Understanding the basics of revenue operations in your business 

HomeWork’s interview with Tom Parker 

Getting your revenue operations right is essential to facilitate business growth. ‘Revenue Operations’, put simply, is implementing the correct processes, systems, methods, tools and technologies in the customer-facing side of your business. Having a RevOps mindset early on can set you up for success right at the beginning of your journey. 

We sat down with Tom, a Revenue Operations coach and Business Club facilitator, to understand why setting up revenue operations is a fundamental starting point to any new business and what it specifically entails.

What are the challenges facing businesses today? 

In the long term, transformations in AI mean that there is ever growing potential for technology to either replace or optimise and augment jobs, specifically in the sales and marketing space. However, I see a short term opportunity for people to adopt and deploy AI in a way that will help them grow their business. 

The current economic situation, with looming recession and higher interest rates is leading to affordability issues in both the consumer and job markets. With the expectation of fiscal tightness just around the corner, if businesses can get ahead of AI and use it to their advantage they can ‘recession proof’ their business. 

Price competitiveness is another challenge facing small businesses. Offshoring and outsourcing to move towards a model where you employ people fractionally or on a temporary basis can help with this. When inflation sits at 10% and everyone else is putting their pricing up, if you can keep your pricing the same or even reduce it through HR cost efficiencies then it’s going to help you stick out in the market. Hiring on a part time basis or offshoring low value tasks will reduce your staffing costs, leading to increased margin or being able to pass on your cost reductions to your customers.

What would you say to someone starting in business?

I’ve been running my business for four years now. When I first started, I quit my job and didn’t have any customers to take with me because I was kind of changing career path. I was going from being a salesperson to a sales and marketing operations consultant. 

If you’re starting up a new business, it’s likely that you’re coming from an existing career. Try to find a balance between starting your new business and keeping your day job, start to build your business as a side hustle and get it to a point where you can feasibly switch from one to the other without a big impact on your quality of life and income. This will allow you to de-risk that move. 

This is the opposite of what I did, and now I realise I made it hard on myself! I didn’t make that much money for the first six months of doing my own consulting. By de-risking and taking it slow you’re in control of eventually taking that plunge. 

Currently a lot of new businesses (especially tech startups) are trying to acquire huge amounts of funding, chasing huge pre-seed/seed rounds as the only way to fundraise. Taking it slow and bootstrapping the business to get yourself to that pivotal point of making £10k a month, let’s say, in a sustainable-ish way (or at least breaking even) will allow you to set the scene to raise higher quality money. 

If you can continue to bootstrap and build the business without giving away equity, ultimately you’ll be wealthier as a result and have more control of your business. Retaining control of the business is particularly important in the sales and marketing process – it’s good to get advice from people but you’re (as the founder) always going to be the one that knows how to sell and market your product best. There are various methods you can use to improve conversion rates, but take it slow and steady, test and validate your ideas and grow without having pressure from investors. This is the best way to build a business in my opinion, having worked with both sides (heavily funded and bootstrapped startups).

Why does every business owner / senior manager need to know the basics of sales and marketing? 

I’m a sales and marketing operations consultant (also known as ‘revenue operations’). In my opinion, every Founder, Owner, CEO, and Managing Director needs to know the basics of every function. Sales and marketing are particularly important because without them, you don’t have a business. You could have the best product in the world but if you’re not getting it into the hands of your customers then you’re not making any money.

Knowing the basics is really important, even if that’s just an understanding of the buying process (how to attract prospects into your brand and engage them, educating them on the importance of your product, helping them through the consideration process, and then ensuring that they can purchase with little friction).

“Awareness, Education, Consideration, Purchase. Understanding that general theory of sales and marketing pipeline, from top to bottom, is very important.”

You don’t need to know exactly how to do each of these processes within 10 different channels, that’s what your sales and marketing management team are for. However, it’s important just to understand the basics to understand the importance of hiring the right people who can articulate your brand, sell your products and grow in the right way. 

Surrounding yourself with experienced, senior sales and marketing management people is worth its weight in gold. They are often expensive, especially sales leadership, but you get what you pay for. Learn as much as you can from webinars, blogs and research reports but having a really good consultant that you can have a weekly one hour call with, just to run your commercial challenges past them, is absolutely invaluable (even if you have a dedicated sales/marketing leader internally).

Why is it essential for small businesses to set revenue goals? 

If you understand sales and marketing, and the revenue generation process then you’re able to set goals for each of those four stages of the funnel that I mentioned; from awareness to education to consideration to purchase. There are goals that you can set within each of those stages of the funnel that help you move forward in the right way. 

