Revenue operations and sales operations are revenue-generating strategies businesses use to optimize their sales and drive growth.
Since they are both effective in promoting business growth and increasing revenue, how do you determine the strategy that would be more successful in meeting your company's business needs?
In this article, we will explore the differences between revenue and sales operations to effectively compare the two strategies and learn how to use them to increase profits.
What is Revenue Operations?
Revenue operations is a business approach that aligns different revenue-generating departments, such as marketing, sales, finance, and customer success teams, to streamline the customer experience. RevOps teams focus on combining all the teams, working towards the shared company goals of building new revenue streams and increasing its growth.
What Do Revenue Ops Teams Do?
Now that you know what revenue operations are, let's look at what revenue operation teams focus on within a company.
How a Revenue Operations Team Functions
Revenue operations focus on aligning teams across the entire company. They establish common revenue-generating goals for customer-facing teams, gather customer data from these teams into a sales tech stack and analyze it to determine any issues preventing revenue maximization. RevOps teams then collaborate with other departments to overcome these barriers.
Developing a Revenue-Generating Strategy
Revenue operations teams develop a strategy that promotes collaboration between different departments to ensure that a company's revenue goals are met. RevOps teams focus on strategic planning that involves gathering customer data to identify new revenue opportunities. They also come up with business strategies that oversee the entire customer journey.
Aligning Revenue-Driving Processes
A revenue operations team will work to align all the revenue-driving processes within a company to increase its efficiency and productivity.
Improving Collaboration Across Revenue Teams
Revenue ops work to improve the operational efficiency of an entire company by promoting collaboration amongst its teams. This means ensuring that sales teams, customer success operations, marketing, and finance teams work together to drive revenue growth.
Ensuring Customer Satisfaction
One of the roles of a revenue ops team is to prioritize the customer experience to improve its success. This is done by aligning customer-facing departments and identifying and mitigating customer pain points.
What are Sales Operations?
Sales operations focus on improving sales, encouraging their teams to sell faster and more efficiently. Rather than simply increasing direct sales, sales ops support their department through tasks like territory planning, strategy, technology, and project management.
Although sales operations teams work closely with sales enablement teams, their roles are quite distinct. While enablement teams are involved in the education and training of sales reps, the operations teams are focused on ensuring that the implementation of sales processes go smoothly.
What Do Sales Ops Teams Do?
Now that you know what sales operations mean, let's take a closer look at what sales ops teams do.
How a Sales Operations Team Functions
Sales operation teams assist the sales team by monitoring KPIs that measure the department's success. They also help with sales enabling and representative training to increase the overall efficacy of a company's sales team. Along with this, sales operations work to streamline the process by removing any roadblocks sales reps may encounter.
Work With a Company's Sales Team to Develop a Sales Strategy
Sales operations focus on helping their department develop and implement an effective selling strategy. A sales ops team will monitor and analyze performance using key metrics like customer lifetime value (CLTV) and customer acquisition cost (CAC). It will then use this data to provide valuable insights to sales representatives.
Sales Data Management
Sales operations teams help make sales reps' lives easier by collecting and analyzing data that can be used for strategic planning. Sales op teams streamline data by improving its quality and analysis.
Enhance the Sales Process
Sales operations teams use tools to manage the sales tech stack so that reps can spend more time and energy selling products effectively. A sales ops team also conducts forecasting and data analysis to develop an effective strategy to enhance the selling process.
Help With Sales Training
Along with sales enablement teams, sales operations teams also work to train professionals in the field. However, it is important to keep in mind that the work of a sales ops team extends beyond just training.
Key Differences Between Revenue Operations and Sales Operations
On the surface, they may seem similar, but if you look closely, you will realize that revenue ops and sales ops are two distinct processes targeting different stages of the sales funnel.
Comparing revenue operations to sales operations, the common misconception is that revenue ops are another form of sales operations. This could not be further from the truth, and most companies today are hiring revenue ops to maximize their earnings and growth, while sales ops are being used to focus on metrics related to product sales.
Although sales ops may sometimes be considered part of an overall rev ops strategy, the two have several critical differences.
