In Part I, we learned that Revenue Operations represents a bold new commercial model for the twenty-first century to create sustainable and scalable business growth. It has two components: a management system for aligning the people in your revenue teams, and an operating system for combining and connecting the technology, channels, processes, and data in your business to generate more consistent and scalable growth.

In next few chapters, we focus on the first component, the management system for Revenue Operations. We'll lay out six specific pillars related to the people, process, and technology of revenue growth and go into the detail behind each one (see Figure 3.1). We'll also look at some core leadership principles. And we will then present three alternatives on how to structure leadership of your revenue teams and the commercial operations that support them.

What does it mean to have a management system that aligns marketing, sales, and service to generate more consistent, scalable growth? The answer breaks down into six specific pillars for managing the people, process, and technology of revenue growth: commercial leadership, commercial architecture, commercial insights, commercial asset management, commercial enablement, and commercial operations.

1. Commercial Leadership that unifies marketing, sales, and service: Top-down leadership models to empower and endorse the transformation of the commercial model to unify sales, marketing, and service into one revenue team and become more accountable, data-driven, and customer focused.

   

2. Commercial Operations that consolidate and support all growth-related functions: Ways you can reconfigure the operations that support growth to provide end-to-end coherent management of all sellers, customer-facing assets, enabling investments, and the customer journey.
3. Commercial Architecture that maximizes the return on selling assets: More systematic and data-driven ways you can design and optimize the many variables in the commercial architecture – from targeting and segmentation to selling channel design and incentives – to maximize return on selling assets in terms of speed, visibility, productivity, and engagement at a lower cost to sell.
4. Commercial Insights that are built upon customer engagement and seller activity data: The ways you can turn your customer engagement and seller activity data into commercial insights that create value and inform decisions, actions, and conversations at the key points of leverage in the revenue lifecycle.
5. Commercial Enablement that turns your technology into a “force multiplier”: Smart ways you can deploy scalable enablement technologies that multiply the effect of your salespeople to generate more profitable revenue growth with fewer resources.
6. Commercial Asset Management that leverages best practices for managing data, technology, content, and intellectual property assets: The strategic management of the data, technology, content, and “selling IP” assets to maximize their utilization, impact, and contribution to revenue and profit growth outcomes.

These six pillars can be detailed even further. Our research identified 18 discrete steps that best-in-class, leading organizations are taking to better align commercial revenue teams, operations, data, and processes and to grow faster at lower cost. Individually, these actions can be piloted, sequenced, and measured to create economically viable, bite-size steps that move your organization through a transformation in ways that are politically, practically, and financially achievable. Collectively, these steps can yield transformational results.

Not every action will be equally important to every business. For example, the managers in slow-growth industries can generate higher valuations by focusing their revenue teams around a more precise set of high-opportunity clients, creating a culture of continuous improvement in the commercial process, and eliminating price, margin, and revenue leakage along their customer journeys. Faster-growing cloud companies can create exponential growth with high levels of net recurring revenues by unifying commercial operations, revenue teams, and assets around a single customer journey and by enabling ABM, personalization, guidance, and coaching in real time.

Here are some examples of how different organizations take different paths to build their management systems:

