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Investing in RevOps can improve productivity up to 20%
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This week’s research note includes:
GTM Research: How RevOps Can Drive Business Growth in 2024
GTM Problem of the Week: Who should RevOps report to?
GTM Research:
A weekly deep-dive into new GTM research and insights
We hosted a fantastic virtual leadership summit last week all about how RevOps can propel your GTM strategy in 2024.
A common theme: Rev Ops should be a strategic function in the organization that does more than just report on what’s already happened.
One panelist made this analogy: good RevOps doesn’t just give a weather report, it tells you what to wear, how to prepare, what weather is coming in a week or a month or a year, and maybe even how to change the weather.
After all:
Companies that invest in RevOps report 10-20% increase in sales productivity (Boston Consulting Group).
Companies that deployed RevOps grew revenue 3x faster than those that didn’t (Forrester).
When companies aligned people, processes, and technology across their sales and marketing teams, they achieved 36% more revenue growth and up to 28% more profitability (Forrester).
A RevOps approach can decrease rep time spent on each sale by up to 4 hours (Imagine Business Development)
RevOps should play a proactive, strategic, advisory role that is providing insight and direction, not just reports and dashboards.
The RevOps Role Evolves as a Company Evolves
By now, you are familiar with our 3P framework.
As companies mature, the role of RevOps should mature as well. Not every early stage company needs a cross-functional RevOps department. But if you are selling multiple products across many segments and markets (e.g. you’re in Platform-Market fit) and you’re still relying on siloed sales ops and marketing ops, you will be missing out on key revenue insights and opportunities.
At Problem-Market fit, RevOps is more ad-hoc. They provide department-level data that can inform decision making like which segments or campaigns to invest in more.
At Product-Market fit, RevOps starts to get more aligned. Each department should have its own ops team, but the company also needs to have a shared understanding of the data that crosses sales and marketing silos.
At Platform-Market fit, RevOps should be centralized as a strategic leader and driver of coordinated decision making across GTM teams. There is an executive-level RevOps leader with shared systems, processes, and data. RevOps is informing some of the most strategic investments the company makes.
Who Does Rev Ops Support?
Everyone!
When RevOps is working correctly, it should be supporting every single GTM team, including:
Marketing
Sales
Customer Success
Product
Finance
the Executive Team
Addressing Data Overload
The challenge with RevOps supporting all those teams?
There is SO MUCH DATA.
Every department has its own tech stacks, its own platforms, its own metrics.
Too many KPIs and dashboards create confusion, not clarity.
When leaders don’t have a holistic view, they end up with some distrust of the integrity of the data, even if it’s subconscious.
By integrating various data sources, such as CRM systems, conversational intelligence platforms, marketing automation tools, and even unstructured data, organizations can unlock valuable insights and drive more informed decision-making.
By focusing on a few key performance indicators (KPIs) and ensuring alignment across the organization, companies can avoid information overload and drive greater focus and accountability.
Revenue Scoring
One topic of discussion at the Leadership Summit that got a lot of attention was the concept of Revenue Scoring.
Watch Lindsay’s 60-second pitch on why you should be revenue scoring.
Revenue scoring is a concept that lies at the heart of optimizing revenue generation processes by allowing organizations to prioritize their sales and marketing efforts effectively.
At its core, revenue scoring involves assigning a numerical value or score to each lead or prospect, indicating their likelihood to convert into paying customers and the potential revenue they can generate for the organization.
The scoring process is typically based on a combination of demographic, firmographic, and behavioral data, and could also involve engagement with marketing campaigns and interactions with sales representatives.
Here’s an example of how a hypothetical software-as-a-service (SaaS) company might implement revenue scoring to prioritize leads and optimize sales and marketing efforts.
Start with building your Total Relevant Market (TRM) and ICP, informed by data on who best-fit customers are (usually defined by revenue potential, churn, LTV, and CAC, among other factors).
The RevOps team analyzes this data to identify patterns and trends that correlate with successful customer acquisition and revenue generation.
For example, RevOps discovers that enterprise tech companies with more than 500 employees tend to convert at a higher rate and generate more revenue. They have low CAC, high renewal rates, and the highest LTV of any segment.
Leads from the enterprise retail industry have high conversion rates, and although the deal sizes tend to be smaller than tech companies and expansion opportunities are limited, retail customers renew at a high rate and have a relatively low CAC.
Meanwhile, customers in mid-market financial services have decent contract value but incredibly high churn and high CAC.
SMB customers across all industries have low conversion rates, high CAC, low contract value, and high churn.
Based on their analysis, the RevOps team develops a scoring model that assigns scores to accounts. Based on the information above, they might assign the following scores:
Enterprise tech companies: A
Enterprise retail : B
Mid-market financial services: C
SMB in any market: F
All revenue is not created equal!
Any CEO would rather have a $250k contract of grade A revenue than grade F revenue, even though the money makes the same impact on your 2024 revenue.
Therefore, consider incentivizing sales reps differently. If you give sales reps higher commission on Grade A revenue, they will get more of it! If you give them less commission on grade F revenue, they will get less of it.
Key RevOps Questions
We will leave you with some questions that might spark interesting discussions within the executive team or the RevOps organization:
How do we create repeatable processes?
How do we make sure our customer data is as clean as possible to determine what’s working for which segments and why?
How do we make our systems work the way they’re supposed to so we can create more predictable and reliable outcomes?
What metrics should we use to measure our success in the market?
How can we build a coalition to unite GTM through data and execution?
GTM Problem of the Week
Send us your most pressing GTM problem, and you’ll get a short session with an analyst to answer it!
Dear GTM Partners,
Should RevOps report into the CEO or the COO? And should they have a revenue-based bonus?
Series D COO in Denver
Dear Series D COO,
There was actually a lot of discussion about this topic in our RevOps leadership summit last week (watch the recording here).
Our panelists agreed across the board on two things:
In a small company, RevOps should report to the CRO, and in a larger company to the COO.
RevOps should be comped on revenue, but they have to be given a fair base salary since they don’t carry a bag. Identify your biggest issue (for example, increasing the percentage of reps hitting goal) and align comp to that issue.
Here’s an example of what a Rev Ops organization might look like at a mature company:
Hope that helps, but we are always here to pitch in if you need us!
Send in your GTM Problem of the Week.
Senior GTM Analyst Lindsay Cordell is one of the most innovative thought leaders working in RevOps today.
If you are a CEO and need help figuring out how RevOps can play a more strategic and proactive role in your organization, apply here for a one-hour strategy session with Lindsay.
It’s our gift to you!
GTM News
GTM news, nuggets, announcements, and what we’re reading (with a revenue theme today!)
Hubspot’s Report on the State of RevOps (not new, but some good stuff here!)
Revenue Management Strategies for Efficient Growth from Pavilion
GTM Events
A list of upcoming events of interest to GTM professionals
May 2: Growing with Your Customers (Gainsight and GTM Partners webinar)
May 9 - 10, Seattle, WA: GTM Made Simple Roadshow
May 14 - 16, St. Louis, MO: Gainsight Pulse
May 23, Virtual: Elevate Ops (Pavilion)
June 6, Boston: Pavilion CRO Summit
June 7, Boston: GTM Made Simple Roadshow
Love,
The GTM Partners Team
