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Manufacturing & Distribution

Revenue Operations: The Key to High Performing Commercial Organizations

Alexander Group’s 2023 RevOps Study Shows that Effective RevOps Functions are Foundational to Driving Profitable Growth

Revenue Operations is a best-kept secret in the manufacturing and distribution industry. The first page of a Google search of the term will lead you to two dozen articles with the headline, “What is Revenue Operations?”, in an effort to drive awareness. However, unlike other buzzwords you may come across in the business world, there is concrete evidence that Revenue Operations is a primary driver of commercial success.

Manufacturing companies in the U.S. and Europe have been severely impacted by macroeconomic factors like supply chain disruption. These types of headwinds commonly lead to product, technological and commercial innovation, as the industry collectively realizes that business-as-usual is not enough to hit numbers. Revenue Operations is not a brand-new concept, but it has evolved significantly in recent years as adopters have aimed to ignite growth during challenging times. “Sales Operations” is the more widely known legacy term for a company’s revenue-enabling team. However, that is now only a subset of an expanded function designed to meet the objectives of modern commercial organizations. Research from Alexander Group’s 2023 RevOps Study shows that effective Revenue Operations functions are foundational to driving profitable growth, increasing marketing, sales and service collaboration, and streamlining advanced data and insights.

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Growth and Margin Driver

Effective Revenue Operations (RevOps) functions enable commercial teams to optimize growth and margins. Alexander Group’s latest research indicates high-performing RevOps teams drive 1.6x higher EBITDA margin and expected growth than peers. These results are achieved by prioritizing efficiency over capacity. Chief revenue officers are becoming more reluctant to solve growth issues by simply hiring more salespeople. Instead, they are investing in RevOps resources as a bet to marginally increase average seller productivity which will yield a greater, more sustainable cumulative ROI. Key revenue operation disciplines for improving growth and margins include training & enablement, territory & quota design, sales compensation, pricing, analytics & reporting and market intelligence.

Marketing, Sales and Service Collaboration

Siloed functions in commercial organizations are the biggest inhibitor to customer-centricity. 78% of high-performing Revenue Operations functions combat this issue by having their RevOps leader report directly to the CRO or CEO. This reporting structure enables the following:

  • Aligning Marketing, Sales and Service under the same umbrella
  • Insights that ensure engagement across the customer continuum
  • Connection to the future-state business model

The elevation of this leadership role is critical for empowering the Revenue Operations function to be seen as a strategic partner. This helps to create the connectivity needed to remove silos, increase collaboration and improve customer experience.

Advanced Data and Insights

The evolution of Revenue Operations has primarily been driven by advancements in data and analytics capabilities. High-performing RevOps teams emphasize centralized analytics, data science and technology as foundational disciplines. Creating a sole source of truth allows RevOps teams to deploy data scientists to conduct innovative analytics to provide more valuable insights. Artificial intelligence and machine learning tools have enabled more precise predictive analytics for business leaders to project outcomes. Prescriptive analytics combine strategic planning decisions with scenario-based modeling to find optimal go-to-market solutions.

High performing organizations and RevOps

Revenue Operations will lead Commercial Organizations into new ways of working in the future. As awareness increases, many companies will quickly realize that they already have many of the building blocks of a revenue operations team (e.g., sales ops, marketing ops and service ops).

The key next steps to kick off this transformation include:

  • Integrating disparate teams and formalizing the function
  • Determining Revenue Operations place in the organizational structure
  • Assessing current-state talent and tools
  • Creating a roadmap and execution plan

Learn More

Join the fast-growing number of high-performing commercial organizations utilizing RevOps. If you are interested in learning more about how Alexander Group can assist your organization in creating a roadmap for your revenue operations journey, please contact one of our practice leaders today.

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