Revenue and sales are key ingredients to business success. Without sales, there’s no revenue. And without revenue, there’s no growth.
However, as the market is getting crowded, reaching new clients is becoming increasingly difficult.
This is especially true for SaaS businesses. First, competition is fierce in almost any industry. Unless your product is unique, all your audience needs to find an alternative is a few clicks of a button.
That’s why companies start optimizing their revenue-generating processes as they grow. They’re looking for ways to boost sales, increase conversion rates, and reduce churn.
One of the ways they do that is by investing in specialization in money-oriented functions.
The two prime examples of this are Sales Operations and Revenue Operations. The two functions, at first glance similar, are responsible for different parts of the sales funnel.
They also have different goals, with Sales Ops sometimes falling under Rev Ops.
Additionally, each is more important than the other in different situations.
For some companies, having Sales Ops is enough. Others benefit just from Rev Ops. Some businesses flourish thanks to the synergy created by the two.
In this article, we’ll look at the differences between Sales Ops and Rev Ops, and see how they benefit various companies.
Rev Ops — the revenue-driving force of your business
Revenue Operations aligns revenue-driving roles: sales, marketing, and customer success. This alignment is key to identifying new revenue opportunities and reducing inefficiencies. This, in turn, helps grow the revenue.
As a younger function compared to Sales Ops, there’s still some ambiguity around it. According to the State of Revenue Operations report, some people still treat it as nothing more than glorified Sales Ops:
Thankfully, that perception is changing. Today, most companies use Rev Ops to align their key revenue-driving functions. When this is the case, the main roles of RevOps include:
- Identifying target audiences. Finding new target audiences, segmenting them, and creating a plan to reach them is key to generating quality leads. After all, targeting the wrong leads is the sales team’s main complaint for marketing:
- Creating and implementing a long-term revenue strategy. After that, Rev Ops helps create short-term goals designed to execute that strategy.
- Streamlining revenue-generating processes. This is key to reducing inefficiencies and simplifying the work.
- Improving communication between revenue-driving teams. The key to effective collaboration between marketing, sales, and customer success.
- Picking the right technology. Rev Ops looks at the core needs of different teams and picks the tools that help move the company towards its revenue goals.
- Creating and testing product pricing. The right price boosts both conversion rate and ROI. Finding the sweet spot requires collecting and exchanging data between sales and marketing.
- Selling more to the same customers. More specifically, Rev Ops is responsible for planning upselling and cross-selling opportunities.
- Reducing customer churn. Churn is one of the biggest problems in SaaS. Even million-dollar SaaS businesses face a median churn of 6% – 20%:
- Positioning company products and services. Together with marketing, RevOps works on creating a brand image that appeals to the company’s audience.
Of course, the exact RevOps tasks depend on your company’s age, structure, and size. Sometimes, companies prioritize other functions over Rev Ops, especially in the early stages. And one of such functions is Sales Ops.
SalesOps — making your sales team’s life easier
At first glance, sales operations may seem like a function responsible for driving direct sales. However, the role of SalesOps is to stay “behind the scenes” and support the sales team in their work.
The aim is to make sales reps’ lives easier and let them focus more of their time on doing what they do best – selling.
In general, the tasks of SalesOps are a mix of sales strategy, technology, performance, and operations:
Some of the tasks in those areas include:
- Creating a long-term sales strategy (together with the sales team). They then work on helping sales reps implement it. They set sales ops KPIs, measure sales reps’ performance, and offer feedback. Interestingly, 89% of SalesOps pros agree that systematic planning can set the sales team up for greater success. Yet, 35% agree they do so way too rarely.
- Analyzing and improving sales processes. Sales Ops looks for inefficiencies and aims to reduce non-sales tasks that sales reps have to deal with. The goal is to let the latter focus on execution.
- Managing sales data. 58% of SalesOps professionals face data-related challenges. Yet, data is critical to both Sales Ops and business success. This includes collecting, processing, and cleaning up sales data.
- Sales forecasting. Data is also the key to spotting and forecasting performance trends. This allows SalesOps to react to issues inside the sales team or market trends and changes on time.
- Organizing the team and training sales reps. Unless a sales enablement function is in place, Sales Ops trains new sales team members and prepares them for fieldwork.
- Helping improve team performance. In particular, their role is to use technology and data to spot (and help fix) performance issues. Often, they do that in direct cooperation with the sales team.
Of course, just like with Rev Ops, the exact roles of Sales Ops will differ between companies. These will depend on company age, size, products, or structure.
In some cases, they might even overlap with RevOps. However, there are some key differences between the two – which we’ll dive deeper into in the next section.
SalesOps and RevOps — key differences
If you look at RevOps, SalesOps may feel redundant. After all, sales is already in the scope of RevOps. However, the exact sales functions between the two are rarely the same. There are also some strong differences in other areas:
1. They cooperate with different teams
First, as mentioned earlier, the key role of Sales Ops is to make the life of the field sales team easier.
