Running a SaaS business with a recurring billing model? It is time for you to discover the power of revenue operations – or RevOps for short. For online businesses offering SaaS-based subscriptions, the focus is gradually turning towards long-term customer relationships. This includes not just efficient customer onboarding, but also a focus on nurturing customer relationships and loyalty.
At the same time, a great revenue model can also jumpstart your sales and move them to the next level. While sales operations work great for building a healthy pipeline during your early inception days, how do you take it forward to maximize business growth?
This is the time to shift your business focus with a robust RevOps strategy. How does RevOps work? Is it recommended for every subscription-based business enterprise? And how can you optimize your RevOps practice? Let us answer all these questions in the following sections.
What is RevOps?
In today’s customer-centric SaaS business climate, there are no questions about the value proposition of how these three channels namely, Sales, Marketing, and Customer Service, are essential for revenue generation. In essence, RevOps is the convergence point for these three channels to improve the customer journey in your subscription business.
RevOps aligns all these respective departments with a shared goal for achieving customer success and a revenue boost. Through an efficient RevOps strategy, subscription businesses can:
- Optimize sales and marketing funnels.
- Identify and eliminate sales and marketing pipeline losses.
- Develop high-quality leads and retain more customers.
According to Forrester Research, a successful RevOps framework can result in 19% higher growth and 15% additional profits.
Is RevOps recommended for every subscription-based business? Let us find out next.
Does every Subscription business require a RevOps strategy?
As a business strategy, RevOps works better in subscription businesses with a recurring billing model. With recurring billing, you can perform real-time analytics on your sales, marketing, and customer support data and measure if there are any business improvements.
At the same time, a subscription billing mode could stagnate revenue growth, as existing customers feel no need to upgrade their billing services. With the RevOps framework, subscription-based businesses can identify ways of improving their product offerings and upselling to existing customers different offerings with a higher pricing model, thus enhancing their revenues.
RevOps is an essential component for any subscription business looking to align customer success with its sales and marketing strategies. Customer success is essential for customer retention – and must be interlinked with the sales operations.
Next, let us look at a few benefits of a successful RevOps framework for subscription businesses.
Business Benefits of RevOps
A Boston Consulting Group (BCG) research study in 2020 found that aligned revenue operations across various departments can improve the digital marketing ROI by 100-200% and reduce go-to-market expenses by 30%.
Here are some of the business benefits of RevOps in the online subscriptions industry:
1. Customer satisfaction
The BCG study reported a 15-20% improvement in internal customer satisfaction because of implementing the RevOps framework.
Customers have a higher satisfaction score with businesses when its various functions are tuned to their needs. With a successful RevOps framework, different departments are on the same page and are communicating a consistent message to all customers.
For subscriptions-based businesses, happier customers are a sign of customer success that can lead to client-brand loyalty and more revenues.
2. Increased sales and revenues
Going by the 2020 BCG study, SaaS companies reported a 10-20% improvement in sales productivity, as well as a 10% increase in sales lead acceptance.
With RevOps, sales operation is no longer a “siloed” process – but is integrated with all other channels. The RevOps framework is designed for higher customer retention by converting the “traditional” sales funnel into the innovative “flywheel” model, which can leverage customer satisfaction to drive repeat sales and referrals.
As the sales operation is just a part of the overall revenue generation model, there is less pressure on the sales force. RevOps enables a customer-centric paradigm where problems are detected and fixed at the source. This leads to greater customer recognition, thus increasing sales and revenues.
3. Predictable business growth
As an offshoot of the recurring billing model, subscription-based companies can now easily and accurately predict their sales and revenue growth. With the RevOps model being more tuned to changing market and customer trends, it can provide a consistent projection for business growth.
Here are some of the key RevOps metrics that account for growth predictability:
- Annual recurring revenues
- Customer lifetime value (or CLV)
- Sales forecasts
- Customer renewals and upsells
- Customer churn rate
4. Internal process improvements
Thanks to the seamless alignment between the various functions and processes, the RevOps team can identify and resolve any process-related inefficiencies or roadblocks like work duplication. Further, data sharing between teams can save time and cost – and remove any internal friction that can hinder productivity.
An integrated RevOps platform (or technology stack) streamlines data exchanges such that the sales team is in sync with the marketing strategy (that won the customer).
How to make a smooth transition to RevOps
Despite the many benefits of the RevOps strategy, it can be challenging for subscription businesses to make this transition. Here are 4 tips to make the transition to an optimized RevOps model:
- Develop a strong RevOps strategy: Ensure that your RevOps team is in close touch with your customer needs. Align your functional goals according to your customer profile and market segments.
- Build the right RevOps technology stack: Next, design the right technology stack that can facilitate a bidirectional data flow between the various departments. Every department can have its own set of RevOps tools that can be integrated using plugins and APIs.
- Hire a Chief Revenue Operations (CRO): Next, get an experienced CRO who can oversee the overall transition and ensure that all the teams are in sync with the RevOps goals and are working for the same outcome.
- Focus on the larger picture: A complete RevOps strategy with actionable insights can point to the larger picture. Ensure that your RevOps team is focused on this picture, as they look to streamlining the process and removing bottlenecks.
As evident from this article, subscription-based businesses can no longer depend on their sales funnel to grow their business – but need to transition to RevOps that is based on the flywheel model. A successful RevOps framework can benefit any online subscriptions business in ways such as meeting customer expectations, generating more sales and revenues, and aligning business goals among departments.
In today’s consumption-based economy, OneBill can enable subscription-based businesses to switch to the recurring billing model. Know how to improve your billing efficiency? Request a free demo today.