Revenue Operations vs Sales Operations: A Strategic Overview
Revenue Operations has the potential to boost both efficiency and revenue on a company-wide scale.
- September 18, 2023
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Revenue Operations and Sales Operations: A Strategic Overview
Numerous businesses already possess a sales operations unit tasked with enhancing the effectiveness of their sales teams. However, the concept of Revenue Operations (RevOps) may still be unfamiliar to some.
Revenue Operations has the potential to boost both efficiency and revenue on a company-wide scale.
Whereas sales operations are largely confined to improving sales functions, Revenue Operations takes a more holistic approach. It encompasses areas such as sales,marketing, customer success and finance. By adopting a Revenue Operations model, a company focuses on wider aspects of revenue generation including marketing and customer success processes, in addition to what sales ops would traditionally do. As a result, the revenue operations function has a greater influence on helping the company deliver to its revenue targets.
What is Revenue Operations?
Revenue Operations, often abbreviated as RevOps, serves as a unified strategy for managing all revenue-generating sectors within your business. This primarily includes the sales, marketing, and customer success departments, starting from lead nurturing and pipeline generation to SDR outreach efficiency to customer churn and expansion sales. In the past, these divisions often operated in isolation, sometimes even in a manner that was counterproductive or competitive with one another. Revenue Operations aims to break down these existing silos or to prevent them from forming in newly established businesses.
Rather than focusing narrowly on specific phases of the customer journey, such as lead generation (handled by marketing) or post-purchase support (managed by customer success), Revenue Operations adopts a more comprehensive view. It emphasizes the entire customer lifecycle, making revenue growth its chief concern. Key elements within the Revenue Operations framework encompass:
- Managing pipeline coverage gap and revenue attribution
- Setting and projecting sales and marketing targets
- Tracking core revenue metrics such as win rate, average sales cycle, pipeline velocity and ASP
- Onboarding new clients and promoting upsells
- Analyzing and reducing customer attrition
- Implementing customer retention tactics
What is Sales Operations?
Sales operations exist as a specialized facet within the broader scope of Revenue Operations (RevOps), though it is its own unique operational area. The primary goal of Sales Operations, or SalesOps, is to empower sales representatives to operate more effectively, swiftly, and strategically. The SalesOps team is responsible for developing and evaluating sales strategies, generating leads, leveraging technology tools that aid in sales, monitoring performance metrics, and handling various operational responsibilities like contracts, commissions, training, and recruitment.
It’s crucial to recognize a key distinction when comparing Revenue Operations
and SalesOps: While Revenue Operations is geared towards monitoring and influencing the overall customer journey and end-to-end revenue engine, SalesOps zeroes in on the conversion aspect of the sales process.
Distinguishing Between Revenue Operations and Sales Operations: Key Differences Explained
Scope and Objectives
Sales operations and revenue operations differ primarily in their areas of concentration and objectives. While sales operations is dedicated to streamlining the sales function alone, revenue operations adopts a comprehensive approach that encompasses the entire revenue-generating cycle. Sales operations aims to enhance the efficiency of the sales team, whereas revenue operations seeks to maximize revenue growth by coordinating multiple departments.
Structure of Team and Collaboration
Sales operations and revenue operations teams have different make-ups and collaboration dynamics. A sales operations team is usually oriented around sales-centric strategies and tasks. However, a revenue operations team is interdisciplinary, consisting of experts from not just sales, but also marketing, customer success and finance. In the context of revenue operations, interdepartmental collaboration is vital for dismantling departmental barriers and synchronizing efforts towards a unified objective.
Sales Ops Often Takes the Lead in Startups
In the early phases of a startup, the primary concern is usually accelerating sales numbers. Consequently, many startups erroneously emphasize just direct sales methodologies designed for rapid revenue generation through a sales operations hire. Initially, it works just fine to target a specific audience segment. However, over time, relying solely on direct sales can be unsustainable, leading to stagnated growth. This is where Revenue Operations (RevOps) comes into play. By building out, monitoring and aligning crucial departments that drive revenue such as marketing, SDR, sales, business development and product/PLG, RevOps ensures long-term and robust revenue performance.
Customer Impact
Sales Operations (Sales Ops) is predominantly concerned with empowering the sales field team to close more deals. RevOps, by contrast, has a broader mandate: understanding how different functions of the business interact with the buyer, monitoring how they work together to deliver value to customers and growing share of revenue from each such customer. While Sales Ops concentrates on the interactions between sales representatives and customers, RevOps focuses on the overall customer journey and optimizing all aspects of the go-to-market to improve the customer experience and drive more deals at higher lifetime value with more customers. .
Metrics
Sales Ops mainly emphasizes metrics that influence closed won revenue and close rates. RevOps, on the other hand, examines a broader spectrum of metrics related to overall revenue. These include pipeline metrics such as the lead volume, lead to MQL conversion rate and MQL to SQL conversion rate, as well as customer success metrics such as net retention rate, churn rate and CSAT. It may also include financial metrics such as Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV).