Most people make the critical mistake of saying “our revenue goal for the year is to make 1 million pounds” and they don’t split that goal down into achievable, manageable, ‘SMART’ goals. SMART goal setting is really important because if you’re challenging your sales team to make a million pounds this year you need to be able to reverse engineer the day-to-day tactical targets. 

Example: In order to close £1 million, how much deal revenue do you need to have in your pipeline? You might open £3 million of deals because you have a 1/3 close rate. Going a layer deeper, in order to open £3 million worth of pipeline you might need to generate 100 phone calls a month, or send 1500 outreach emails a month, or produce 6 pieces of content marketing per week. Those manageable goals on a weekly, monthly and quarterly basis are actually what drives your revenue. Saying “we want to make a million pounds this year” doesn’t help you make a million pounds this year. Saying “we need to make 50 phone calls this week and from those phone calls we need to have a follow-up meeting with five of them” –  that’s something that you can measure and affect week to week. You can directly tie revenue back to those numbers. 

It’s easy to track these things if you’ve got a half decent CRM, even one of the free CRMs like HubSpot’s free tier. You can also get licenses very heavily discounted for startups. If you’re looking for something a bit more comprehensive, some CRMs can track these metrics automatically for you as long as you have your configuration correct. This is where I come in, if you’re looking to get better at setting achievable goals, measuring them and assessing your business performance against those goals, feel free to book me in for a session.

Why should you invest in a revenue operations coach?

Revenue Operations is broadly split into sales, marketing and customer success (aka. account management). The buying process starts with marketing right at the top of the funnel (eg. engaging with a content marketing video, social media post, or outbound email). Then you go into the sales funnel and you might speak to a sales rep and receive a demo or free trial, or go through some kind of self-serve buying process online. Once you become a customer the activity is around how to retain you and ensure you come back for more. That’s the revenue generation engine in a nutshell.

Those three areas of the business are very important, and support from a revenue operations coach can ensure that the  processes, systems, methods, tools and technologies that you deploy in those three functions in the business are fit for purpose and future scale. They’re someone that understands the importance of having a CRM, how to pick the right email marketing platform, decide on which marketing  channels you want to use, which external agencies can help you and how you might manage those agencies to deliver the best results. 

A Revenue Operations coach acts as your right hand person as a revenue leader or as a Managing Director, filling the gaps in your commercial knowledge and steering you in the right direction.

What’s involved? 

Weekly or fortnightly calls are common, with most clients coming to me with a particular marketing problem one week, or are struggling to close a certain customer deal another week. We also might look at the statistics coming out of the CRM and work out why conversion rates are reducing in certain channels. Basically, I work with them to help assess and understand what is happening in their customer-facing interactions.

There’s not that many of us, but the way that most of us operate is getting really deep into a client’s business. It’s not just on a coaching basis, we also do project work where we come in and we’ll actually get access to all of your tools and process documents. We look at your sales cycle, marketing material, account management team and how they operate. We can really get deep and help the managers of each of these teams understand what they’re doing right and what they’re doing wrong, making a much more targeted suggestion rather than just solving problems that are brought to us once a week. This all depends on the type of engagement, whether it’s coaching, project based or retainer based. There’s a broad range of things that I can help with on the commercial side of a business and right-sizing the scope of work to the problem statement it important so as not to be cost-ineffective.

Workspaces are an affordable way to be part of a community and have contact with people that I wouldn’t normally talk to. They’re great for developing new business as well. Even if you’re employed by a business as a developer, where you’ve just got your headphones on all day and you’re typing away, being in that environment being able to grab a coffee and chat with someone there for 10 minutes really helps to break up the day and improve productivity.

How are you helping our business club members? 

I’m offering a free 30 minute coaching session on anything to do with revenue within your business. Whether it’s sales, marketing, customer success or go to market activities. If you bring your top three problems to the session, we can pick one and I can help you solve it on the call. 

I’m also running a series of masterclass sessions at HomeWork. I’ve hosted one already and have another coming up; Sales for SMEs on Thursday 20th July at HomeWork Southfields. I haven’t managed to make it to a networking event yet but I’m planning to attend the Business Club event in September and will be there to provide support and chat through some of your challenges. 

If you’re a HomeWork member and a member of the Business Club, you can contact Abbie or Zara to arrange the free 30 minute session. 

The final thing to say is a bit ‘Thank You’ to the team at HomeWork for the opportunity to coach within the Business Club, and to all the people that I’ve met on the journey of being in the HomeWork community!