The Revenue Operations Charter

By Ethan White, published July 1, 2024

 

Article Purpose

 

My goal with this article is to provide CEOs, Founders, and cross-functional executives with a comprehensive understanding of Revenue Operations (RevOps) and its strategic role within a company. It serves as both an educational resource and a benchmarking standard for the function, establishing a foundation for future discussions and implementations.

 

What Is RevOps

 

RevOps is a strategic function designed to fortify a company's operational efficiency and improve its valuation and access to capital. It accomplishes this through systematic improvements in unit economics on two broad axes: increasing Customer Lifetime Value (CLTV) and reducing Customer Acquisition Costs (CAC), and doing this while providing enhanced visibility into performance and unifying Marketing Ops, Sales Ops, and Customer Ops under one strategic vision.

 

What RevOps Is Not

 

There are a few ways RevOps is commonly treated that I want to discourage by outlining what it is not. 

 

• It is not a rebranding of traditional sales operations, though it often encompasses traditional Sales Ops duties
• It is not solely focused on technology implementation, even though this is nearly always part of the function
• It is not a siloed function operating independently of other departments
• It is not a quick fix for revenue challenges, but rather a long-term strategic capability
   

The RevOps Imperative

 

The primary goal of RevOps is to accelerate sustainable revenue growth by aligning sales, marketing, and customer success efforts. This alignment creates a seamless customer journey, optimizes resource allocation, and provides data-driven insights to improve decision-making.
 

How Does RevOps Achieve its Imperative

 

Revenue Operations helps companies achieve these objectives through five key levers:

 

 

1. Increasing Deal Values: By optimizing monetization strategies, cross-selling techniques, value propositions and more, RevOps ensures that each transaction contributes maximally to the revenue stream. For example, implementing dynamic pricing models or creating bundled offerings.
    
2. Accelerating Sales Cycles: RevOps accelerates the progression from lead to closed deal and revenue recognition, through efforts to increase velocity in lead-to-cash, quote-to-cash, and general deal velocity. This might involve automating parts of the sales process, training reps on new techniques, or providing sales teams with different quoting and contract tools.
    
3. Boosting Conversion Rates: Through data-driven insights and targeted engagement, RevOps improves the likelihood of leads converting into paying customers. This could include implementing lead scoring systems or personalized marketing campaigns.
    
4. Augmenting Retention Rates: By fostering customer satisfaction and loyalty, RevOps aims to improve both logo retention and revenue retention, securing a stable customer and revenue base. Strategies might include proactive customer health monitoring or tailored upsell/cross-sell programs.
    
5. Improving Visibility into Performance: By driving transparency into projects, programs, and revenue-driving activities, RevOps can increase lender, investor, and buyer confidence during capital events. This often involves implementing robust reporting and analytics tools.

 

Executing The Improvements

 

RevOps achieves these improvements by meticulously crafting customer journeys and developing capabilities that align with the company's overarching strategy.

 

This involves:

 

1. Alignment: Creating alignment between strategy, people, processes, policies, technology, and data
    
2. Capabilities: Enhancing existing capabilities and developing new ones to deliver an exceptional customer experience at every touchpoint
    
3. Cross-functional Collaboration: Collaborating closely with Sales, Marketing, Customer Success, and other teams to ensure cohesive execution
    
4. Change Management: Implementing and optimizing technology stacks to automate and streamline operations
    
5. Analysis: Continuously analyzing data to identify trends, opportunities, and areas for improvement

 

Impact

 

When executed effectively, RevOps leads to:

 

• Increased revenue and profitability
• Improved operational efficiency
• Enhanced customer satisfaction and loyalty
• Better cross-functional collaboration
• More accurate forecasting and planning
• Increased company valuation and easier access to capital

 

Where Do I Start?

 

If you've read this far, you should be asking where to get started. I'd recommend going through the following steps, generally in the provided order.

 

1. Assess Your Current State: Evaluate your existing processes across sales, marketing, and customer success. Identify silos, inefficiencies, and gaps in your revenue generation efforts. Where can you allocate resources to address glaring issues right now? What things do you know or strongly suspect would increase deal values, accelerate sales cycles, or improve your conversion rates? Can you test one of those initiatives right now?
    
2. Align Your Leadership: Bring together executives from Sales, Marketing, Customer Success, and Finance to discuss the potential impact of a unified RevOps function. Does this need to be an in-house hire, or can you start with a fractional resource? 
    
3. Develop a RevOps Roadmap: Create a phased plan for implementing RevOps in your organization, focusing on quick wins and long-term strategic goals. Think about it like a crawl-walk-run initiative.
    
4. Talk to an expert: If you are having trouble getting started on the previous steps, or have done them and are ready to take it to the next level, don't hesitate to talk to an expert. 
    

By taking the time to think through what RevOps would look like for your company, you’ll start identifying opportunities to test before adding new resources, or which can be early initiatives for the new resources to address.

Done correctly, RevOps can quickly add millions of dollars to a company’s value. Doing it properly involves both strong executive sponsorship side and the RevOps resources who can correctly manage the broad spectrum of work associated with being strategic and tactical resources.