Strategies for Optimizing Sales Operations
While there may be overlaps in the advice for Sales Operations and Revenue Operations, it’s worth focusing on some key best practices specifically for SalesOps teams. Here are three tips to consider:
Robust Data Management and Reporting
Effective data management is a linchpin for a successful sales operation. A lack of a robust system for tracking, accounts, contacts and sales pipelines can result in missed opportunities and lost revenue. Bad data hygiene can compromise the team’s ability to draw insights from successful or failed deals. A well-managed data infrastructure not only aids in strategic decision-making but also keeps management and stakeholders abreast of the team’s performance.
Utilize Cutting-Edge Technology
In today’s world, there’s no reason to rely on disjointed spreadsheets, numerous email folders, and disparate calendars. Given that the human mind is error-prone and limited in its ability to make complex correlations of signals from various sources, employing the latest technology tools is crucial. Building a cohesive technology stack that integrates seamlessly with your existing CRM system can greatly enhance efficiency, and improve overall sales intelligence.
Prioritize Time Spent Selling
One of the primary goals of Sales Operations should be to free up sales reps to do what they do best: sell. The majority of a sales rep’s time should be spent making calls, attending meetings, scheduling live demonstrations, and proving the value of the product in addressing the customer’s pain points. Automate routine and administrative tasks wherever possible, allowing sales representatives to focus on revenue-generating activities.
Strategies for Effective Revenue Operations
While the principles of effective Sales Operations and Revenue Operations might appear similar, they diverge in significant ways, especially when it comes to the importance of interdepartmental collaboration and communication in Revenue Operations. Here are three key strategies to optimize your Revenue Operations:
Technology Stack
A comprehensive Revenue Operations technology stack typically comprises several elements, including:
- A Customer Relationship Management (CRM) system e.g. Salesforce, Hubspot
- Configure Price Quote (CPQ) software e.g. Conga
- Marketing automation e.g. Hubspot, Marketo
- Website analytics tools e.g. Google
- Sales engagement platform e.g. Outreach, Salesloft
- Customer success platform e.g. Gainsight
- Conversation intelligence tool e.g. Gong
- Product analytics e.g. Amplitude, Pendo
These tools enable you to track the performance of specific aspects of the end-to-end revenue engine, and scale your Revenue Operations effectively while maintaining a consistent revenue flow.
Comprehensive Data Management
Given that Revenue Operations encompasses a wider range of departments compared to Sales Operations, meticulous data management becomes even more crucial. Alongside data analysis and reporting, tracking Key Performance Indicators (KPIs) across departments is vital. Since all units involved in Revenue Operations have a wider sphere of influence than just sales, establishing clear KPIs from the get-go helps set unambiguous expectations for each department’s role in the revenue-generating process.
Cross-Functional Collaboration
The success of your Revenue Operations hinges on effective collaboration among various departments, notably customer success, sales, and marketing. Emphasizing cross-functional collaboration entails fostering strong communication channels, problem-solving capabilities, and leveraging the unique strengths of each department. When managed effectively, a cross-functional team becomes an invaluable asset for the ongoing success and scalability of your organization’s Revenue Operations strategy.
Determining the Right Fit for Your Business: Revenue Operations vs. Sales Operations
Revenue Operations focuses on achieving cross-functional alignment, involving key departments like marketing, sales, and customer success, often under a dedicated leader. Organizations may find a Revenue Operations strategy beneficial if they:
- Rely on multiple go-to-market pillars that are executed by different teams in parallel
- Need continuous monitoring of cross-functional performance metrics that each influence revenue directly or indirectly
- Faced with mounting pressure with revenue targets but struggle to pinpoint which initiatives yield the best Return on Investment (ROI).
- Have processes that seem antiquated and require modernization.
- Utilize various business tools but aren’t maximizing their capabilities.
Revenue Operations facilitates easier tool implementation and optimization, saving resources on training while amplifying its impact.
On the other hand, Sales Operations zeroes in on using data analytics to guide strategic planning, forecasting, commissions and territories, and employ best practices for training and customer engagement, all in support of more efficient sales. Companies may find SalesOps beneficial if:
- Sales teams find themselves engrossed in sales enablement, data analysis, and strategic planning at the expense of actual selling.
- Most of the go-to-market is focused on sales at this time
- The company plans to build up from sales operations to revenue operations down the road as they add other functions to their GTM.
In summary, the choice between Revenue Operations and Sales Operations depends on your organization’s specific GTM model, revenue goals, and the areas that require the most attention for improvement.
Biglittle can help supercharge your RevOps and your SalesOps
With its comprehensive revenue intelligence and innovative revenue leak mitigation system, BigLittle is actively shaping the emerging landscape of go-to-market operations – including both Revenue Operations (RevOps) and Sales Operations (SalesOps). Operating seamlessly at a level above your CRM and other GTM tools, BigLittle RevenUp meticulously tracks all revenue processes from inception to completion, across sales, marketing, and customer success operations. Regardless of whether you’ve built out your ops team around SalesOps or RevOps, BigLittle can help you meet your revenue goals,
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