Revenue Operations vs Sales Operations: Key Differences

Request a demo and see how it was built to be the system of record for RevOps. For automation technology to achieve successes like increasing sales velocity in the revenue operations context, it must be strategically and precisely implemented. Certain software might allow you to manage all revenue apps from one central location and then deliver revenue impact analytics to your teams so they can defend marketing spend and prove revenue impact. When aligning the marketing, sales, and customer success operations departments, more people in your company become dependent on maintaining this alignment. Of course, any business process is only ever going to be effective if it’s properly measured. This is why RevOps requires agreeing on data strategy and governance to collectively support decision-making across every stage of the customer journey.

To find your startup’s revenue, you multiply the average cost of a good or service by the number of times it was sold. Don’t forget to add up revenue from credit card transaction fees or convenience fees as well. In many cases, non-operating revenue is more sporadic than operating revenue and is less reliable as a consistent source of earnings.

Agreement on metrics among departments.

Sales operations (Sales Ops) supports the sales team by providing them with the tools and processes they need to sell effectively. With this alignment comes the sharing of tools and even people, like SDRs in the sales department, who bridge the gap between marketing and sales at the top of the funnel. The need for revenue ops comes from the fact that in many B2B organisations, the three teams work together to optimise the customer journey, rather than having their own delineated areas of responsibility.

There is a material move on the part of B2B organizations to better align sales, marketing, and customer support teams to sustain and accelerate growth in light of the forces and dynamics outlined above. The vocabulary most commonly used to describe this shift in commercial model focus is Revenue Operations (or RevOps for short). As the JCPenney example illustrates, the difference between revenue and operating income shows why analyzing financial statements can be challenging. It’s always prudent (and recommended) to consider multiple metrics to determine a company’s profitability before making any investment decisions.

Benefits of RevOps

A profound shift is happening in the way companies are thinking about their revenue process. The need for transparency, accountability, and predictability from the board room to the front line is greater than ever before. Automating lead routing and qualification ensures your SDRs are focused on the most promising leads.

If you’re in the service industry, there is a way to measure your operating revenue, but it requires a bit more work. First, calculate your total revenue for the year—typically using your income statement or balance sheet (which will help you to understand how much revenue has been generated from each job). Earnings before interest and taxes (EBIT) and operating income are sometimes used interchangeably, but they are not the same. While operating income equals revenue minus operating expenses, EBIT also subtracts the cost of goods sold (COGS). Nonoperating revenue is the money that a business earns from side activities unrelated to its daily activities, such as profits from investments or dividend income. Operating revenue is revenue earned from a business’s main activities, whether selling goods or services.

Sales Operations vs. Revenue Operations

Forrester’s 2021 revenue operations survey of 316 respondents even discovered a significant shift towards driving the value and promise of revenue operations from within either centralized operations or selective centers of excellence. Software vendors create technology and tools to make it easier for organizations to break down silos within various departments and to better share data and information across the customer-facing departments. Companies like InsightSquared and Salesforce have tools that claim to improve data integration between departments and remove those silos.

As your business grows, you may develop other income-generating activities, but not all money coming into your business is considered revenue. The corporation, conglomerate, and business unit structures pioneered by Rockefeller (standard oil), Reginald Jones (GE), and Alfred Sloan (GM) respectively were all structural innovations that served their purpose in their time. But modern selling requires levels of speed, accountability, visibility, and teamwork that are unmanageable in a traditional functional stovepipe organization model. Customer churn is the percentage of customers who stop doing business with you over a specific period. A high churn rate can be due to poor customer service, changes in needs or requirements, or simply because customers have found a better alternative. Whatever the reason, it’s important to keep track of your churn rate so you can identify trends and take steps to address them.

How to Figure Out Net Operating Income

Everyone can manage the data they gather well and create a more thorough and effective approach to content. In recent years, the methods used to search for desired products have changed significantly. The shift is largely a result of e-commerce, which makes more product information available to consumers at just a click of a button.

It should also synchronize data automatically across channels in real-time and allow your teams to update easily whenever they want. Cost per acquisition (or customer acquisition cost – CAC) is the cost required to acquire a new customer over a specific period. By tracking your CPA, you can make informed decisions about your marketing and sales efforts and allocate your resources more effectively. Running revenue operations successfully can bring a competitive advantage to your business. The introduction of RevOps as a term and strategy is tied directly to a changing landscape of how organizations market, sell and serve their customers.

Companies in this sector will generate millions of dollars in revenue each year, working on a number of different projects. It’s also referred to as a value-chain map designed to help your staff understand the role each part of your company plays in addressing the other components’ needs. One fundamental misinterpretation about automation platforms is that they only exist to replace people or automate individual tasks. To improve the productivity efficiency or accelerate the speed at which deals are closed, any and all improvements made must be holistic in scope. Data aggregation from third-parties – integrate with other software in your company, ensuring your reps can have all the essential info they need at their fingertips. Producing short and long-term reports drawn from a wide range of data sources, with the goal of enhancing workflows and cross-departmental engagement.

• RevOps facilitates collaboration between departments that have a direct effect on a company’s or organization’s revenue.
• By equipping teams with methodologies and tools that provide stronger collaboration and visibility, RevOps seeks to break down the silos around people, processes, data and technology.
• Running revenue operations successfully can bring a competitive advantage to your business.
• If the building is sold at a gain, the gain will be treated as non-operating revenue in the year it was sold.
• CLV is important because it allows you to decide about acquisition, retention, and pricing strategies.