Why Revenue Operations Matters

Over the past 24 months, I’ve seen a profound shift in the way companies think about revenue. 

I’ve been fortunate to spend quality time with CEOs, CROs and boards of some of the most amazing companies — Zoom, Okta, Adobe, Workday, Alteryx, and others — all companies that have experienced remarkable growth in revenue and shareholder value. 

Key to that success is a new way of thinking, an understanding that revenue isn’t just an outcome, it’s a process.

It’s the end-to-end process of driving revenue, starting from the moment a prospect starts considering a purchase, to when they hit your website, to the moment you close that deal, to the moment you renew and upsell the customer.  

Every customer I meet agrees that revenue is the most important business process in any B2B company...but it’s a real mess, and technology isn’t helping.  

CRM is essential, but not enough

While CRM is an essential system of record, it wasn’t designed to manage the modern B2B revenue process. Generating revenue has changed dramatically since CRM systems were introduced over 20 years ago:

1. The buyer's journey has become more sophisticated, nuanced, non-linear and unpredictable, making ongoing engagement and activity insights critical to success.
2. New revenue models based on subscription and consumption require different measurement and management approaches, with metrics like recurring revenue, churn, upsell and net dollar retention are now key success indicators.
3. And, the pace of change continues to accelerate, with businesses constantly changing new growth initiatives and strategies. Every new program requires new analytical frameworks and metrics. 

In spite of their critical role in most companies, CRM systems fall short in a number of ways. They can’t alert you that you’re running short on pipeline for next quarter. Or show you that the deal you're chasing is a dud. Or predict where you'll finish the quarter by week 3. Or spot renewal risk or upside across your customer base. 

The DIY alternative

As a result, I’ve seen organizations resort to managing the revenue team with a mish-mash of disconnected spreadsheets, reports and manual processes built on top of the CRM. They’ve accepted their lack of control over revenue outcomes as “the way things are”. 

It’s a vicious cycle. Salespeople won’t update the CRM, so leaders don’t have actionable data, which means sales teams are managed by intuition, marketing is unaware of pipeline quality and the impact of marketing investments, and customer success doesn’t have a clear view of churn risk, renewals and upsell/cross-sell forecasts. 

It also means sales, marketing, and customer success aren’t aligned on a shared view of the business, as each maintain their own tech stacks and data silos. Everyone suffers.

Revenue Operations: A New Way to Revenue

We’re seeing a new category of systems emerging to help companies control their revenue process. This new way to generate revenue brings the same level of transparency and rigor to revenue that companies expect from any other mission-critical business process (ERP, supply chain, etc...). 

Venkat and I founded Clari with the belief that revenue is a business process that can be controlled, measured and optimized like any other. Here’s how Revenue Operations systems like Clari make your revenue process more connected, efficient and predictable:

1. More Data: They automate data capture and history snapshots across rep and buyer activity signals so information is always complete and up to date. 
2. Deeper Insights: They provide visibility into all engagement and activity data to illuminate revenue risk and opportunity, and help allocate resources. 
3. Consistent Execution: They deliver AI-driven automation and user experiences that make all members of the revenue team more productive and efficient, from sales to marketing to customer success. 
4. Predictable Forecasting: They accurately predict revenue results for any segment of the business, including net new logo and pipeline creation, upsell, cross-sell, renewals and churn.

Revenue Operations systems work alongside CRM to manage the critical growth and retention processes that determine success, processes like current quarter forecasting, out-quarter pipeline creation, deal and rep inspection, account and rep activity tracking, churn, upsell, cross-sell, and more. 

I’ve seen this new approach in action in some of the highest-growth companies and most modern revenue operations on the planet. Amongst Clari customers, 2018 & 2019 IPOs have included Dropbox, PagerDuty, Crowdstrike, Zoom, Medallia, Carbon Black, and DataDog. High profile customer acquisitions include Qualtrics, Carbon Black and Duo. Multinationals like Adobe, Lenovo and Workday as well as hundreds of innovators like Okta, Nutanix and Alteryx are using these tools globally to transform their revenue operations. 

So, let’s net out the transformation that customers experience as they adopt this technology.  

Formerly ad-hoc revenue processes are now captured in a single, managed platform. CRM data quality and user satisfaction increase significantly. Sales cycles shorten, deal sizes increase and revenue becomes more predictable. 

For B2B companies that need to deliver predictable growth and consistent retention, Revenue Operations systems align the entire revenue team to drive action and optimize the revenue process. 

I’d love to hear your thoughts on the future of Revenue Operations. What do you agree with? What do you disagree with? What did I miss? Leave a comment below and tell me what you think.