Resist the Shiny Object Syndrome - Scale Your B2B Business through Revenue Operations
In a recent discussion with a respected leader in the Sales Enablement space, I was asked to define Revenue Operations (RevOps). While this was a reminder of its still rather narrow application in the tech space, the discipline is gaining steam in other B2B markets given its very compelling value proposition. A study by LeanData showed that 35% of SaaS businesses are initiating or already have a RevOps team. Another study by SiriusDecisions showed that public companies with a RevOps function realized 71% higher stock performance than their peers who had yet to make the transition. These same companies had experienced 19% faster growth and 15% more profits by driving strategic and operational alignment across the GTM engine.
Against these findings, it’s no surprise that more and more leaders are seeking to better understand the scope and responsibility of RevOps. Yet, in such a fast-moving field, pinning a definition or label on RevOps is a lot like keeping your gaze on an Indy Car as it speeds by your trackside seat. Understanding the role requires walking up the stairs to the press box to get a better view of the race itself.
The Rise of the Customer Experience in B2B
While many of us spend our working days in the B2B space, we are all first and foremost consumers. In our consumption role, we have benefited from the explosion of digital technologies which provide goods and services better, faster, and cheaper than ever before. These have fundamentally transformed how and where we eat, meet, travel, park, and shop, et al. In our leap from the physical to the digital world, we have developed our own set of preferences and, in fact, expectations about what creates a delightful customer experience. Just like in the physical world, our expectations may differ from those of our family and friends. Despite these variances, firms like Google, Amazon, Uber, and many others are investing and innovating with the goal of delivering personalized experiences at scale. Their rapid progress against these initiatives have served to train consumers to expect an experience which gives us what we want when we want it.
Unfortunately, or fortunately (depending on your organization’s current capabilities), enterprise buyers, as consumers themselves, have also developed these rising expectations. As such, they are now bringing heightened expectations to the B2B buying process, forcing us to raise the bar in our own organization. According to Lumoa, 80% of B2B buyers are not only looking for, but also expecting a buying experience like that of a B2C customer. As a result, and for the first time ever, customer experience has overtaken price and product as the biggest differentiator in the buying process. Yet, not surprisingly, B2B companies have yet to crack the code here. A study by McKinsey claims that while B2C customer-experience index ratings hover around the 65%–85% range, B2B companies average less than 50% - so why the big delta in the performance gap?
No doubt, orchestrating the customer experience in B2B is considerably different than the B2C space. In B2B, the customer experience often spans years and predates the contract term if you factor in all your activities related to engagement, education, opportunity management and contracting. The complexity of the enterprise sale often requires you to call upon other subject matter experts as you engage 6-10 decision makers across the buying process. In many cases, these decision makers are not even the ultimate users of your solution. Managing a consistent customer experience gets complicated quickly.
As is the case in the B2C space, in the race to deliver a great experience, the tendency is to turn to technology. In fact, many of the articles related to customer experience discuss the rapid advancement of new tools and technology such as machine learning and artificial intelligence enabling super-powered CRM applications. These are great technologies to help you identify a potential customer, narrow in on their preferences or zoom out to get that 360-degree view of their business. However, in the B2B space, these technologies are most often used to enable customer-facing teams in advance of a customer interaction (e.g., product demo, finals presentation, QBR, etc.), not at the “point of sale.” Thus, until that day when we’re replaced by robots (hopefully not too soon), the actors in the customer journey are still very human, each with their own set of motivations, preferences, and sometimes unpredictable behavior. Sprinkle in the impact of Covid-19 on accelerating the pace of distributed work and aligning the organization to deliver a seamless customer experience becomes very daunting.
The Steward of the Outside-in Perspective
Returning now to the definition of RevOps and our walk up the stairs to the press box to get a better view of “the race.” With the customer experience as the currency of competitive advantage, having a team oriented to the outside-in perspective of your ideal customers is paramount. In the absence of this perspective, functions like Marketing, Sales and Customer Success tend to “optimize locally” based on their own goals and objectives (e.g., Sales hitting quota) vs. the broader customer experience. As a result, the customer gets bombarded with pitches from Sales, emails from Marketing, release notes from Product, invoices from Finance, et al, leading to anything but a seamless customer experience.