Metrics: Revenue Operations vs. Sales Operations
In general, revenue operations focus on metrics that monitor revenue, while sales operations look at metrics related to product sales.
Some key metrics revenue ops measure include CLV, ROI, revenue retention, customer churn rate, and real revenue growth.
Metrics specially monitored by sales ops include close rates, the average length of a sales cycle, cost per lead, and sales-qualified leads.
Both revenue and sales ops are involved in tracking metrics relating to the customer experience. CLTV (customer lifetime value) and CAC (customer acquisition cost) are overlapping metrics.
Revenue Streams: Revenue Operations vs. Sales Operations
Although revenue operations and sales operations focus on revenue streams, the type of stream they focus on differs.
A revenue ops team will work on increasing established revenue streams and finding new ones. On the other hand, sales ops teams help sales reps increase sales from existing revenue streams.
Since RevOps are involved with product marketing as it looks for new revenue streams, it is often considered superior to sales operations.
Teams They Work With: Revenue Operations vs. Sales Operations
Revenue operations teams work with related teams across a company. These include marketing, sales, finance, tech, and customer support teams.
On the other hand, sales operations teams only work with a company's sales team.
Customer Impact: Revenue Operations vs. Sales Operations
The primary purpose of RevOps is to maximize your company's revenue. To do this, revenue ops focus on the customer journey and work to ensure customer success.
Alternatively, sales operations focus on supporting the sales team and improving the relationship between a company's sales reps and customers.
Which One Should You Choose for Your Company?
After learning about revenue and sales operations and understanding the differences between them, you may need clarification about which would suit your company better.
Revenue ops and sales ops are beneficial for companies' growth and success, and many businesses rely on both. However, in some cases, it is more helpful to invest in one than the other.
So, how do you choose between RevOps and sales operations?
Choosing between the two largely depends on the industry you are working in, your business goals, and your business size.
When Should You Choose Revenue Operations Management?
We have compiled some scenarios in which investing in a revenue operations team would be more favorable for your company.
You Want to Improve Team Collaboration
RevOps focus on improving collaboration within a company so that all teams are on the same page regarding revenue goals.
You Want to Increase Your Target Audience Size
There's only so much sales ops can do if your target audience is small and you need more leads. In such cases, revenue operations focus on sales and marketing alignment to attract new customers and open up revenue opportunities.
You Need a Long-Term Growth Plan
If you feel that your company has reached a point where its growth is stagnant, then you need to rely on revenue ops. Coming up with an effective growth plan and overseeing its implementation is one of the primary functions of a revenue operations team.
You Want to Look Beyond Sales
After you have achieved an optimal level of sales, you should shift your focus towards areas that ensure long-term growth for your company. Revenue ops teams can help you achieve this through sales and marketing alignment.
When Should You Choose Sales Operations Management?
These are some situations in which investing in a sales ops team would be more beneficial for your business.
Your Business is New
Sales ops are right for your business if it's still in its early stages. A sales ops team can help you reach your optimal range of sales by developing an effective sales strategy.
Your Sales Process is Inefficient
If your sales process is slow or your sales reps are too busy with administrative tasks and need to focus on selling your products efficiently, investing in sales operations would be a good idea. Sales ops teams support your sales reps and help you maximize your sales.
Direct Sales Work Well in Your Industry
If you are in an industry where your product relies on direct sales, then focusing on sales ops is the right choice.
You’re Selling a Niche Product
If you are in a niche market or selling a high-end product, you must rely on a sales rep who knows what they are doing. In such cases, sales operations are the way to go.
Conclusion
At the end of the day, revenue and sales operations are both highly effective strategies for increasing your revenue generation.
Choosing which one to use between the two can be challenging, and often the best solution is combining both. But if you really need to pick one, this article has covered all the details required to make a well-informed decision.
Sources:
- https://encharge.io/revenue-operations-vs-sales-operations/
- https://www.techtarget.com/searchcustomerexperience/answer/Revenue-operations-vs-sales-operations-Whats-the-difference
- https://evenbound.com/blog/revops-vs-salesops#:~:text=The%20biggest%20difference%20between%20RevOps,because%20it's%20been%20around%20longer
- https://revvana.com/blog/revenue-operations-vs-sales-operations-key-differences/
