Are you driving with only half an engine? The strategic importance of RevOps

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." - Sun Tzu, The Art of War

Aug 02, 2023

How strategic is the RevOps function in your company? A company without a good strategy is like a car without a steering wheel. It has almost all the components it needs to succeed – but without that critical piece, it will likely never reach its desired destination. I would argue that a company without a strategic RevOps team is like a car with wheels out of alignment and only half its cylinders operating effectively. It’s going places, but not nearly as effectively or efficiently as it could.

I spoke with a close friend in the RevOps community last week, and we talked about what strategic RevOps teams focus on. We came up with an interesting list and realized that most of the leaders we know focus on similar things. The list changes a bit over time depending on the company's stage, but many common items are shared across great companies. Before you continue this article – take a minute and think about the five most strategic things your RevOps teams do – and see how it compares to the lists below.

After having this discussion, I decided to do a little experiment. I wanted to see how the latest versions of the AI models do when identifying and analyzing the strategic capabilities that RevOps teams should be performing. I looked at Claude 2.0, ChatGPT 4.0, the latest version of Bard, and Bing running on the Edge browser. The results were interesting, and I’m going to share them here.

I asked each of the AI models the exact same two questions.

Question #1:

“Considering the characteristics of increasing revenue, reducing costs, and mitigating risks, what are the 10 most strategic things that a RevOps team can be doing for a company?”

Question #2:

"Can you create a table and include these 10 items. For each of these items, rate them on a scale from 1-5 (1 being least impact, 5 being most impact) for increasing revenue, reducing costs, and mitigating risks. So every item will have three scores. Please also create a column that has the average score and then sort the whole table from most to least.”

Let’s look at the results:

CLAUDE 2.0

Here are 10 strategic focus areas for a Revenue Operations team to drive value by increasing revenue, reducing costs, and mitigating risks:

Implementing sales automation tools - This streamlines workflows and provides insights to boost sales productivity. Reduces cost of sales.
Analyzing market trends - Identifying new markets, segments, and customer needs to capture growth opportunities. Increases revenue.
Optimizing pricing strategy - Using data to determine optimal pricing levels and packages for each segment. Maximizes revenue.
Improving sales forecast accuracy - Applying analytics to reduce forecast error and provide reliable projections. Mitigates revenue risk.
Designing incentive compensation - Structuring motivational pay plans tailored to roles and objectives. Drives desired behaviors and growth.
Developing sales enablement programs - Providing training, content, and tools to increase rep success rates. Impacts revenue and costs.
Monitoring sales performance metrics - Tracking KPIs to identify areas for improvement and provide coaching. Revenue impact.
Aligning sales and marketing - Collaborating to generate qualified leads and enable sales execution. Revenue and cost benefit.
Overseeing data governance - Governing data quality, security, and systems integration. Mitigates compliance/reputation risks.
Building executive sales reporting - Sales analytics for executives to monitor performance and trends. Supports strategic decisions.

The table shows that optimizing pricing strategy, improving sales forecasting, and developing sales enablement programs have the highest average impact across the three areas. Let me know if you would like me to explain or elaborate on any part of this analysis. I'm happy to go into more detail on how RevOps can drive maximum strategic value.

MY ASSESSMENT: This was a good starting list, but missing building a holistic revenue model, which I consider critical. Note that it didn’t sort the averages from high to low like I asked (even though it said it did). This list is also a mixture of strategic and tactical items.

Before we move on to ChatGPT, I want to make a quick (and small announcement).

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With over 30 years of experience in strategy, technology, and RevOps, our team deeply understands the challenges and opportunities facing businesses today. We're passionate about helping businesses build RevOps teams that are empowered to drive revenue growth.

We offer a range of services, including:
- AI Innovation workshops for RevOps
- RevOps strategy consulting
- Data Analytics & Forecasting
- Fractional RevOps leadership services

If you're looking for help with RevOps, please get in touch with us. We'd be happy to discuss your needs and see how we can help. Visit our website https://revopz.net to learn more about our services or to contact us. We look forward to hearing from you!

