Has your company recently adopted a RevOps model? Are you thinking about adopting one in the near future? Either way — you’re on the right track. RevOps helps companies prioritize growth, earn more revenue, and create better experiences for their employees and customers.
Read on to learn more about why RevOps is so important in modern sales, the benefits your company will experience from RevOps, and 6 important RevOps metrics every company should be measuring.
- RevOps is a holistic approach to revenue growth that ecompasses all go-to-market (GTM) teams.
- Companies that have adopted RevOps consistently outperform those that haven’t in sales productivity, customer satisfaction, and GTM costs.
- Important benefits of RevOps include better alignment, efficient processes, data-driven decisions, and an optimized customer experience.
- Revenue, lead-to-win rate, customer lifetime value, and retention are important RevOps metrics to measure.
What is RevOps and why do you need it?
RevOps is more than just a new approach to revenue management. It’s a business model that prioritizes growth at all times, optimizing the people, processes, and technology necessary to drive it successfully.
The defining characteristics of RevOps are its streamlining of go-to-market (GTM) teams (marketing, sales, finance, and customer success) and a visionary, growth-oriented leader called the Chief Revenue Officer (CRO), who oversees growth strategies for the entire organization.
Removing traditional silos that exist between your GTM teams, centralizing your growth strategy under a visionary leader, and optimizing every part of your revenue strategy combine to create a transformed organization with growth at the forefront.
Companies that implement true RevOps earn predictable revenue, operate with more agility, and are better equipped to remain competitive in unpredictable market conditions.
Not convinced? Consider the numbers: recent research has found that companies that have adopted RevOps consistently outperform those that haven’t, experiencing a 10-20% increase in sales productivity, 15-20% increase in internal customer satisfaction, and a 30% reduction in GTM expenses.
5 Benefits of Implementing RevOps at Your Company
To better understand exactly how RevOps can improve your revenue growth strategy, let’s look at 5 important benefits RevOps organizations consistently experience.
Better internal alignment
Marketing and sales alignment is an age-old challenge for companies in just about every industry. Add to that your finance and customer success teams — both equally critical to your ability to grow revenue — and you’ve got potential for a disjointed strategy without the right leadership in place.
RevOps solves this problem by placing all four GTM teams under one leader, your CRO, who makes it a priority to align these teams toward common revenue goals.
Most importantly of all, aligning your GTM teams creates a more consistent and positive customer experience. In turn, you can expect to see higher conversions, customer satisfaction, and retention over time — all driving higher revenue for your organization.
More efficient processes
As a result of better alignment and optimized technology, your internal processes will become more efficient. Executives and managers will be able to more accurately allocate resources, manual processes will be automated and streamlined, and your company will have one central source of truth for data insights.
Data-driven decision making
RevOps prioritizes the optimized use of technology tools related to revenue. Specifically, it ensures that data is centralized and accurate so that employees across teams and departments are working with the same information.
This data also drives accurate forecasting, better performance metrics, and higher visibility into the success of your strategies over time. Why is this important? Data-driven decisions allow you to operate with more confidence, proactively capitalize on opportunities, and access more sophisticated insights into larger trends that can give you a competitive edge.
Optimized customer experience
RevOps allows you to provide a better customer experience at every point in the sales cycle and well after a deal is closed. Your teams will communicate better and share consistent messaging, your processes will be streamlined for less bottlenecks and a smoother customer journey, and your customer success team will keep customers engaged well after their initial purchase.
This optimized end-to-end customer experience is more than just a benefit — it's an expectation for today’s consumers. RevOps, then, is critical for attracting and retaining the right customers over time.
When growth is prioritized, your teams are aligned, your processes are optimized, you’re making data-driven decisions, and your customers are happy — well, you can expect your company to grow at a faster rate!
Not only this, but your company can sustain its growth because you can predict it. You can scale up successfully with the right resources, strategies, and approaches because they won’t come as a surprise.
6 RevOps Metrics to Measure
Revenue is the amount of money your business generates during a fixed period of time (usually monthly or annually). It’s one of the most important (if not the most important) RevOps metric to track.
You can use a few different metrics to track revenue. Here are three of the most common:
- Monthly recurring revenue (MRR) - The total predictable revenue your company earns monthly from active customers.
- Annual recurring revenue (ARR) - The same as MRR, but measured annually.
- Average revenue per user (ARPU) - Total revenue generated by each user. Used by many communications and digital media companies.
You can use these metrics as a starting point, then drill down further into revenue streams and determine where it’s coming from (i.e. current customers vs. new customers, various customer segments). Look for new opportunities for improvement and growth whenever possible.
Qualified Leads in the Pipeline
Qualified leads have been vetted by the marketing and sales teams and determined to have buying readiness. Both marketing qualified leads (MQLs) and sales qualified leads (SQLs) fall in the middle of the pipeline. They’re a good indicator of whether or not your marketing efforts are being targeted to the right audiences.
Measuring the number of qualified leads in the pipeline is one of the best ways to forecast future revenue potential. It also enables you to quickly identify and address pipeline issues before they start showing up in sales numbers.
Lead to Win Rate
Lead to win rate measures the percentage of leads that entered the pipeline and converted to “closed won” customers, or customers whose deal has been closed. Measuring win rate along with the pipeline helps you understand marketing and sales performance and pinpoint where potential issues may exist.
Length of the Sales Cycle
The length of the sales cycle is the time between initial contact with a new prospect to when the deal is closed. This right sales cycle length depends on the company and the product being sold.
The goal, then, is not always to aim for the shortest sales cycle length possible. The key is to identify your company’s optimal length of sales cycle and implement the right tools, processes, and resources to keep it there.
Customer Lifetime Value
Acquiring a new customer is 5-25 times more expensive than retaining current customers. For this reason, customer lifetime value (CLV) is an important RevOps metric to track.
Customer lifetime value is the total average revenue generated by a customer over the entirety of their relationship with a company. When compared to customer acquisition cost, it can be a valuable indicator of a company’s profitability and growth potential.
Retention is a key metric for understanding the health of your customer base. It impacts CLV and indicates whether or not customers are satisfied with your products and services.
When you measure this metric regularly, you can put processes in place to ensure retention rates are never a surprise and work continuously to improve them. Quality customer onboarding, feedback surveys, nurturing efforts, and customer loyalty programs are a few ways you can do it.
Ready to launch your RevOps strategy?
RevOps has the power to transform your business to become a revenue-focused, high-growth organization. To achieve it, you need the right tools in place to support your strategy.
The Xactly Intelligent Revenue Platform brings Revenue Operation teams together to support salespeople with precise plans, better incentives and data-informed insights to give them more confidence in their pipeline.
Learn more about how we can help you transform your revenue strategy!