• CEOs in slow-growth industries can generate higher business valuations. You can create more value in several ways. One is by focusing your revenue teams around a more precise set of high-opportunity clients. Another is to create a culture of continuous improvement in the commercial process. Large and slow-growing businesses will also benefit greatly from redesigning their commercial architectures to improve the speed, engagement, and performance of their revenue teams. A fourth way to squeeze more growth out of your revenue team is by better managing the commercial process across the business. This involves assigning an individual accountable for finding ways to eliminate price, margin, and revenue leakage along your revenue lifecycle – which extends from awareness generation to account-building activities. For example, by establishing a single point of management across the entire revenue lifecycle it is possible to quickly eliminate the handoffs and “air gaps” in the prospect-to-cash cycle (a process that spans marketing prospecting and extends through purchase and payment). This will limit revenue and margin leakage.
• Executives leading large, complex enterprises can become more “agile.” This will allow their teams to pivot more quickly to pursue emerging market opportunities and adapt to change. Some of the ways you can become more agile involve breaking down functional silos and using prescriptive commercial insights to improve the speed, engagement, and productivity of your selling teams. For example, you can likely unlock growth opportunities within your customer base quickly by using predictive insights to better focus account priorities based on potential, propensity to buy, and coverage difficulty. Managers trying to become nimbler in this way are demanding higher returns on their data, technology, and content assets. They are inventorying and evaluating the effectiveness of their growth technology portfolio, customer data, and content assets to identify ways to reduce overhead and increase speed. Most large companies will find immediate opportunities to rationalize the technology portfolio to eliminate waste, redundancy, or nonperforming assets. Once your portfolio of selling tools is pruned, you can create more value by connecting the elements of your selling systems to simplify and streamline the seller experience.
• Organizations undergoing business model transformation are trying to shift their selling approach from selling offerings like spare parts or “on-premises” software licenses one at time, to subscription-based services, or software as a service (SaaS), or “anything” as a service. Recurring revenue streams like these are more predictable and profitable. But they also require a different selling approach. If this is what your business is trying to do, you can accelerate the shift to a recurring revenue model by aligning sales, marketing, and customer teams around a common purpose of generating customer lifetime value and a superior customer experience.
• Hyper-growth cloud companies can create exponential growth in several ways. One is to unify their commercial operations (e.g. marketing operations, sales operations, advanced analytics, or training and development) and revenue teams (including success and service agents and marketing development, business development, account development reps) around a single customer journey. Another is to focus your enablement teams (like sales enablement, sales engineering, Revenue Operations) on finding ways to use technology as a force multiplier. These are company-wide programs that enable what we call “scalable” technology programs. These are systems that help you sell more without adding staff or budget. Examples of programs that can multiply the efforts and budgets include tools that help sellers personalize offers and proposals automatically. Managers often call this one-to-one personalization at scale because one machine helps hundreds of sellers personalize faster and better. Account-Based Marketing (ABM) programs are another “scalable” technology because it connects signals from marketing to account teams to help them develop accounts better. This allows your entire digital marketing and media budget to directly support frontline sellers. Using AI to provide real-time selling guidance can help sales managers to monitor, support, and coach many sellers at the most teachable moments. This is much more efficient than slogging through ride-alongs and coaching sessions in non-selling situations. This can multiply the efforts of managers, a very scarce resource. We will explain these smart and scalable actions in chapter 11 in more detail.

Later in the book we will provide a maturity assessment and financial framework to help you to systematically identify the current state of your capabilities, what actions you can take to get better, and what the financial impact of such actions would likely be.

Commercial Leadership That Unifies Marketing, Sales, and Service

Commercial transformation starts at the top because it requires change management and a commitment to culture change and teamwork. Moving to a Revenue Operations model requires top-down leadership, from the CEO on down. It takes leadership to empower managers and endorse the transformation of the commercial model because those things are risky, and managers are risk averse. Ultimately, only the CEO or chief operating officer can unify sales, marketing, and service into one revenue team because that is the only manager to whom these functions report.

In conjunction with the move to Revenue Operations, a new generation of growth leader has emerged, reporting to the CEO. This leader must have the span of control and remit to get sales, marketing, and service teams working together. They must have the skills, acumen, and credibility to push all the players on the revenue team to become more accountable, data driven, and customer focused. And they must find ways to get the people, process, and technology of growth in the business working more like a system toward a common purpose – growing customer and company value. We call this executive a CXO because it is a new role and one that has many titles. The “X” can change, but the mission does not. CXOs can be called chief customer officers, chief revenue officers, and chief growth officers and many other names. We will better define the CXO roles, and the three different leadership models that successful organizations are using to unify sales, marketing, and service.

