Many businesses still struggle to understand the concept of revenue operations (RevOps), and we understand seeing this first hand. However, misconceptions about RevOps often lead businesses to limit this function to revenue. In reality, it is much more than that.
Revenue operations are extensions of your top three business functions: sales, marketing, and customer experience. To gain visibility over RevOps growth for your business, prioritize integrating these functions closely with revenue operations.
This blog post will give you a clear idea of how the ROI of RevOps works.
Factors that Impact RevOps ROI for B2B Businesses
B2B businesses need to change their approach towards RevOps. Instead of focusing on revenue, they must look at the bigger picture. Factors that directly affect RevOps ROI for any business include:
- Enterprise value
- Scalability
- Market position
Let’s understand each factor in detail.
Enterprise value
Enterprise value is not just about ROI or revenue growth. The famous ‘Rule of 40’ states that a company’s total revenue growth and profit margin should be greater than or equal to 40%.
A significant factor in deciding profit margin is customer acquisition cost (CAC). If your CAC is high, your profit margin will not be optimal even if your revenue grows month over month.
Therefore, B2B businesses should invest significantly in pre-onboarding experiences. Pre-onboarding experiences involve investing in self-served initiatives that reduce your CAC to meet profitability goals.
Scalability
Sometimes, the pressure of acquiring costumes at costs gets in the way of sustainable retention for B2B SaaS companies. Poor ICP fit customers churn. While companies prioritize growth to meet investor demands or scale fast at all costs, they can lose sight of the bigger factor: scalability. Initially, businesses should focus on building processes and systems that help them scale in the growth phase. Once scalability is achieved, businesses can easily accommodate a large volume of customers. More volume means higher revenue growth.
Sustainable growth and market position
To discuss the ‘bigger picture,’ another aspect that matters here is a brand’s market position and growth mindset. While each industry has multiple players, in the long run, only few brands dominate their market segment.
For example, think of CRM tools – it’s HubSpot and Salesforce. Contact data intelligence, it’s ZoomInfo, Apollo, Lusha. We are not saying there aren’t alternative tools, but leaders remain top of mind.
Our point is that a business’s initial focus should be on sustainable growth. While scale through net new customer acquisition remains a focus for early growth businesses, it is short-term. If you are unable to retain your customers, large churn month-on-month even if revenue growth remains steady can lead to loss in market share in the long run. Instead, focus on sustainably growing your brand, prioritizing acquisition and retention, and making a strong presence in any industry. Strategic approach to building out your RevOps helps you align your growth goals with a clear view of your customer data across the funnel.
We Can Help
NorthMetric can help you through the process – from revtech stack evaluation to setting up your RevOps processes.
Want to know our process? Contact Us→
