Revenue Amplification Platform
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CPQ (Configure Price Quote)
Quote complex products
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Renewal, expansion, & upsell
Where buyers and sellers meet
We asked Royce how to move the perception of revenue operations from tactical to strategic. As the chief revenue officer, he has a bird’s eye view of the importance of the revops function.
Royce explains that if organizations are wondering how to scale their business, one of the most strategic moves they can make is to hire a revenue operations leader. Revenue is not just sales or sales operations; it’s about obtaining and retaining revenue. And so that could include marketing, that could include SDR teams, the sales organization, as well the client success teams or others that are responsible for revenue retention and revenue renewal.
The perception that many leaders have is that revenue operations as a function is what Royce calls “the electricians of an organization.” They don’t just plug in tools like Salesforce, DealHub, and HubSpot. That is just 5% or 10% of what a revenue team does. They can bring so much more to the organization than just the electrical work, if you will, around the company’s tech stack.
When folks are looking at scaling a business, it’s imperative they start with positions around revenue operations. Having those at the onset of the scale-up ensures everything is set up for long-term success, versus doing it retroactively once the scale has actually started.
Royce’s experience in scaling businesses has shown him that a strategic plan is needed to validate the need for revenue operations. Within that plan are four functions: technology, strategy, performance, and operations.
Technology: Revenue operations adopt and customize the CRM, integrate apps and tools, and use business intelligence, data management, and reporting.
Strategy and sales process optimization: Data analytics, sales forecasting, and revenue forecasting are in place which enable high-level planning and goal setting. This allows you, especially during the annual planning processes, to tap into revenue operations to help with planning for the following year or years.
Performance: Revenue operations evaluates the performance of the different components of revenue. Performance management can be things like comp plans and quota attainment. If you’re evaluating lead management and performance of leads and conversions of MQLs, revenue operations can look at conversions of those, especially by channel. Key metrics planning and compensation KPI achievement also come out of revenue operations.
Operations: Sales enablement, product training, contracts and SLAs, hiring and onboarding are a core function of revenue operations. At HRS, sales enablement is a function of revenue ops for two reasons, 1) they want the operations themselves to all fall under one piece, and 2 )sales enablement is also about tech stack. They want to ensure that the tech stack embeds their training processes across all departments. So, sales enablement reports in the revenue operations.
We asked Royce if rev ops has a direct voice or a filtered voice, a strategic or tactical involvement in yearly planning. Royce explains that rev ops must be in the room and be part of the conversation in marketing, sales, and customer success planning meetings. At HRS, Saul Garcia, VP of Revenue Operations spends nearly his entire Q4 in planning sessions because he is even pulled into marketing planning when they are working on channel conversion.
The data used to make strategic decisions and set sales and revenue goals comes from revops. When you start looking at the data, and not just saying, well, I think X territory, or I think Y marketing strategy will work, and you start making it an empirical data conversation, that’s where naturally revenue ops has to be at the table. They have to be there to deliver that data for you.
We asked Royce about revenue operations structure and headcount ratios. When growing a company, what is his recommended ratio of revops roles and sales enablement to the larger marketing team, sales organization, and customer success teams? What are the triggers of knowing when is the right time to introduce the next pieces to the revenue operations organization? Is it on ratios of headcount or is it based on something else for you?
Royce explains that there’s a core principle with scaling revenue operations that has to start with headcount. Typically, the way HRS runs it for sales enablement, they try not to have more than 12 to 14 quota carrying sales reps (that can be SDRs with SAL or opportunity quotas or sales executives with dollar quotas) to one sales enablement person. The reason is that if you want your sales enablement team to be training, listening to calls, coaching objections, showing them what marketing content to use or not use, whatever it might be, there are a limited number of hours in the day.
He shared that, in terms of the actual revops team beyond sales enablement, today, across all of their commercial functions, they have about 50 people in revenue operations roles. That includes sales, customer support, revops, SDRs, marketing. There are five revenue ops folks which includes their VP of revenue operations, two folks focused on the CRM component of the business, making sure that it is scaled and customized in the correct ways. And then they also have a client success operations lead that’s focused specifically on the CS side of the house, ensuring they have the correct processes for revenue retention and renewal, and it’s all documented correctly.
Learn more about the challenges of scaling your sales organization.
Royce has talked to folks that have built $600, $700 million businesses with 10 revenue ops folks. And, he’s spoken to some folks that have a lower ratio there. But, it’s important to know your business because some businesses don’t introduce revops until it’s almost too late and they’re going to need more folks. But if you start earlier building your entire revenue team, it’s actually an investment in the business. You won’t have to hire as many folks down the road.
You have to start hiring revenue operations professionals early. Some CROs are not starting early and they’re not investing in the revenue operations function. They think of it as a nice thing to have instead of a necessity. They are focused on getting dollars in the door and not any internal efficiency around those dollars. And that can be around renewals, documentation, and retention. Revenue growth comes from focusing on the operational efficiency gains of those dollars, not just getting them in the door.