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Oct 4, 2018

Revenue Operations: Key Growth Capabilities for 2018 and Beyond

A series of radical changes in marketing and sales has been underway for the last decade. While most of these changes empowered buyers as the internet increased competition and transparency, we are now in a period when savvy businesses have new, technology-enabled opportunities to capture buyer interest and out-perform competitors.

The marketing and sales tools and methods which enable this new competitive advantage require businesses to become more sophisticated, internally-aligned, and customer-centric than ever before. Organizations that are ready to adopt these methods will benefit from a period of arbitrage while competitors scale the learning curve.

In this post, we will explore the forces that are creating this opportunity, as well as Revenue Operations, an emerging approach to align technology, data, and teams to enhance business growth. We’ll also consider why Revenue Operations and management innovation systems like the Entrepreneurial Operating System® compliment one another as pillars of business alignment, execution, and growth.

Why Operations is the New Strategy

In their August 2018 article “Four Trends that will Shape B2B Engagement in the Second Half of 2018”, Forbes noted the following:

“Today’s’ markets are plagued by product parity. Despite marketers’ efforts to find points of differentiation, the majority of goods, services, and technologies do pretty much the same things as their counterparts. This sense of commoditized sameness makes it difficult to deliver that exceptional, next-level experience customers crave. Instead of repeating product-centered campaigns, consider emphasizing product experience instead.”

Brian Halligan, HubSpot CEO, made this point concisely at Inbound 2018, a global marketing and sales conference, when he said: “If you want to build a great company in 2018, your product doesn’t need to be 10X better than the competition, your customer experience needs to be 10X lighter than the competition.” What Forbes, HubSpot, and others are articulating is that consumers and B2B buyers increasingly measure the value of products and services not just by features and benefits, but by the ease and quality of experience associated with buying and using them.

The good news is that, thanks to the evolution of big data, automation, machine learning, and AI, marketing and sales professionals have an unprecedented ability to target highly-specific buyers and craft buying experiences that radically enhance their brands’ perceived value in the eyes of customers.

The Rise of Revenue Operations

While it may sound like a function originating in the Finance department, Revenue Operations is actually intended to align (primarily) the marketing, sales, and customer success functions.

In the early days of SAAS, sales operations and marketing operations roles evolved primarily to leverage new technology and data sources into improved sales and marketing efficiency. While these roles can substantially improve the performance of sales and marketing teams, poor organizational alignment often undermines the ability of these roles to create value for the overall business and customers. If you’ve sat through meetings in which sales is complaining about the quality of leads from marketing, or marketing is complaining about the level of lead follow-up from sales, you’ve witnessed these alignment issues first hand.

Revenue Operations’ objective is to drive improved customer experience and company growth by aligning sales, marketing, and customer success around the buyer, rather than around departments. While sales operations and marketing operations roles may still exist in companies with revenue operations teams, RevOps sits above these roles to assure they are fully aligned and leveraged.

In their publication titled “The Rise of Revenue Ops,” Radius outlines four key areas of responsibility for RevOps teams:

  1. Management & Strategy (Cross-functional alignment and resource & performance planning)
  2. Process Optimization (Marketing and business process innovation)
  3. Technology and Project Management (Technology selection, implementation, and training)
  4. Data & Analytics (Data stewardship, analytics, and reporting)

In some cases, the reporting path ultimately leads through marketing and sales leaders to a Chief Revenue Officer at the executive leadership team level, rather than CMOs and CSOs. Sales teams and marketing teams effectively (and, in some organizations, literally) become a unified “Growth Team” with incentives and processes aligned to better customer experiences and the revenue generation that follows.

Allison Snow, Senior Analyst, B2B Marketing at Forrester, describes why the alignment and capabilities created by RevOps teams are so important:

“Simply stated, the insights-driven decision-making required by modern marketing & sales is a threat to organizations with insufficient operations talent and resources. If ops activity stopped moving forward, the go-to-market wheel would stop turning.”

Why Revenue Operations and the Entrepreneurial Operating System are Complimentary

Having worked in startups and stage-two SAAS companies for nearly two decades, I’ve observed three factors that substantially increase a venture’s odds for success:

  1. Use of methods like Customer Development or Lean Startup to validate product/market fit and improve the timing of large resource investments.
  2. The ability to leverage technology and data to improve execution and customer experience.
  3. Use of systems like the Entrepreneurial Operating System, Open Book Management, or others to create strong internal alignment and focus.

When any one of these three legs of the table is missing, it is much more difficult for the other two to drive the business toward success.

For RevOps teams to be successful, companies need to move away from department-centric definitions of success to goals that align customer experience with revenue development. The common upstream/downstream relationships between siloed marketing, sales, and customer success teams are a recipe for disaster. In organizations building modern growth teams, everyone has a role to play in revenue generation and customer experience. EOS® is particularly well-suited to create the clarity, trust, and alignment that is essential to building organizations capable of evolving in this way.

Likewise, while EOS can have a powerful effect on what happens within the walls of an organization (real or virtual), it is clearly the case that the ability of companies to execute successful marketing and sales initiatives increasingly hinges on ever-growing and ever-more-powerful technology platforms and data sources. Those who can effectively leverage data, analytics, and automation will be better able to deliver the right message and experience to the right buyer at the right time, and they’ll be able to execute marketing and sales at greater scale and at lower cost than competitors.

Three Questions To Assess Your 2018 Growth Capabilities

This may seem like a lot to take in. However, to assure that your organization is adapting to the customer-centric competitive landscape of 2018, I’d like to leave you with these three questions:

  1. How can I make the process of learning about, trying, buying, and consuming my products and services a source of added value for my customers?
  2. Does my team have the ability to navigate the complex and rapidly changing marketing, sales, and customer success technology landscape, or should I engage a partner?
  3. Is every function in my business looking outward toward the customer, or inward toward their respective departments?

Those who would like to learn more about Revenue Operations and the leading methods, platforms, and tools to support it can read “Lessons Learned from Ops-Stars 2018”, a summary of insights from this year’s “Ops-Stars” conference which recently took place September 25th-26th, 2018 in San Francisco.

About the Author

Jeff Letson is the founder of Revenue Refinery, a management consulting firm that helps organizations build and implement revenue operations capabilities. A two-decade veteran of EdTech SAAS, Jeff is also an MBA from the Ross School of Business at the University of Michigan and a multi-year client of and evangelist for the Entrepreneurial Operating System. Jeff welcomes all connection requests on LinkedIn at linkedin.com/in/jeffreyletson.

Entrepreneurial Operating System and EOS are registered trademarks of EOS Worldwide.

 

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