Explainer: What is RevOps and why marketers should care

New service and subscription models have led to the creation of yet another process improvement companies need to worry about; Revenue operations

The emergence of service-based delivery models in what were previously product sales categories has been one of the key sales trends of the 2010s.

What commenced a decade earlier in the technology sector with the ‘software-as-a-service’ model leapt across into other categories as brands noted the benefit of building recurring revenue and closer customer relationships through subscription services, spawning companies such as Dollar Shave Club.

But as traditional brands move to follow suit, an obvious problem has emerged as they seek to wean themselves off upfront payment and accept they may not see the full cost of their goods and sales efforts recouped for months, or possibly years. And with much of the power in the relationship now shifted back to the buyer, the rhetoric many brands have spouted about the need to invest in long-term customer relationships has taken on a greater sense of urgency.

This, in turn, has renewed the focus on customer journeys, not just from initial upper funnel prospecting through to conversion, but all the way through onboarding and long-term customer service. As a result, the siloed nature of marketing, sales and service teams has proven to be less than ideal in an ‘everything-as-a-service’ world.

But the sales and marketing sector is never short of an inventive solution. In this instance, the proposal for aligning all aspects of the organisation to the customer relationship comes in the form of RevOps.

A contraction of the words ‘revenue operations’, RevOps describes the alignment of marketing, sales and customer service around the customer journey. Surprisingly, unlike other sales and marketing trends, it doesn’t call for a massive investment in new technology. Instead, it’s about integration of existing tools into a more seamless set of processes, from prospecting through to billing, to provide a single location for managing the entire relationship.

According to director of sales improvement consultancy Sales Director Central, Paul Sargeant, the increasing popularity of RevOps is very much due to the lag in revenue recognition some brands are now experiencing as they transition to everything-as-a-service models.

“You need to make sure that you are really on top of the whole customer journey, because you don’t get the return on that acquisition cost until a couple of years down the track,” Sargeant tells CMO. “They have to understand it is a connected customer journey, all the way through, and that journey is very important now. You need to be really conscious of where your handovers are around critical points.”

In the first instance, that means altering sales compensation from recognising upfront sales to repeat sales and lifetime customer value. That also means ensuring functional processes such as onboarding and billing are working effectively, and that service teams are properly aligned to customer retention goals. In addition, ensuring all tools in the process can manage the customer journey seamlessly is vital.

“You need to have a repeatable process that takes you from lead generation all the way through to repeat business and customer success,” Sargeant says. “And the tools you put in place need to match that.”

Leadership reshuffle

This changes some of the responsibilities within an organisation and increases the pressure to ensure silos aren’t building up around specific tasks. Sargeant says many firms moving to this model are implementing the role of chief revenue officer, with responsibility for managing the customer from acquisition to servicing and repeat sale. Often, this position sits around  traditional functional leads in marketing, sales and service.

The role of CROs is seen most commonly in software-as-a-service companies. But they are also appearing at other types of subscription businesses, such as news and magazine publishing. Sargeant says they can also be found increasingly within education businesses that are intent on maximising the lifetime value of students.

“The companies that get it right will maintain a focus on the fact that upfront they are solving the customers problem,” he adds. “And then they will get repeat business because they will get those outcomes they said they would get, which is all about customer success.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.   

 

 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

fdgfd www.google.com

Caroline Natalia

How WW shifted physical engagement to virtual success in 5 days

Read more

I found decent information in your article. I am impressed with how nicely you described this subject, It is a gainful article for us. Th...

Daniel Hughes

What 1800 Flowers is doing to create a consistent customer communications experience

Read more

Extremely informative. One should definitely go through the blog in order to know different aspects of the Retail Business and retail Tec...

Sheetal Kamble

SAP retail chief: Why more retailers need to harness data differently

Read more

It's actually a nice and helpful piece of info. I am satisfied that you shared this helpful information with us. Please stay us informed ...

FIO Homes

How a brand facelift and content strategy turned real estate software, Rockend, around

Read more

I find this very strange. The Coles store i shop in still has Flouro lights? T though this would have been the 1st thing they would have ...

Brad

Coles launches new sustainability initiative

Read more

Blog Posts

9 lessons from 7 months of relentless failure

The most innovative organisations embrace failure. Why? Because it is often through failing the most creative out-of-box thinking happens. And with it comes vital learning opportunities that bring new knowledge and experience into teams.

Jacki James

Digital product lead, Starlight Children's Foundation

Why conflict can be good for your brand

Conflict is essentially a clash. When between two people, it’s just about always a clash of views or opinions. And when it comes to this type of conflict, more than the misaligned views themselves, what we typically hate the most is our physiological response.

Kathy Benson

Chief client officer, Ipsos

Brand storytelling lessons from Singapore’s iconic Fullerton hotel

In early 2020, I had the pleasure of staying at the newly opened Fullerton Hotel in Sydney. It was on this trip I first became aware of the Fullerton’s commitment to brand storytelling.

Gabrielle Dolan

Business storytelling leader

Sign in