Denise Karkos – the CMO of Sirius XM & Pandora and a former Division I soccer player – is a good example of a CXO. She understands the importance of working as one team toward one common goal. “In sports the scorecard for success is very clear – you win or lose as a team,” points out Karkos.¹⁰⁵ “In business, each person has an individual definition of success. The opportunity in sales and marketing today is defining the win for the entire team. You can't delegate or outsource that job. As a leader, you can set the tone from the top.”

Sales leaders at AT&T and Splunk have learned that team selling has proven to be more effective. This puts pressure on CXOs to establish organizations, systems, and incentives to get all of their customer-facing employees to operate as one revenue team focused on executing the corporate growth agenda and enhancing customer lifetime value.

Another area in which top-down leadership is important is ensuring that your company's investments in selling technologies and a digital sales infrastructure are getting results. According to Jeff McKittrick, Vice President of Sales Execution at WalkMe, top-down leadership is essential to using sales analytics and automation as a “force multiplier” to expand seller capacity and performance. “When it comes to generating financial returns from commercial assets,” Jeff McKittrick observes, “leadership needs to demand, commit to, and support the goal of leveraging sales analytics and automation as ‘force multipliers’ to expand seller capacity and enable scalable growth with limited resources. When that happens, enablement investments generate much higher returns. In my experience, sales effectiveness and productivity can be increased twofold or even more by giving sales reps the right tools, information, and content at the right time, and giving managers the insights they need to make better resource allocation decisions and sales performance metrics. The trick has always been management's commitment to leveraging sales automation technology in the selling process by providing the right incentives, culture, and user experience to get salespeople to use these tools.”

The top growth leader in the organization needs to focus on three areas to empower and endorse the transformation of the commercial model. This will help realize greater growth from existing resources. The incremental steps you can take to build these capabilities in your organization and the levels of sophistication within each competency include:

• Demanding accountability from every revenue resource, program, and capital investment. CXOs must demand full accountability for return on enterprise selling resources, assets, and investments by holding an individual accountable for the performance of the cross-functional commercial processes and for the financial return on selling assets and investments. For example, Lionbridge, a fast-growing translation and localization business, is establishing full accountability for financial outcomes for all growth teams, investment, and infrastructure assets. “Accountability is fundamental to scalable growth,” says Jaime Punishill, CMO of Lionbridge.¹¹³ “You have to hold marketing assets, investments, and front of the funnel marketing activity accountable for financial returns the same way you measure everything else in the business. That's fundamental to profitable growth because your job as the CMO is to get the CEO, CFO and CRO to understand and believe marketing is part of the growth equation. So we shifted our focus to understanding, measuring, and improving the contribution of the commercial assets we manage – digital technology, data, content, leads, and brainpower – to growth, profits, and firm financial performance. Over the past three years the percentage of revenues attributable to our marketing investment has grown from zero to 60%. Our return on selling content has grown significantly as we have become more scientific about what content to build, and why. We further leverage and reuse that content using systems that deploy it across digital marketing, website, sales, and service channels. Today we are driving five times the sales outcomes with thirty percent less marketing budget.”
• Assigning an owner of the enterprise commercial process, assets, investments. CXOs need to establish a single point of decision making for the entire enterprise commercial process – from prospecting to customer expansion – as well as the assets, investments, and systems that support it. You can do this by giving an individual decision-making authority over the cross-functional commercial processes, digital selling assets, and sales and marketing support operations. For example, fast-growing organizations like Splunk and Rev.com with investor expectations for organic growth expectations in excess of 50% have taken steps to consolidate the operations that support marketing, sales, and customer success under a single operational leader. A wave of larger enterprises – including Cisco, Honeywell, GHX, and Pentair – have all taken steps to centralize all operations supporting growth by establishing “CXO” roles with a broader scope and a remit to better manage commercial assets, the operations and enablement infrastructure, and the customer journey across the enterprise. For example, Cisco established a vice president–level Chief Customer and Partner Officer role that is responsible for worldwide sales and marketing, field operations, and partnerships across the globe. Their goal is to align the sales and marketing organizations around the company's go-to-market strategy and growth opportunity while still overseeing Cisco's brand asset (which represents over 15% of their firm value according to Interbrand).¹¹³ Smaller businesses are also consolidating their leadership of these core growth functions. For example, over 9,000 smaller organizations have put in place Chief Revenue Officer titles in the year leading up to the publication of this book, according to an analysis of job postings on LinkedIn.¹¹²
• Leading change management from the top down. Growth leaders must provide top-down leadership to enable the organization to transform the commercial model. They can do this by empowering top-down CXO leadership, which promotes a culture of growth, focusing on customer and common purpose across the entire revenue team. For example, Jim Chirico, the CEO of Avaya, established a common purpose across their entire revenue team by creating shared goals and incentives for all customer-facing employees. “We want our entire revenue team aligned around common goals, regardless of whether they are quota carrying, non-quota carrying or leadership,” says Chirico.¹³² “Our quota carrying reps are obviously [incentivized] by revenue. For the non-quota carrying employees in both sales and marketing we have a bonus structure that is built on the same revenue and profit metrics. And I am paid on the same incentives as the employees. We are all in it together. One revenue team. And I think that level of common purpose is extremely important, and it is a rallying cry for all of us.”

