Revenue operations is incredibly prominent in the B2B conversation at the moment, but many organisations still have a surface level understanding of the function. While most commercial leaders can define RevOps, far fewer can describe it's impact.
On Wednesday 4th November, 3Search Executive Partner, Mark Paterson, was joined by 15 RevOps leaders for a breakfast roundtable in our London office, exploring why RevOps exists, how it transforms an organisation and why the investment is valuable. The discussion covered:
- How do you actually measure the impact of RevOps in a scaling business?
- How do you justify RevOps both internally and externally?
- How does RevOps ultimately increase the valuation of a business?
- How do you sell RevOps to a C-suite where sales, marketing, customer success, finance and product all see it differently?
What does Revenue Operations bring to a business?
When describing RevOps in a single sentence, our participants touched on:
- value creation
- simplification
- a smooth go-to-market engine
When it comes to investors, one attendee put simply, "What [investors] want is some degree of predictability - predictable growth, not just growth."
Predictability is incredibly valuable to scaling companies. One CRO at a PE-backed scale-up highlighted, that while a repeatable, visible engine is part of building value ahead of an exit, it also means weekly numbers with no surprises. This is particularly useful as, in their words, "investors hate surprises."
RevOps as the voice of reason
There was a great deal of positivity in the room about what value the partnership between CRO and RevOps can bring to a business.
While sales leaders succeed or fail depending on whether they hit their weekly or monthly quotas, a RevOps leader must remain willing to confront uncomfortable truths – or "call out the emperor's new clothes when the time is right."
A CRO offered a family analogy to help define the role of a RevOps professional in an organisation, likening a salesperson to "the youngest sibling, a bit scatty, a bit entrepreneurial," while a RevOps professional is "the older sibling" who can "put structure and organisation in place."
RevOps remains relevant, whether formalised or otherwise
Whether or not your business needs a RevOps leader depends very much on who you ask.
For instance, several CROs from small and PE-backed businesses had never worked somewhere big enough to have a dedicated Revenue Operations professional, so they inherited the work. "I've never had RevOps. I had to Google it," said one attendee, but when looking at the component parts of the role, they realised they'd essentially been doing the job.
There is no specific headcount number at which Revenue Operations becomes essential. So, rather than asking what size you have to be before you need RevOps, it can be better to ask what size you have to be before you need a CRO.
Many leaders would rather be focused on sales than managing tech stacks. One CRO noted that hiring an Operations Manager drew a healthy line between running the pipeline and reporting on it.
The consensus was that the function always exists, whether or not it has a name or a person attached to it.
Defining your measures of success
What's the one metric RevOps needs to put in front of a board? The feeling was that it depends on what the business is measured on. This could be:
- Annual Recurring Revenue (ARR)
- Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA)
- Profit rather than top-line growth
Several RevOps leaders in the room shared the desire to carry the same number as the CRO and CEO. One described a four-part framework agreed with their sales president, of growth, retention, efficiency and predictability. This was measured through ARR, renewal rate, win rate or cycle time and forecast accuracy.
Speaking the language of the board
Strict data governance and separate milestones are key to protecting cash flow, ensuring financial accuracy and speaking the language of the board. With board members tending to care most about revenue-to-cash, RevOps leaders often insist on separating signature, go-live, and billing or revenue recognition dates, which are often blurred together.
Indeed, leaning too heavily on data and analytics can "lose the room" with buyers, and dashboards can hide problems: "You're all green on your scorecards, and the watermelon's all red underneath."
Value retention and benefits realisation
There was a comparison drawn between RevOps and a relay race. "If you think about a relay race, it's not necessarily the fastest runners that win it. It's the handoff between teams," said one RevOps leader. The hardest handoff, everyone agreed, is from the sale to customer success.
How do you get retention right?
One panellist suggested bringing in customer success well before a deal closes and agreeing success metrics with the client at the point of sale, so that you can demonstrate value later. Others prefer paying sales teams for retention, and using usage data and AI to spot a renewal risk long before the renewal team starts looking for it.
What is clear is that no one has yet answered the retention question. One panellist noted that it's often only finance that fully appreciates what keeping a customer is worth.
Strictly targeting your ideal customer profile (ICP) drastically increases your sales efficiency and revenue predictability. One RevOps leader shared a striking ICP finding from a PE portfolio, that deals matching all three ICP criteria converted at around 60%, those matching one at around 20% and those matching none at around 5%.
AI is redefining RevOps, but caution is necessary
Artificial intelligence has already transformed the day-to-day role for many in the room. Many reported rarely logging into their CRM anymore because they've either built a centralised data model, or (from the consumer side) because they can obtain the required data from RevOps dashboards.
However, there are practical concerns to be aware of:
- One panellist found that getting the exact context and filters right can be a particular challenge with AI assistants, which is why they still recommend a BI layer.
- On automating deal-qualification fields from call transcripts, another warned that you should "Be very careful about automating MEDDPICC" because you risk creating lazy reps. "If they're not checking, they should be accountable for those fields."
Although human accountability will always be necessary, there was general agreement that if AI takes away the work of piecing together what is happening in a deal, sales leaders can spend their time coaching.
Build your RevOps team for the future
Ultimately, Revenue Operations exists to make growth predictable and the whole lead-to-cash journey visible. Whether or not there's a job title involved, someone must own it.
We understand that meeting with fellow RevOps leaders can help to increase your understanding of the challenges and share advice on how to address them. If you would like to join us at our next event, explore our calendar of upcoming events here. Meanwhile, if you're looking to grow your team, our dedicated revenue operations recruiters at 3Search can support team growth, or our executive arm can support with leadership searches.