ChatGPT 4.0

Building a Holistic Revenue Model: A comprehensive revenue model that factors in all revenue streams, costs, and potential risks can aid in strategic decision-making. The RevOps team can build and maintain this model, allowing for more informed and impactful business decisions.
Implementing Pricing Strategies: Pricing plays a key role in revenue generation. RevOps can devise dynamic pricing strategies that factor in customer segmentation, market trends, product value, and competitive landscape.
Maximizing Sales Efficiency: RevOps can streamline sales processes and provide tools to increase the productivity of the sales team. By reducing administrative tasks and focusing on selling, sales reps can drive more revenue.
Aligning Sales and Marketing: Ensuring these teams are working towards common goals can result in improved lead generation and conversion rates, thus increasing revenue. RevOps can facilitate this alignment through shared metrics, joint planning, and effective communication.
Driving Customer Success: By establishing strategies for customer success, RevOps can help to boost customer retention and promote upsells and cross-sells, all of which contribute to revenue growth. Happy customers are also more likely to refer others, providing an additional revenue stream.
Improving Forecasting and Analytics: Accurate revenue and sales forecasts allow for better resource allocation, risk management, and strategic planning. RevOps can leverage data analytics to make these predictions more accurate.
Managing Contracts Effectively: Proper contract management can minimize revenue leakage, reduce risk associated with non-compliance or unfavorable terms, and expedite revenue realization.
Ensuring Compliance and Regulatory Adherence: Especially when operating internationally, adhering to all legal and regulatory standards can mitigate risk and avoid fines. RevOps can oversee this compliance, particularly as it relates to revenue recognition.
Optimizing the Technology Stack: RevOps can ensure that all revenue-related technology (CRM, marketing automation, etc.) is being utilized to its full potential. This can increase productivity, reduce costs, and enhance the visibility of the revenue pipeline.
Promoting Cross-Functional Collaboration: RevOps can facilitate collaboration and communication across all departments involved in revenue operations. By breaking down silos and ensuring everyone is working towards the same goals, RevOps can help to drive revenue, reduce costs, and mitigate risks.

While it didn’t sort the items by average score in the table properly, it did provide a list at the bottom of the table that was sorted that looked like this:

Sorting by the average score:

Building a Holistic Revenue Model - 4.67
Maximizing Sales Efficiency - 4.0
Implementing Pricing Strategies - 4.0
Improving Forecasting and Analytics - 4.0
Managing Contracts Effectively - 4.0
Optimizing the Technology Stack - 4.0
Promoting Cross-Functional Collaboration - 4.0
Aligning Sales and Marketing - 3.67
Driving Customer Success - 3.67
Ensuring Compliance and Regulatory Adherence - 3.33

MY ASSESSMENT: This list was just a touch better, but still has a mix of strategic and tactical things. Interesting that the variance between top and bottom scores is basically the same as Claude.

BARD

Aligning revenue goals and metrics across all departments: This ensures that everyone in the company is working towards the same objectives, which can help to increase collaboration and efficiency. It also ensures that everyone is being measured in the same way, which can help to identify areas where performance can be improved.
Standardizing and automating processes: This can help to reduce errors and improve efficiency. It can also free up time for employees to focus on more strategic tasks.
Managing data and analytics: This can help to identify trends and patterns that can be used to make better decisions. It can also help to measure the effectiveness of marketing and sales campaigns.
Creating a culture of collaboration: This can help to improve communication and coordination between different departments. It can also help to create a more positive and productive work environment.
Providing training and development opportunities: This can help to ensure that employees have the skills they need to be successful. It can also help to create a more engaged and motivated workforce.
Integrating with marketing and sales: This can help to ensure that the company is using its resources in the most effective way possible. It can also help to improve the customer experience.
Building a customer-centric culture: This can help to ensure that the company is focused on meeting the needs of its customers. It can also help to improve customer satisfaction and retention.
Optimizing the customer journey: This can help to ensure that customers have a positive experience with the company from start to finish. It can also help to increase customer lifetime value.
Measuring and tracking results: This ensures that the company is able to track its progress and make necessary adjustments. It can also help to identify areas where performance can be improved.
Continuously improving: This ensures that the company is always looking for ways to improve its processes and operations. It can also help to stay ahead of the competition.

