What is Revenue Operations? Plus Answers to Other RevOps Questions
We’re in the midst of a RevOps revolution. In fact, according to Gartner, by 2025, 75% of the highest growth companies in the world will deploy a revenue operations (RevOps) model. But what is Revenue Operations and why is has it become so critical?
Whether you’re just starting your journey or on a team that’s scaling, we’ve created this comprehensive RevOps overview and glossary of revenue operations terminology and KPIs for your reference.
It’s our mission to help businesses make better decisions so they can take control of the revenue journey. And there’s no better driver of great decisions than information and education.
What is Revenue Operations (RevOps)?
Revenue operations is a methodology that drives cross-functional collaboration in order to close gaps in the customer experience and maximize revenue for the business. It aligns the organization by combining the functions of sales, marketing, and customer success into a single team that drives strategy based on revenue impact.
What are the Benefits of RevOps?
RevOps for People: Revenue operations eliminates gaps across departments by bringing Sales, Marketing and Customer Success together around a common set of goals and metrics that drives success for the entire organization.
RevOps for Data: With a revenue operations team in place, data is no longer siloed across departments. This allows the goals and actions of one team to be directly reported to another. All the data, goals, and metrics are in one place, no matter what department you are in.
RevOps for Processes: Without a revenue operations process, sales organizations typically function as follows: Marketing has a process to bring in leads, who they then pass to sales. Sales has its own process that turns prospects to customers, who they then pass to Customer Success. Customer Success has its own process for retention and upsell.
In each separate department’s process, there are gaps and plenty of room for error and missed opportunities. Revenue operations unifies each process across every department, giving visibility and accountability to the entire process.
Who works on a RevOps team?
Revenue operations departments do not replace existing roles in a company. Instead, they work to unify the efforts, goals and metrics of existing departments to maximize efficiencies and revenue.
A few example revenue operations roles are:
- Revenue Operations Leader
- Revenue Operations Manager
- Revenue Operations Analyst
Additionally, Sales Operations and Marketing Operations roles will often report directly to the RevOps leader or via dotted line.
What is a Revenue Intelligence Platform?
A revenue intelligence platform is an all-encompassing technology application made to assist your team in improving reporting, analysis, and much more. A complete revenue intelligence platform unites several key technologies and processes, and addresses the data and analytical limitations that have long hindered operations teams.
For example, InsightSquared’s machine learning-driven Revenue Intelligence Platform operates across the following areas to improve an organization’s pipeline attainment, forecast predictability, and overall sales processes:
- Interactive Reporting
- Activity Capture
- Conversational Intelligence
- Guided Selling
Revenue Operations Glossary
Internal alignment is often mistakenly considered the goal of revenue operations. In reality, it’s something that needs to happen in order to achieve the true goal of RevOps: enabling companies to provide a seamless, personalized customer experience.
The dollar value of all deals in a 365-day period.
Annual Recurring Revenue (ARR)
ARR is the measure of predictable, recurring revenue in a calendar year. ARR does not include one-time fees and is used less often than MRR by month-to-month subscription businesses.
Average Deal Size
The average dollar value of an annual contract.
Average Annual Contract Value
The dollar amount indicated in the contract (excluding any one-time fees) divided by the length of the contract (in years).
Average Sales Cycle
The number of days from first customer contact to closed-won for each deal, divided by your total number of deals.
The characteristics, or shared pain points, of certain groups of buyers. A sales leader’s persona is going to be very different from a CRO’s, for example.
The action of selling an additional product or service to an existing customer.
The experience your customers have throughout their entire journey with your organization, which is the heart of revenue operations. By breaking down internal silos and enabling cross-functional collaboration, organizations are able to close gaps felt by their customers which result in missed revenue.
Customers that stopped using your company’s product or services after becoming customers.
Customer Relationship Management (CRM) System
A technology used by sales departments to track all the relationships and opportunities they have with current and potential customers.
Funnel Conversion Rate
The number of conversions divided by the number of leads for a sales period.\
The organization’s plan to deliver its specified value proposition to customers to achieve a competitive market advantage.
The marketing, sales, and customer success teams make up the go-to-market team.
The bookings within a forecast period that are not in the funnel at the start of the period.
A selling process and acronym that stands for Metrics, Economic buyer, Decision criteria, Decision process, Identify pain, and Champion. It emphasizes better customer qualification to determine whether or not expended effort is worth adding a customer to the sales funnel.
Monthly Recurring Revenue (MRR)
The measure of predictable, recurring revenue per month.
Percent of quota that the average sales rep achieves.
The north star metric for organizations under revenue operations. This should be how work is prioritized, and how the success of the revenue team is measured.
The revenue team is made up of the go-to-market team (Marketing, Sales, Customer Success) and the Operations (RevOps) team.
The practice of sales managers working with their sales team to fix mistakes and improve upon their selling strategies.
Sales Execution Strategy
The organization’s strategy in carrying out boardroom objectives through the sales team’s selling methods.
Sales Cycle Length
Number of days from when an opportunity is opened to when it is won.
The process of estimating future revenue by predicting the amount of product or services a salesperson, team, or company will sell in the next week, month, quarter, or year.
The number of stages your organization sets for prospects to progress through as they advance in their buying journey from prospect to customer.
The action of selling more expensive products or services than the product or service in question.
Percentage of opportunities converted into deals.
Volume, Value, Velocity, Conversion. A framework used to prioritize work streams by revenue impact.
Revenue Intelligence Platform KPIs
Activity by Day
Offers a glimpse into the past six weeks of inbound and outbound activity, meeting, stage change, campaign, from any moment in time.
Activities Required to Reach the Decision-Maker
Analyze the total number of meetings you have on deals and break it down by the personas involved. This process is often automated by your revenue intelligence platform. Once you have a baseline, look for opportunities to reduce time to engage. It’s likely that will also speed your overall sales cycle.
Confidence to Close Score
Validates rep predictions based on a combination of static and dynamic data points that allows revenue intelligence platforms to give deals a score on how confident they are that a deal will close.
Static and dynamic data points taken into consideration when revenue intelligence platforms calculate confidence to close scores are:
- Static Opportunity Properties: amount, stage, industry, region, custom properties, etc.
- Activity Data: inbound/outbound emails, calls, meetings, etc.
High-Probability Renewal Deals
Tracking renewal opportunities outside the current quarter offers the opportunity to reduce off-cycle churn and pull in deals earlier.
Ideal Customer Profile Score
The defined, ideal customer that your organization seeks to solve problems for.
Opportunities That Have Stalled
Opportunities in which customers have slowed their responsiveness or stopped engaging with your team are the first indication a deal may have stalled. To effectively measure this, you will need to have a detailed understanding of the activity profile of winning deals to benchmark against the customer engagement levels in your funnel.
Examples of customer engagement benchmarks are:
- Opportunities closing this month with less than 5 Meetings
- Open opportunities closing this quarter with 4 meetings and no next meeting scheduled
Sales Effectiveness by Competitor
Factor in the number of activities (emails, meetings, etc.), average sales cycle length, and overall number of people involved for each deal to determine which competitors require more resources from your team.
Win Rate by Activity Number
Measured by meeting number or any other milestone, tracking win rates allows you to understand the drop-off points in your sales process.
To drive more great decisions, identify gaps in your business, and advance your RevOps journey, reach out to our team of RevOps Experts.