Moving From Revenue Technology 1.0 To Revenue Technology 2.0

What was Revenue Technology 1.0? Why is it time to move on from it?

Revenue technology 1.0 only covers the basics – it can be thought of as the first version of revenue tech. Revenue tech 1.0 attempts to drive revenue growth using revenue tools that are table stakes today, such as: 

• Marketing Automation
• CRM
• Email 
• Calendaring 

There are two primary issues with revenue technology 1.0:

• Systems are rarely integrated – leading to ineffective communication between systems and departments. This leads to ad hoc and inefficient processes, causing significant data and revenue leakage across your GTM. 
• A lack of the right revenue technologies leads to manual work – for example, without a sales engagement tool or a data provider, productivity and revenue per employee go down, forcing you to hire more people. Your sales team spends more time on manual activities and inevitably ends up losing deals because of this inefficiency.

Better revenue technology helps you get better results – if you have a revenue tech stack and processes that work seamlessly together, you can leverage your data to achieve results that weren’t possible in 1.0. For example, marketing can identify accounts with whitespace, feed them into the CRM, and subsequently into the revenue platform, alerting the rep to take action on high-value accounts. With accurate customer data, reps have clear guidance on which accounts to focus on, individuals to target, appropriate messaging, timing, and communication channel.

What is RevOps 2.0 and what are its advantages over RevOps 1.0?

Revenue tech 2.0 fills the revenue gaps by focusing on scaling through technology – rather than hiring more people. This addresses the shortcomings of RevOps 1.0 and leads to higher revenue, margins,  and EBITDA. It helps create a well-orchestrated process.

Effective technology integrations in revenue tech 2.0 may look like:

• Integrating a marketing solution with CRM – connecting your marketing funnel with your system of record
• Integrating a sales engagement tool with the CRM – connecting your sales funnel with your system of record
• Incorporating a data provider (e.g. Apollo, Cognism) – connecting your data and context with your sales activities

It increases efficiency and transparency in pipeline management – in RevOps 1.0, sales data is not automatically logged. Without automated and accurate data logging, it’s extremely difficult to determine what is effective, and what is not. The analysis of your team’s effort is left to the subjective thoughts of sales reps and managers.

Revenue tech 2.0 uses sales engagement to automatically capture data and signals – this offers sales teams visibility into exactly who reps are contacting, on what channel, and with what frequency. Sales teams also end up with insights into common objections, and how effectively they’re handled. With integrated data collection, these insights are automatically generated.

Case Study of Revenue Tech 1.0 vs. 2.0:
Inbound Revenue, $700,000 in Revenue Loss Eliminated with an EBITDA margin of +60% (~ 15% company-wide)

What kinds of companies should look to transition to revenue tooling 2.0?

This transition is less relevant for small companies – startups don’t yet need to invest in scaling their revenue tech. They should focus on establishing product-market fit. 

B2B companies with 5-10 salespeople are ready to consider revenue technology 2.0 – if these companies are looking to grow without adding a lot of headcount.

What are the different practices that can be optimized within the transition to revenue technology 2.0?

• Persona to Playbook – from identifying a persona to creating a persona-specific playbook.
• Inbound to Pipeline – from when an inbound lead is captured across various channels, to setting up a meeting and opening an opportunity.
• Outbound to Pipeline – from identifying a prospect, to setting up a meeting and opening an opportunity.
• Account to Mutual Action Plan – from identifying a white space opportunity within an account to creating a mutual action plan.
• Mutual Action Plan to Pipeline – from creating a mutual action plan to identifying and prospecting into the right account and people.
• Pipeline to Reporting  – from completing a pipeline activity to gathering reports on the effectiveness of the pipeline generation activities.
• Record to Enrichment – from identifying a record to enriching that record and preparing it for prospecting.
• Nurture to Engaging – from nurturing a lead to re-engaging that lead.

For each stage in revenue ops 2.0, what are the best practices, KPIs, people, and tools?

Key processes for inbound to pipeline include: 

• Preventing pipeline and revenue loss – it’s not unusual for companies to lose up to 9% of revenue due to pipeline leakage, this needs to be closed first. After closing pipeline leakages, efforts can be directed toward generating more pipeline and closing existing pipeline.
• Create a journey for inbound leads – spend time determining what technology, what processes, and what people should be involved in attempting to convert that lead. 
• Develop nurturing paths for inbounds that aren’t ready to buy – for instance, if a lead expresses interest but indicates a lack of budget at the moment, they should not be subjected to generic marketing sequences. Instead, they should be placed in a tailored time-based sequence that aligns with their specific situation (budget cycle). Companies are missing a lot of revenue by not taking into account the second and third iterations of leads.

As with inbound to pipeline, it’s key to utilize the right revenue technologies – this is particularly the case for outbound pipeline as it can be very time-consuming if done in an ad-hoc manner.