Note that, again the list isn’t sorted. But one nice thing that Bard can do is auto export to sheets which I did, and it makes it a nice way to grab data that’s created. At the bottom of the ranking, Bard added this text which I thought was interesting:

The items with the highest average scores are all related to data and analytics. This is because data and analytics can be used to identify trends and patterns that can be used to make better decisions. It can also help to measure the effectiveness of marketing and sales campaigns.
The items with the lowest average scores are all related to people and culture. This is because people and culture are often more difficult to change than processes and systems. However, they can have a significant impact on the company's bottom line.

MY ASSESSMENT: Bard has come a long way in the last two months in terms of creating content like this and improving all the time. The list was decent, but I don’t think the weightings are as good as the other ones. There’s less variability both within a column and between the averages.

BING

Conduct regular check-ins with GTM teams to ensure that no silos exist within the organization and all teams are working towards achieving the same targets. Address any roadblocks that may be hindering progress³.
Use a unified platform for data tracking and analysis so that all teams can easily access the same key performance indicators and data points. This will eliminate data inconsistencies and enable better decision making² ³ ⁴.
Understand the company’s revenue goals and align them with the GTM strategy. Ensure that all teams have clear and measurable objectives and incentives that support the revenue goals² ¹.
Use a comprehensive platform for commission tracking that automates the calculation and payment of commissions based on predefined rules and criteria. This will reduce errors, increase transparency, and motivate the sales team².
Manage the number of databases and tools used by the GTM teams to avoid duplication, confusion, and inefficiency. Consolidate and integrate the essential tools and databases into a streamlined tech stack that supports the RevOps strategy² ¹.
Implement strategies to increase the flow of high-quality leads and improve conversion rates across the GTM funnel. This may include optimizing lead generation campaigns, implementing lead scoring and nurturing programs, aligning sales and marketing messaging, targeting the right accounts, and driving pipeline growth ¹ ³.
Analyze data and customer insights to improve customer retention rates and lifetime value. This may include identifying customer pain points, needs, preferences, feedback, churn signals, upsell opportunities, and loyalty drivers. Use these insights to tailor personalized experiences and offers for each customer segment¹ ³.
Have your peers verify the data before presenting it to stakeholders or making decisions based on it. This will ensure data accuracy, reliability, and consistency across the RevOps team².
Drive more collaboration, knowledge-sharing, and growth opportunities for your ops professionals by creating cross-functional teams based on specialties, such as analytics or technology. This will help them leverage their skills and expertise across the GTM functions, learn from each other, and grow their careers¹.
Continuously monitor and optimize your RevOps processes and systems to ensure they are delivering the desired outcomes and meeting the changing needs of the business and customers. Use data-driven feedback loops to identify gaps, challenges, opportunities, and best practices for improvement³.

MY ASSESSMENT: There were three items on here that were a bit odd to me if you are identifying the most important things a strategic RevOps team should be doing. The first one was having your peers verify the data. While I think this is an important best practice that all types of teams should do, it doesn’t rise to the level of strategic in my mind. The second item was to drive more collaboration, knowledge-sharing, and growth opportunities for your ops professionals. Again – this really is a good best practice – but definitely not strategic. The last was to conduct regular check-ins with GTM teams. Good practice, not strategic. Bing did let me export the table to Excel, which was a nice touch (like Bard and Sheets).