However, this also means that 90% of the time, they cooperate with just the sales team. On the other hand, as a growth-focused function, Rev Ops has to go beyond just sales.
In particular, Rev Ops focuses on coordinating sales, marketing, and customer success teams. They sometimes drop the tech team into the mix.
2. Sales Ops usually comes first
When you’re growing a startup, all you care about is maximizing the number of sales.
That’s why, in the early stages, many startups focus on direct sales techniques and tactics. Ones that can drive sales as quickly as possible.
Often, those sales come from a selected segment of your audience. However, if all you focus on is direct sales, in the long run, sales will dry up.
That’s where RevOps comes in. By aligning key revenue-driving teams, they help you get as many sales as possible.
3. They have a different impact on your customers
The core focus of Sales Ops is your sales field team. Their work helps improve the relationship between your sales reps and your customers.
Rev Ops, on the other hand, focuses on driving more revenue by increasing your conversion rate. Its main role is to improve customer experience and make it easier for your customers to make a purchase.
4. They approach revenue streams differently
Revenue streams are one of the areas where the two functions tend to overlap. However, the main difference is in the revenue streams they focus on.
Usually, Sales Ops works on helping sales reps improve sales from existing revenue streams.
Rev Ops works with both existing streams and focuses on finding new ones.
This is also an area that explains why RevOps is seen as being above Sales Ops. In essence, because it’s working with marketing, it’s the force that finds new audiences and segments. It also helps warm up leads and qualifies them before sending them to sales.
5. They focus on different metrics
At least for the most part. SalesOps focuses on metrics that impact sales and close rate. Compared to that, RevOps looks at all the metrics that revolve around revenue.
Where the two overlap is certain money-oriented or customer-oriented metrics. For example, both functions can use CLTV (customer lifetime value) to measure performance.
Similarly, they both look at metrics such as CAC (customer acquisition cost) or cost per lead.
Here are some of the key metrics to follow:
|SalesOps Metrics||RevOps Metrics|
|Close rate||ARR/MRR per Segment|
|Customer acquisition cost (CAC)||CLV|
|Customer lifetime value (CLTV)||Renewals/Upsells %|
|Average sales cycle length||Marketing Qualified Leads|
|Win/loss ratio||Sales Pipeline Velocity|
|Percentage of leads in each stage||Customer churn rate|
|Cost per lead||Real Revenue Growth|
|Sales Qualified Leads||ROI|
Of course, just because the two teams focus on the same metrics, that doesn’t mean their functions overlap. First, the same metrics can provide them with vastly different insights. On top of that, if the two functions are planned correctly, it’s easy to avoid overlapping responsibilities.
Which team do you need?
Because of the differences between the two functions, your company may benefit more from investing in one over the other.
Of course, in some cases, it might be beneficial to invest in both Sales Ops and Rev Ops.
When to build a SalesOps team?
89% of executives believe that Sales Ops is responsible for growing the business. There are many reasons why you should create a SalesOps team.
1. Your SaaS is still in its early stages
As discussed, when you’re starting, you don’t have an email list or social media following. Your SEO presence most likely doesn’t exist either.
Sales Ops helps you maximize sales from existing leads (or perform successful cold outreach).
2. You’re in an industry where direct sales work best
Of course, certain businesses and industries have to rely on direct sales for much longer.
This is true, especially when it’s hard to build social media following or attract organic traffic due to competition or the nature of the industry.
3. Sales is working great for you.
If you started growing your business with direct sales, and it’s still working great for you… why stop?
In this case, you may want to continue cold outreach even long after your marketing team has created new revenue streams.
4. You’re selling a complex and/or high-ticket product
Certain products and services are tough to sell from the get-go. They require long lead nurturing and a qualified salesperson to seal the deal.
This is common in B2B, where investing in a product can lead to big changes to operating procedures. It’s also the case for high-ticket B2C items, where the customer prefers to talk to a qualified rep. Sometimes, those sales can take weeks or even months, even with a sales rep.
If that’s the case for you, Sales Ops can help you sell more. With insights and data from Sales Ops, your sales team can improve their efficiency and seal more deals. Why?
Sales Ops uses said data to identify leads that are most likely to make a purchase. They can also help identify the best course of action for each lead.
5. You feel that your sales reps spend too much time on paperwork and red tape
Not all reasons for investing in SalesOps relate to how you’re getting sales. Where Sales Ops shines is making sure your sales reps don’t spend more time on paperwork than they need.
They aim to simplify everything, from lead processing to reporting. That way, your salespeople can spend more time on the #1 thing they should be doing — selling your product.
6. It feels that your sales reps are falling short and could use extra training.
Sometimes the reason for sales underperformance is not in the paperwork. Instead, what your field sales reps are lacking are skills and preparation.
One of the things Sales Ops can help you with is training. In particular, they can identify team members who need help. Then, they can help pick the right solution to their problem.
Sales Ops can also plan and execute periodic training plans for the whole team (as well as offer feedback).
7. Your sales reps have become reactive, and there’s no viable strategy to change their attitude.
Lastly, Sales Ops can tell your sales team when their attitude or strategy is wrong.
