When should my company build the Revenue Operation function?

The first full-time Revenue Operations person should be hired when a company has 10-15 client-facing staff (Sales + Client Success); part-time or contract resources can support revenue leaders up to that point. A senior leader (Director level or above) should be in place when there are 50 client-facing staff, not only to build out a complete team but to reduce the risk of decisions that must be revised as the company scales.

Once a company has 100 client-facing staff, the ratio client-facing staff to Revenue Operations staff (all functions) should be range from 10-15 to 1. More RevOps resources may be needed while critical process and infrastructure is being put in place and the company has fewer processes that are automated; fewer may be needed in companies with more transaction-based sales motions and less complex systems and data.

What’s the difference between Revenue Operations and Sales Operations?

The difference is the scope. All Sales Operations functions sit within Revenue Operations and generate the majority of the “work” in most B2B companies that are sales-driven. Revenue Operations also includes Marketing Operation (notably the lead processes, data flow, tech stack, and analytics) and Client Success Operations (processes for onboarding, adoption, expansion and renewal, tech stack, and analytics). Consolidating these three functions within one group reduces redundancies, improves hand-offs, streamlines tech stack inventions, and increases the ROI on revenue support investments.

Importantly, a Revenue Operations leader should be a true peer of leaders in Marketing, Sales, and Client Success. Consolidating this function requires strong skills in business acumen, strategic thinking, negotiating priorities, executive communications, change management, etc. Without a senior person in place, the needs of one of these leaders takes precedence over that of the other two, making agreement on strategy, priorities, and resources difficult to achieve.

Where should Revenue Operations sit within the organization?

Ideally, Revenue Operations reports to the Chief Revenue Officer, who owns all revenue generating teams. If the true CRO position doesn’t exist within your company, the function can report to the most senior sales leader or COO. Having Revenue Operations report into Finance, Marketing, or Client Success is possible and offers some advantages. However, these reporting relationship can result in inadequate support for sales leadership, which traditionally drives the most growth. Moreover, teams will likely struggle to maintain a “front lines, action-oriented” mindset under the influence of most Finance and Marketing organizations and leaders.

Why should we combine our Marketing, Sales, and Client Success Operations functions?

Revenue growth (both new and recurring) is more likely to occur when selling, buying, and adoption processes are seamless and well-orchestrated across the customer lifecycle.

As explained above, combining these functions into Revenue Operations achieves synergies in process design, data flow, tech stacks, and analytics that are difficult to capture when each operational team exists in its own silo.