Summarizing the AI output

One powerful way to use tools like ChatGPT and Claude is to summarize data. I took the list of 40 items that were created and asked ChatGPT to do a count of how many of the items were on each list (even if worded differently), and then to actually identify five common themes from the lists and bucket the items in each theme. If you’ve ever been in brainstorming sessions and created a long list of things to work on, it’s a very useful exercise at the end to do this last step. Here’s what ChatGPT came back with:

Here are the common items across the four lists and the number of times they appear:

Improving sales forecast accuracy / Improving Forecasting and Analytics (2)
Optimizing pricing strategy / Implementing Pricing Strategies / Pricing optimization (3)
Developing sales enablement programs / Maximizing Sales Efficiency (2)
Implementing sales automation tools / Implementing strategies to increase the flow of high-quality leads and improve conversion rates (2)
Analyzing market trends / Data analysis and insights / Analyze data and customer insights to improve customer retention rates and lifetime value (3)
Monitoring sales performance metrics / Performance optimization / Continuously monitor and optimize your RevOps processes and systems (3)
Aligning sales and marketing (2)
Overseeing data governance / Use a unified platform for data tracking and analysis / Ensuring Compliance and Regulatory Adherence / Manage the number of databases and tools used by the GTM teams / Have your peers verify the data (5)
Building a Holistic Revenue Model / Understand the company’s revenue goals and align them with the GTM strategy (2)
Promoting Cross-Functional Collaboration / Drive more collaboration, knowledge-sharing, and growth opportunities for your ops professionals (2)

Five common themes and corresponding items:

Data Management & Compliance:
- Overseeing data governance
- Use a unified platform for data tracking and analysis
- Ensuring Compliance and Regulatory Adherence
- Manage the number of databases and tools used by the GTM teams
- Have your peers verify the data
Sales Optimization & Efficiency:
- Improving sales forecast accuracy
- Developing sales enablement programs
- Implementing sales automation tools
- Monitoring sales performance metrics
- Maximizing Sales Efficiency
Strategic Planning & Implementation:
- Building a Holistic Revenue Model
- Understand the company’s revenue goals and align them with the GTM strategy
- Implementing Pricing Strategies
- Optimizing pricing strategy
- Pricing optimization
Collaboration & Cross-functional Alignment:
- Aligning sales and marketing
- Promoting Cross-Functional Collaboration
- Drive more collaboration, knowledge-sharing, and growth opportunities for your ops professionals
Data Analytics & Customer Insights:
- Improving Forecasting and Analytics
- Analyzing market trends
- Data analysis and insights
- Analyze data and customer insights to improve customer retention rates and lifetime value

I think this is a VERY good list – and quite useful as a way to think about a RevOps organization. I would add one item that all of the AIs missed – that’s collaborating deeply with the finance and customer success teams. I feel like that should have been called out more explicitly.

FINAL THOUGHTS

These lists are great, and as I said at the beginning of the article, the lists can change over time. I tend to look at what a RevOps team does and break it into strategic and tactical items. What do I think are the most strategic things a RevOps organization could be doing? Here’s a list I wrote down after my conversation last week.

Building a Holistic Revenue Model: Defining the high-level approach for managing and increasing the company's end-to-end revenue and ensuring that everyone is using the same model and metrics.
Aligning Sales, Marketing, Finance, and Customer Success: Every company needs alignment across these teams to ensure the revenue model can be a success.
Maximizing Sales Efficiency: While this can involve tactical elements (like implementing specific tools), the overarching goal of improving sales efficiency is critical to an organization’s success.
Driving Customer Success: Developing strategies for customer success is strategic in nature, although it may involve specific tactics for implementation.
Implementing Pricing Strategies: Pricing strategies involve making high-level decisions about how to price products to optimize revenue. This is often done with the product marketing and finance organizations, but the RevOps teams typically bring deep insights and more data around the ICP than the other organizations have.

The one I’ve been personally debating is the GTM Strategy. I’m starting to see more RevOps leaders being responsible for this, but in most companies, this still sits with the CRO. I think it will change even more over time, and more companies will have that function sitting with the RevOps leader, given the types of analytics required to make smart decisions around this.

As always, ending with a picture of Ollie. This should give you a good sense of his size.

Thanks for reading, and please reach out to me at steve@revopz.net if we can be of any assistance.

Best,

Steve

AI | Strategy | RevOps

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