By watching trends, they can spot when your salespeople fall short. Interestingly, one of the causes of underperformance is reactivity.
When your salespeople become reactive, they no longer actively pursue sales. Having someone to give them a heads up and share feedback with them can help change their attitude.
When to create a RevOps team
The problem with focusing just on SalesOps is that you don’t build a sustainable flow of leads. However, getting fresh leads is one of the areas where RevOps can help you.
Other reasons to create a RevOps team include::
1. You want to go beyond optimizing sales.
Don’t get this point wrong. You should always work on optimizing your sales process and keep testing new things. However, if you want to grow, sales is only one piece of the puzzle.
To succeed long-term, you want to work with all revenue-generating teams.
That alignment is key to getting the most bang for your marketing buck. Unsurprisingly, senior B2B marketing leaders believe that marketing and sales alignment is the #1 action for a business to focus on.
2. You need to improve internal communication between teams
RevOps keeps an eye on the flow of information. Poor communication between different revenue teams can lead to growth issues. Sales professionals see it as the #1 challenge to creating an exceptional customer experience:
Many companies suffer from communication problems they don’t realize exist. They’re losing opportunity after opportunity because no one knows there’s a problem.
So if you feel there’s any miscommunication between teams, Rev Ops can help you spot it (and solve its cause).
3. You operate in a fast-paced environment
Certain businesses (and SaaS businesses in particular) operate in very dynamic, fast-paced markets. To compete in such an environment, you need to stay on top of both internal and external trends. You also need to be flexible enough to react in time to the threats and opportunities spotted.
By analyzing data and gathering insights, RevOps helps your company respond in time to the threats and opportunities. It also allows you to make better and more accurate decisions.
4. Your current audience is too small
At one point, your salespeople will dig through all the leads that you have. When the pipeline of new leads stops, so does the growth of your business. Soon, there’ll be no one to close!
To keep getting fresh leads, you need your marketing team to take care of the upper parts of your sales funnel. Ideally, you want them to work in cooperation with your sales team. That way, the leads they get are qualified and suitable for your sales team to process.
And as mentioned earlier, achieving that alignment between sales and marketing is the #1 role of RevOps.
5. You lack a long-term growth strategy (and a team to keep an eye on its implementation).
Many companies reach a certain level and get stuck because they lack a growth strategy. And, even if they have it, they don’t have a team that’d keep an eye on its implementation.
Sure, they may know where they want to get. But where they fail is understanding what revenue level they need to achieve and how to achieve it.
Yet, creating such a strategy is one of the key roles of a Chief Revenue Officer. Then, the Rev Ops team can help design so-called quick wins. Those quick wins are aimed at helping the company get closer to its long-term revenue goal.
6. You don’t know what’s working and what’s not.
Lastly, investing in Rev Ops is a good idea if you know there’s something wrong with your revenue growth. The only thing you don’t know is what’s causing the problem.
After all, the issues may be caused by marketing, sales, customer success, or even the technology you’re using, which are all the areas that Rev Ops keeps an eye on. Of course, Rev Ops may not be enough to help you if you have a deep-rooted problem with sales.
In this case, creating both functions might be a good idea.
When to use both?
As touched on earlier, some companies start with Sales Ops and never invest in Rev Ops. With others, the latter “grows” out of the former.
Of course, if you meet the “criteria” we’ve discussed for investing in either of them and have the budget — go for both functions.
Letting Rev Ops take over Sales Ops often means certain functions cease to exist. That’s not a problem if you move from direct sales to building automated sales funnels.
But, if you want to keep your sales reps and want them to perform well, you need to keep both functions.
In this case, RevOps will be responsible for creating a long-term, big-picture strategy. It’ll also work on driving and qualifying leads for sales.
That cooperation is also crucial when thinking about Sales and Marketing Qualified Leads. Why? The focus of Rev Ops is on driving MQLs. These are the people who, for example, download top-of-the-funnel lead magnets.
They then use marketing automation to move those leads down the funnel. And once the leads do their research and know what they want, they become sales qualified. They’re then passed onto sales, who perform an initial call to confirm them and begin the sales process.
And while Sales Ops doesn’t process those leads, they’re helping sales reps be more efficient with them.
RevOps Vs. SalesOps – the winner
When comparing SalesOps and RevOps, there’s no clear winner. Each function has its merits and serves different roles in a growing business. Their importance for your business tends to change and depends on its growth stage.
However, if you want to succeed, ultimately, you should consider investing in both.
Doing this will allow you to maximize the results achieved by both sales and marketing. Additionally, aligning the goals between Rev Ops and Sales Ops, helps you achieve a synergy effect.
This, in turn, is key to skyrocketing your efficiency and growing your market share. And, of course, to outperform your competitors. If you want to gain a competitive advantage in both sales and marketing, that’s where Encharge can help. Marketing automation can help you process and qualify leads and move them down the sales funnel for your sales team to close. Schedule a quick demo call to find out how Encharge can help your business.