by Karen Schmelzer
As we mentioned in our post RevOps — Just Another Buzzword?, separating sales, marketing and customer support functions is not conducive to growth — especially for businesses in fast-paced, ever-changing industries.
Many SaaS companies are recognizing this new reality. In response, they’re breaking down silos and combining these functions into one cohesive unit — a super team, if you will — in order to streamline operations and interactions across these traditionally separate departments. They’re calling this approach Revenue Operations (RevOps).
You could think of RevOps as the glue that holds revenue-generating functions together. Its goal should be to maximize operational efficiency between them in order to maximize revenue at every opportunity.
Most companies start this alignment at the data stage. They may invest in shared software tools that get everyone on the same page data-wise, and that yield more holistic insights into the entire customer journey. This is an important first step.
However, over time and as your business grows, it might be necessary to dedicate special positions or even an entire department to RevOps. This could mean creating a position for a VP of Revenue, or eventually hiring a Chief Revenue Officer.
Is your company ready for these structural changes? Here’s what to consider.
Which Work Belongs in the RevOps Department?
RevOps can work differently for different companies. But in general, its end goals should be to:
- Keep all customer-facing employees accountable to the same revenue and growth goals, no matter what their specific role (marketing, sales, customer support)
- Make sure customers have a cohesive experience throughout their entire relationship with your company (and in fact, this often happens as a natural result when your team takes a unified, revenue-focused approach to revenue)
The tactics/work required to achieve those goals could include the following:
- Developing the overall strategy for winning and retaining new business
- Creating processes and workflows for the entirety of the customer lifecycle, including detailed department handoffs
- Choosing and maintaining the tech tools that make all of this interdepartmental work possible
- Collecting and analyzing data about revenue retention and using those insights to inform the first three points
- Actively searching for friction within customer-facing departments and working to remove it, such as with better training, tools or processes
Smaller companies may be able to delegate these tasks to various teams or functional leaders. However, it’s likely that, as your SaaS business scales, you will need a dedicated person or team to oversee revenue generation.Appointing a revenue leader frees up your marketing, sales, and support employees to focus on their core jobs of messaging, selling and serving customers. But more importantly, it places a layer of strategic oversight across your growth-driving functions.
Signs You Need to Restructure for RevOps
Small companies don’t need to designate an entire department to RevOps. If your marketing, sales and customer support teams are small enough, simply having them work together more closely may be enough to keep them aligned and efficient.
But as you grow, the need for someone in a RevOps role will become more pronounced.
Ideally, you’ll hire a RevOps team or director before you start to encounter problems like these, which are typically associated with siloed departments:
An overly complex and buggy tech stack.
The more people you have working for your company, the more complex your internal tech stack gets. People bring in their preferred tools, many times without formal approval. (A concept that’s called “shadow IT.”) These extra tools can lead to confusion and redundancy — and they likely won’t be relevant to other functions. And while integrations can be useful to eliminate some of this friction, multiple integrations can also cause headaches of their own as they will occasionally break in the face of updates or the addition of new tools.
Unless everyone has access to every software tool in use by revenue-driven teams, the accessibility of data will be limited. Diverging goals between departments also makes it much more difficult to keep a handle on what metrics are important to track and take action on — and also who the appropriate stakeholders and decision-makers are.
Resentment between departments.
As departments grow and diverge, their goals become unaligned. Sales may complain about the quality of leads coming from the marketing department, for example, or customer support may begin to feel that sales isn’t setting their clients up for success properly. These kinds of sentiments aren’t easy to measure, but can be very damaging for morale and productivity.
More and more employees and a greater level of complexity will inevitably invite inefficiency and friction into your business. For example, if it’s at all unclear when leads and customers should be transferred from one department to the next, there’s a need for a dedicated person to own and manage the customer experience as a whole.
Adopting a RevOps Framework
Again, it’s best not to wait for these problems to start — they will inevitably cost your business time, money and energy.
You can start by hiring operations employees as necessary. You can have them work together as an administrative team as you grow. Then, eventually, you can bring those roles under an expanding RevOps umbrella.
Funnel optimization software Funnelcake interviewed more than a hundred B2B business leaders on the topic of RevOps. They advised consolidating your RevOps department to around 100 employees, as summarized in this infographic:
So, where does the RevOps department fit into the rest of the organization?
According to this TechTarget article, most companies that have added Chief Revenue Officer (CRO) or Director of RevOps roles have them reporting to the CFO or directly to the CEO.
For context, Clari, which produces sales pipeline optimization software, created the following infographic to illustrate the increase in revenue-focused job postings on LinkedIn between October 2018 and December 2018.
Hiring for RevOps
No matter which role you’re hiring for in the RevOps department, look for people who have experience in growing and retaining revenue in other capacities. Ideally, they will be detail-oriented and love to play with systems and data to experiment with efficiency.
If you’re hiring for a leadership role, candidates should also have great communication skills and leadership ability — especially if their goal is to bring traditionally separate departments into alignment. In addition to focusing on metrics, they’ll need to be able to see the big picture and think strategically.
Make sure they know that their end goal is always revenue growth, and that growth will be the measure of their success in a RevOps position.
Finally, if you’re going to hire for RevOps, you need to be ready to equip new hires with the tools they’ll need to succeed. Namely, they need access to software programs and a billing platform that can analyze revenue movements throughout the entire customer lifecycle and flag opportunities for improvement.
If you’re a SaaS entrepreneur interested in getting a better handle on how to fit RevOps into a revenue management strategy, stay tuned. We’re going to continue to explore this topic in-depth as it relates to SaaS companies.