🔦 Spotlight - the emergence of RevOps
🔦 Spotlight - the emergence of RevOps
In this Spotlight we dig into RevOps, and why it is important for companies and BizOps teams
We all lie on a spectrum. Some sort of spectrum. Extroverted to introverted. Quiet to loud. Red to white (wine, that is 🙃).
It is easy to think of tech companies’ growth engines on a spectrum as well: from Product-Led to Sales-Led. In fact, sometimes Product-Led Growth (PLG) and Sales-Led (SLG) are pitted against each other; but I think they are like the Yin and Yang - there is a bit of each in the other. Even if you find yourself on the PLG end of the spectrum - amongst the likes of Figma, Slack, HubSpot, Intercom, Typeform - PLG is not an absolute. Someone somewhere might still need to talk to a real human person.
This is to say that tech companies will operate a sales function from some point in their journey.
The question becomes how big, how specialized, and how stratified it is. The more growth, the more you dial up these three parameters, the higher chance you need to optimize the Revenue Strategy and Business Operations for effectiveness. This means defining the ICP (Ideal Customer Profile), attracting the ICP, and making the ICP happy.
The growth engine will keep changing, and you need to have your finger on the pulse of all revenue generating activity (including upsell!). You need to:
understand your sales motion as part of the whole customer success experience,
tweak it thoughtfully, and
incentivise the team
You know you are doing well when you attract long term advocates, and not short term cash machines.
I have heard of various “benchmarks” for what ARR demands what type of structure. For example the <$5k - pure PLG; $5-$15k - hire full scope sales; >$15k - start thinking SDR/AE. Then at some point you add the BDRs. Later you discover a vertical that needs special attention and dedicate sales resource towards that. And the challenges go on and on..
This is why Revenue Operations, or Rev Ops, has emerged as its own domain. Because someone needs to keep an eye on the “sales motion ball.”
The goal for the RevOps team is to drive higher revenue through an improved external, and internal, customer journey.
They do this through decreasing friction across the process, increasing conversions, increasing pipe, increasing the velocity of deal flows, feeding insight about the ICP, etc. Regardless of whether you have a RevOps specialization within your BizOps department (even if it is a department of 2), your Biz Ops team may or may not be already doing the work. This is because it spans through the three areas of Biz Ops, as described in the inaugural post.
(1) Data: setting up and clarifying data flows
(2) Analytics: monitoring pipe performance, and deal flow effectiveness; forecasting headcount, budgets; inputting into MBRs etc.
(2) Process: set up and optimize the internal stakeholder process linking sales, accounting, deal desk, legal (through CPQ / CRM software)
(3) Strategy: providing a point of view on how to segment your sales team (geographical, industry, target company size, etc), how to assign scope of role (do you need SDRs, BDRs, AEs… or do you conflate some of that work in one role), capacity planning, compensation structure
(3) Tools: what tools to use, how to integrate, and automate (think intelligence, qualifying, demo scheduling, CRM, and analytics tools, for example)
(3) Enablement: onboarding, ongoing training, sales collateral
Regardless of whether this is one person to begin with, or 5, you need to set up the processes, tools and incentives for the sales motion to begin to move its gears. These should be based on data, analysis, and an actionable argument. And as your gears move through (re)volutions, your RevOps experts will be able to gain insight, build momentum, and supercharge the next phase of growth. And I will say this again, you know you are doing well when you attract customers as long term advocates, and not short term cash machines.
A little anecdote about something I led at Hopin: sales in a specific region were slow. It wasn’t a sales team issue. It was a customer requirement issue. They wanted “too much.”
I spent some time on Gong, listening to the conversations of reps speaking with tough customers. I figured out a few drivers for the issue - but this was qualitative mention of a issue, not a key issue that Loses a Sales Opportunity. We didn’t measure that in Salesforce.
The old adage is you can’t manage what you can’t measure. And my small sample of calls wouldn’t be enough to change course for the region.
So, working with our Salesforce architects, we created new Closed-Lost reasons into the system - now we could measure the impact of the issues mentioned. With our Enablement crew, I designed a training for the reps to know when and how to use the new options. (With Salesforce, you are as good as the accuracy you get form the data, a.k.a. how well the reps input into the system, so that’s a crucial bit.)
A month later we had overwhelming data about what the key driver of Lost deal was. Now came the time to work with eng and legal, and design possible solutions - from the easy to the hard. I took each of those and calculated the amount of effort, time and cost it’d take to implement. Quickly we had our hit list for “low-hanging fruit” to pick. With those implemented, sales reps trained, and eng prepping their roadmap, we had our initial results - sales were finally up, only 6-7 weeks after kick off.
It is a classic BizOps case: measure, manage, scale.
My advice to founders I work with is, embrace the Yin and Yang of PLG and SLG, by thinking of the whole customer success journey (not sales in isolation). But never ever ever mix red and white wine!
In a next Spotlight, I will talk about incentives for the sales teams. Stay tuned.
To continue the conversation, connect with me here: https://www.linkedin.com/in/ignatova/