Commercial Operations That Support All Growth-Related Functions

Marketing, sales, and service functions in organizational silos are vestiges of a twentieth-century commercial model, which is based on a lockstep sales funnel heavy on face-to-face selling and paid media. In the twenty-first century, the customer experience has become the basis of competitive advantage, and the growth investment mix is dominated by owned digital channel infrastructure and the content, data, teams, and technologies that support them. To succeed in this new market reality, growth leaders will need to reconfigure the operations that support salespeople and provide end-to-end coherent management of all customer-facing assets, investments, and the customer journey. “The CEO may give lip-service to ‘customer centricity,’ but who in the C-suite actually owns the cross-functional authority, budget, and process engine to implement the growth technology portfolio, set up the teams that will track and act on the data, and propose the bigger breakthrough innovations that cut across typical silos?” asks David Edelman of the Revenue Enablement Institute.¹⁶² Managing cross-functional commercial assets, processes, and teams requires air cover and funding from their Chief Operating Officer, or from a newly created Chief Customer Officer, Chief Experience Officer, or other C-suite leader who has the authority to address tough issues that cut across the typical functional hierarchy of most large companies.

The operations and enablement teams that support frontline sellers must also better coordinate and unify their efforts to support one selling motion and one selling team. That “selling team” should include marketing and service operations, too, as both those functions play a bigger and bigger role as selling becomes more capital intensive, data driven, and digital. “Today one in four members of the revenue team are now in operations and enablement roles that don't directly face the customer,” according to Corey Torrence, Managing Director of Blue Ridge Partners, a consultancy that has studied and optimized the commercial operations of hundreds of B2B organizations. “This makes financial sense because an incremental investment in enablement has a huge multiplier effect. It makes dozens or hundreds of sellers more effective in terms of revenue per hour of effort. Unfortunately, most organizations fail to realize these economies because they deploy these critical operational capabilities across four to sometimes eight different organizations. This fragmented and piecemeal management of critical commercial assets like customer data, content, and the tools in the growth technology portfolio is a real reason most organizations have failed to unlock the full growth potential of analytics and enablement technology.”

Like the preceding commercial transformation, leaders have three key focus areas to reconfigure the operations that support growth and enable salespeople to provide coherent, end-to-end management of all customer-facing employees, assets, infrastructure, investments, and the customer journey. You can use these incremental steps to build these capabilities in your organization are outlined below and summarized in a maturity assessment later.