Create a Mutual Action plan – a mutual action plan entails you creating a plan to add value to a prospect, and asking for their feedback. Traditionally, this is done after a lead has entered into the pipeline. However, leading companies are creating a mutual action plan first and using it as a prospecting tool. For example, by approaching the prospect and saying, “I’ve been researching your company. Here’s my understanding of your business and the challenges you’re facing. How accurate is my understanding and what did I miss?.” This approach becomes more consultative rather than just asking for a meeting, which is working less today as prospects are overwhelmed

Key processes for mutual action plan to pipeline include: 

• If not done at a previous opportunity, create a MAP – Mutual Action plans can be used for new and existing accounts. Cross-selling and upselling can be achieved with an existing customer. 
• Use your ICP as a guide to your approach – most companies will have multiple ICPs. Make sure your MAP aligns with the key ICPs and initiatives they’re working towards. This allows for multi-threading and activating the right stakeholders.

Key processes for pipeline to reporting include: 

• Ensure that the right systems are in place – focus on data accuracy and establishing baselines for desired outcomes. 
• Measure conversion rates to ensure you’re prospecting effectively – quantity is not the only metric here. Understanding the frequency of touchpoints per week and the number of prospects within each account is key.
• Automate your processes – ideally, your system should be able to log everything automatically, providing visibility into the daily activities of your sales team. 
• Managers should coach to address any prospecting issues – there should be a daily stand-up meeting and at least a weekly evaluation to discuss pipeline generation results, address challenges faced, and how to overcome these e.g. objections.

Key processes for nurture to engage include: 

• Implementing drip campaigns – while pipeline metrics often focus on conversion rate, remember everyone who does not convert. If 100 leads come in this month and you convert 20 of them, that’s a good conversion – but you shouldn’t forget the other 80 leads.
• Retarget unconverted leads with the appropriate nurturing branch – in revenue technology 1.0, these leads were often left cold or fed back into a generic marketing campaign. Instead, create different branches, or sequences, for different objections. If 20% of unconverted leads indicate that they are using a competitor, place them in the appropriate nurturing branch.
• Collaborate across sales and marketing – sales should review unnurtured leads with valid reasons every two or three days, and then place them in a nurture sequence. Marketing should help in creating an accurate nurture sequence for a particular objection and automate where possible.

Enrich records to target accounts effectively – for instance, let’s say you aim to target Lower Mid-Market PE firms on the West Coast. Initially, you find 100 accounts and then identify 10 people within each account. You have 1,000 records of individuals, but many of them lack phone numbers, emails, or location information. Therefore, you can’t efficiently prospect yet due to missing data points. Enriching these records beforehand avoids inaccurate data, low conversions, and sales.

Development of an Ideal Customer Profile (ICP) is crucial – ICPs cover the initial identification of accounts or contacts and the subsequent sales methodology. They significantly influence sales success. 

Know how many ICP playbooks you need – if there are five different ICPs, there might be five distinct playbooks tailored to each. The level of customization in playbooks depends on the value of the target audience. For example, if targeting C-suite executives, a specific playbook is needed, while a broader approach might suffice for individual contributors.

Where should organizations start in their transition to revenue ops 2.0?

Start with your destination and identify the gaps – then prioritize areas or leading practices accordingly. Technologies, like a car, take you from point A to point B, but the most important thing is knowing your destination. Ultimately, it’s about executing and iterating from there. 

Define your strategy and use technology to accelerate execution – understanding your strategy and objectives and operationalizing them is extremely important. Are you focusing on new markets, launching new products, or expanding within existing accounts and markets? What is your revenue strategy and drivers? This will determine the key initiatives, workflows, how the team is enabled, technologies deployed, and metrics tracked.

Conduct an audit of your current systems and processes – to assess if your current state is aligned with your strategy. If you’re planning to enter new markets, identify what is needed to achieve that goal. You likely need to focus on outbound pipeline, improve pipeline process, create a process for learning, and an efficient pipeline reporting system. Maybe you also need to establish account mutual action plans, especially when targeting larger accounts. Prioritize addressing these gaps based on your strategy.

What are the most important things to get right?

Operationalize your strategy to daily sales activities, and tasks – this allows you to determine the current workflows, establish a baseline, and identify gaps.

Technology integrations – enhance productivity, pipeline, and data by using the right set of revenue technologies.

An effective transition to RevOps 2.0 – looks like organizations defining their strategy, conducting audits of current systems and processes, prioritizing areas for improvement based on their objectives, and then integrating technology to help them reach those goals.

What are common pitfalls?

Change management – for larger companies, in particular, culture and organizational change can be difficult. Just because you’ve always done something in a certain way doesn’t necessarily mean it is the most effective. 

Reinventing the wheel – there are a lot of resources and tools at your disposal. There’s no reason to reinvent the wheel; instead, focus on utilizing the best practices that are tried and true.