of each revenue team.
  • Beginners demonstrate a lingering bias toward one or two revenue departments over the other(s). 
  • Leaders prioritize all revenue motions equally.

It's important to be conscious of the biases you want to avoid as you define what Revenue Operations means for you. Once you’ve decided your definition, you may want to consider explicitly socializing your company’s new definition of Revenue Operations. 

Having a good definition for Revenue Operations is the first step in making sure you set the function up for success in your company. 

 

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