• Make common purpose an operational reality. A key to building and enabling a Revenue Operations model is to establish a common purpose across sales, marketing, and customer success teams by reconfiguring the operations to align the goals, objectives, incentives, and KPIs to create a common purpose and facilitate teamwork across all customer-facing employees on the revenue team. For example, Frank Jules, President of AT&T, created Total Billed Revenue (TBR) as a common measure of account and pipeline health for all customer-facing employees. “Total Billed Revenue is our biggest incentive because it looks at the whole picture and helps us grow our accounts,” reports Jules.¹²⁰ “As a comprehensive metric, it gives our reps the flexibility and incentive to manage accelerating product life cycles, new product introductions, product expansions, and product sunsets – all while retaining the business we have. At the end of the day, we expect our reps to figure out a way to grow. TBR is the measurement that best guides them. This also fits with our strategic focus on NPS (Net Promoter Score) as a critical driver of revenue, EBITDA, and EPS (Earnings Per Share) growth. It motivates our revenue teams to focus on customer lifetime value. Most of our revenue is under contracts. So, every year you have contracts up for renewal. Our customers can choose to change out their networks, mobility suppliers, and wireline suppliers. So, without strong customer satisfaction, we're not going to achieve our revenue goals.”
• Establish more cross-functional commercial organizations. A key to building and enabling a Revenue Operations model is to establish cross-functional organizational structures by reconfiguring the operations that support sellers across sales, marketing, and service functions including operations, and the management of data, tools, and analytics. For example, large companies like Ciena Network and hyper-growth businesses like Rev.com are taking steps to more fully integrate all Revenue Operations, enablement, and analytics functions with solid line reporting to a central operations function. “A really important step was putting in place a single Revenue Operations team with really solid, strong technical people from sales and marketing operations who can help us better leverage analytics to grow, reports Wade Burgess, the Chief Revenue Officer of Rev.com.¹¹⁴ “We used to have a sales ops person and a marketing operations team. Both of those were separate before. When I came on board and sales and marketing were both under me and I really wanted one person responsible for the operational tools, processes and systems that we use for monetization. It's a roll up of sales, Revenue Operations, and also sales effectiveness is in there and we're adding an insights person to that team. It's essentially all of the non-customer-facing roles.”
• Establish a single, multidisciplinary, commercial process across the enterprise. Reconfiguring the operations that support salespeople to better support a cross-functional commercial process that spans sales, marketing, and service functions, go-to-market channels and maps to the complete customer journey. For example, Pentair established a Commercial Excellence program that identified a number of ways to improve the “prospect-to-cash” process. These included customer segmentation, generating deep “voice of the customer” insights, and improving the product launch processes, to name a few. These are all potential areas to accelerate business with our sales and channel partners. “From a digital technology perspective, we've focused on the channel enablement process to provide our channel partners the information, insights, training, and visibility they need to realize more opportunities in their markets and share our performance end to end,” according to John Jacko, the Chief Growth Officer. “We have also initiated a more robust Voice of the Customer program to get much more granular and actionable customer feedback. It drives our segmentation, priorities, and plans, and changed how we believed customers behaved.” Like most of the executives we interviewed, Pentair has initiatives planned or under way to use AI to improve their customer journeys, revolutionize how they interact with customers, and deliver them more compelling experiences. For example, gaining visibility into the end-to-end commercial process is the key for Jacko. “Visibility is a big priority to our organization as we seek to digitize the end-to-end process and use technology as a force multiplier to make our sales teams and partners more productive. My view is visibility into granular sales activity and voice of the customer data is critical to getting sales, marketing, and channel partner teams working together. This includes improving the effectiveness of our partners, improving the visibility and ease of doing business with Pentair, and allocating resources to the best product, market, and client opportunities with a high degree of precision, all in the name of growth.”¹²²

Commercial Architecture That Maximizes the Return on Selling Assets

Growth leaders are reconfiguring their go-to-market strategies, sales force design, and territory and quota plans to reflect changes in customer behavior and response, the impact of enablement technologies, and the need to focus on customer lifetime value.

