3 RevOps Misconceptions
Defining Revenue Operations
by Adrian Heng
September 20, 2022
At Cattle Dog Digital, we live and breathe RevOps. One of the joys of being a part of a RevOps digital consultancy is that I get to observe, listen and consult with a broad range of customers – large and small, and across industries. Over time, these engagements enable us to identify trends or consistencies in our customer’s thinking and their actions as it relates to RevOps. It is at this juncture that I believe it is appropriate to both pencil (as well as dispel) some common RevOps misconceptions that we encounter.
Misconception #1: RevOps is Only for Tech Companies
It is prevalent in these times to see a Chief Revenue Officer (CRO) instilled in technology and software companies aligning the revenue’s revenue objectives across multiple disciplines. Historically, tech companies have led the way as early adopters of RevOps (Revenue Operations (RevOps) and are likely much more mature in its adoption compared to say pharmaceutical, health sciences and professional services.
So long as your organisation, company, or firm is in the business of generating revenue or maximising profitability, then you are on shaky ground to be shying away from adopting a RevOps model. Whether you are a fully independent services firm, healthcare service provider, or even a non-profit organisation – if maximising predictable revenue is crucial, so that you can continue delivering value to your customers, patients or program outcomes, then RevOps has currency and relevance.
RevOps isn’t just reserved for the high-tech consumable or B2B SaaS vendors. The principles of RevOps are equally ubiquitous to other sectors and there should be little or no reason to prevent you from beginning the RevOps journey and trailblaze within your industry.
Misconception #2: Revenue is Revenue
Despite common belief, not all types of revenue are created equally. I have observed in companies that I have both worked with and consulted for that they treat revenue as all the same, and they want it all! Some companies pay little concern about how or from which customers that revenue is derived from. With the pressures of quarterly and annual quotas, sales teams stray into the seemingly easy path of generating revenue at all costs, sometimes for short-term gains and certainly for the wrong reasons.
Examples of generating revenue ‘at all cost’ approach include:
- Selling to a customer where there is no fit from a business capability perspective.
- This is where you are selling solutions or services to business problems and requirements that are outside of your organisation’s guardrails.
- Kicking the can down the road.
- Selling to a customer even if it is to the detriment of another department or team. How many times have you been in a situation where the initial sale provided all the upside to the sales rep but the implementers of the sale owned all the downside risk?
In the above scenarios, the organisation will want to establish the guardrails early and then communicate the rules of engagement to the sales team to ensure that they are operating within the guardrails.
Inherent in this process is the identification of the ‘ideal customer profile’ (ICP) so that the company can focus on how they market, and generate leads and opportunities that fall within the ICP which naturally falls within the guardrails. Is that to say that a company should never operate outside the guardrails? No. What it means is that the organisation proceeds with full knowledge and has made an assessment of all the upside and downside risks associated with the pursuit.
Enabling the decisions that are made to support identifying the right opportunities to pursue requires alignment across functional departments which is a timely segway into the next common misconception.
Misconception #3: Sales and Marketing Own Revenue Accountability
This is perhaps one of the most widely held views for those operating in the traditional siloed business model. Sales (and marketing) are the lifeblood of the organisation and they are the stewards and champions of the revenue number.
Dispelling this myth is central to the RevOps methodology which is to align the entire organisation – marketing, sales, services, customer success and finance – to the revenue goals of the organisation. RevOps tears down the traditional silos from a technology, process and cultural perspective and advocates that revenue is everyone’s responsibility.
Take the scenario presented earlier about operating within an organisation’s guardrails and enabling decision-making to pursue the right opportunities at the right time and with the right customer; this scenario touches multiple stakeholders across the entire organisation, not just sales.
A few examples of the various stakeholders involved in the value chain:
- Product management and product marketing define the guardrails and ICP based on the product’s strengths and weaknesses; they are used as inputs by marketing to identify specific industries and customer stakeholders they should target.
- ICPs and guardrails are communicated to the sales leadership and sales reps to ensure that the deals they pursue are within the sweet spot.
- Deals in pursuit that fall beyond the guardrails are often escalated up to a committee comprising of sales, services, customer success and product teams so that the merits of the pursuit are evaluated and a go-forward decision can be made with buy-in from stakeholders that will be impacted by the sale.
I was fortunate enough to attend a sales kick-off of one of our partners earlier this year, which no doubt lives the RevOps model. The usual suspects (CEO, CRO, CMO and CXO) presented to the room filled with aspiring sales reps, new and old. However, what remains salient to this day was when the CFO presented to the entire sales organisation and both garnered their feedback; and presented ideas on how the office of the CFO could assist the sales reps to identify and mitigate obstacles early in the process; how to make their lives easier; but most importantly, also make the buying process easier for their customers. Needless to say, revenue accountability is a team sport and the organisation wins and loses as a team.
RevOps – Why Now?
RevOps is relevant no matter what industry, company size or future outlook so long as driving predictable revenue and accelerating profitability are important. Arguably, this applies to the vast majority of businesses. Growing revenue or I should say, growing smart revenue means identifying the products and services that have a strong competitive advantage and recognising that not all revenue is created equal. Chasing down some revenue may even be detrimental to the organisation’s long-term success. Lastly, revenue is everyone’s responsibility. It should be seen as an enterprise-wide initiative, not just the purview of a few.
Keen to know more? Learn how to drive smart, predictable revenue in the RevOps Masterclass Series. Session #4 is all about RevOps for Professional Services. This free educational session is hosted by Adrian Heng with Luke Orell and Larry Goldberg as session leaders. [Watch Now]
About the Author: Adrian Heng
Adrian Heng is a seasoned RevOps ERP leader with over 15 years in the cloud services industry. His experience has included leading solution architect and engineering teams along with directing technical architecture, design and implementation. He served over half his career at the world’s leading ERP and PSA organisations, FinancialForce and Sage Intacct. Adrian is the RevOps ERP Practice Lead at Cattle Dog Digital, where he continues to build the RevOps ERP practice and deliver top dog RevOps solutions to innovative businesses around the world.