The role of RevOps is to transcend the inside out view of each of these otherwise siloed functions. Contrary to more traditional definitions of RevOps, it’s not just about “holding teams accountable for revenue growth.” While accountability may drive focus and attention, it is an input, not an outcome. The primary objective of RevOps is to harmonize the company’s collective assets to deliver a consistent and differentiated customer experience. This outcome is synonymous with your ability to accelerate predictable revenue growth.
While we all may agree on the importance of alignment in theory, putting it into practice is not for the faint of heart. RevOps typically becomes a priority as a company seeks to cross the chasm from growth to scale. This is generally a time of significant change within the company as it transitions from entrepreneurial to professional management. Taking a hard look at the underlying architecture of your customer-facing assets is not always welcomed by leaders who have long benefited from significant autonomy and control over their respective fiefdoms. Instead, the tendency is to fall victim to the “shiny object syndrome” looking for the next tool, process, or project which will magically facilitate the transition to scale. As such, each project, treated as such, is met with the scrutiny it deserves and often fails to receive its due attention given the competing demands of the business. Without a vision of the bigger picture, a compelling case for change and strong executive support, those leading these projects experience a “death by a thousand cuts” much to the detriment of the broader organization.
The RevOps Blueprint and Playbook to Drive Transformative Change
The pace of change in today’s economy can be unforgiving for those who underestimate the organizational transformation associated with scaling their business. With business failure rates at close to 50% after five years (Source: U.S. Bureau of Labor Statistics), companies can no longer afford to lose precious time from several failed attempts. They must not approach the change as a series of projects which, taken together can overwhelm the organization and distract its attention from hitting its goals and targets. Instead, they need to approach the change as a program, driven by a thoughtful strategic roadmap and executed through a series of sprints which can be digested by the business as it continues to meet its operating commitments to its customers, employees, and investors.
Fortunately, there is a Blueprint and Playbook for defining and navigating your change journey and it is grounded in the three organizational capabilities present in high performing companies. These include:
1. Alignment: High performing organizations align teams to deliver a compelling customer experience to a clearly defined market.
2. Commitment: High performing organizations commit resources, processes, and tools to enable the team and support the revenue plan.
3. Execution: High performing organizations execute revenue plans with a strong governance framework to measure progress and drive continuous improvement.
High performing companies check the box on all three of these organizational capabilities. In fact, falling short at any one of these capabilities becomes a disqualifier for achieving scale and driving peak performance. For example, companies which are great at aligning teams and executing plans, but which fail to provide the necessary resources and investment set their teams up for failure and thus create more contempt throughout the organization. Alternatively, those companies which fail to align teams around the vision and case for change create organizational divisiveness as some may feel they are “on the outside looking in.”
A helpful first step on your change journey is to benchmark your organization’s current maturity in each of these three organizational capabilities. Through the lens of RevOps, there are four organizational competencies (the Four P’s) you should evaluate when assessing your relative maturity. These include:
1. Prioritization: the organization’s ability to focus its limited resources against a defined addressable market where it can win profitably.
2. Positioning: the organization’s ability to clearly communicate its value proposition to a defined set of buyer personas at each stage of the buyer journey.
3. Process: the organization’s ability to apply the right resources and execute the right activities which deliver a superior customer experience at each stage of the buyer journey.
4. Performance: the organization’s ability to create a performance-based culture focused on continuous learning and improvement.
The results of this initial benchmarking assessment are a helpful starting point for developing your strategic roadmap and starting your journey to compound the enterprise value of your company. As a strategic roadmap (vs. a one-off project), you can communicate the broader vision and case for the change and appropriately manage the change journey while meeting the near-term commitments of the business.
Conclusion
The rising importance of the customer experience has elevated the role of Revenue Operations in the modern enterprise. As the new currency of competition, the customer experience is now how companies build, grow, and compound the value of their companies. The foremost priority of RevOps is therefore to upgrade the organization’s alignment, commitment, and execution capabilities to deliver a seamless customer experience as the primary input into accelerating profitable and predictable revenue growth. With the increasing speed of change, the costs of failure and delay have never been higher. Starting with a proven Blueprint and Playbook is a must for any organization looking to get to the next level, scale their business and create disproportionate value.
“The secret to getting ahead is getting started” – Mark Twain