Such changes can add up to significant improvements in short-term efficiencies and long-term growth. To realize these gains, all aspects of the commercial architecture need to be updated to optimize coverage, control, cost to sell, and the customer experience and to reflect the productivity, engagement, and speed that enablement technologies and remote selling create. This involves redesigning the commercial architecture to maximize return on selling assets by improving the speed, visibility, productivity, and engagement of frontline selling teams and reducing cost to sell.

According to Corey Torrence, who has led a dozen Revenue Operations transformations in the past year, “A properly designed and optimized commercial architecture can contribute five to ten points of profit contribution to the bottom line in the short term, or if reinvested, can improve long-term growth prospects much more in the long term.” A good example of this comes from Avaya, a digital communications company with a OneCloud ecosystem model. Their CEO Jim Chirico and his team reconfigured all aspects of the commercial architecture, including refocusing commercial operations on growing customer lifetime value, and aligning goals and incentives with the subscription model in order to accelerate the business model transformation at Avaya from an on-premises business to a growing cloud business.

John Jacko, from Pentair, views more precise algorithmic models of customer demand and opportunity potential and the attainability of markets as a big advantage. “Our segmentation exercise brought the customer, their insights, and their journeys right into the room with us,” he reflects. That exercise disrupted individuals' personal, sometimes off-base, interpretations of customer experience. “Data wins and this was a real cultural shift,” Jacko concludes.¹²²

Redesigning the commercial architecture must focus on maximizing return on selling assets by improving the speed, visibility, productivity, and engagement of frontline selling teams while reducing cost to sell. Here are incremental steps you can take to make this happen:

• Redesign the go-to-market approach to improve performance and engagement. CXOs must redesign the go-to-market architecture to improve performance and engagement by restructuring market coverage, account targets, and segmentation to realize more opportunity with existing selling resources and assets. For example, the growth leadership at Pitney Bowes had to make some dramatic changes to their go-to-market architecture and a major shift in sales force focus, emphasis, and roles to accelerate sales of new solutions. Bill Borrelle, the CMO of Pitney Bowes, partnered with his peers in field sales and inside sales to refocus their go-to-market resource on new products, transaction types, and stages of the customer journey to ensure the business was creating channel efficiency and allocating the best-selling resource to the biggest opportunity. “We've focused salespeople on more complex and valuable transactions because the simpler transactions – a client buying supplies, a single piece of equipment that they will install themselves, or a lease renewal – can happen online,” reports Borrelle.¹²¹ “We need our valuable sales team working on complex transactions like an enterprise client that spans many locations. From an execution standpoint, segmentation and market sizing helped to understand the opportunity, and where to focus. For example, shipping clients will have more complex workflows, a greater mix of inbound and outbound volumes and bigger packages. We had to get more precise, and data driven to identify opportunities. We're starting to use data and analytics to create a new type of ‘selling book.’ We're also using IoT data from our equipment to look at usage, volume, size of package, and industry to better value, segment, and align selling messages and channel assignments.”
• Adapt the sales force design to improve speed, visibility, and engagement at lower cost. Growth leaders must adjust the sales force design to improve performance, engagement, and costs. This involves reconfiguring sales force segmentation (the roles within the sales team), sales force emphasis (what products they sell), seller compensation, and sales rep training and development strategy. Doing this well can significantly improve the level of customer engagement, speed of response, productivity, and sales outcomes that your sellers create. For example, over 85% of the CXOs interviewed in this analysis were redefining the segmentation of their revenue teams to adapt to these mega trends. They are adding development reps (SDRs, BDRs, MDRs, and ADRs) to manage engagement at scale at the front of the funnel, specialists to add value in the middle, and customer success managers (CSM) at the end to manage retention, usage, and upsell.

  For example, businesses like Flexential, Rev.com, Honeywell, and ChowNow are actively redesigning their sales force segmentation to clarify roles of their revenue teams across the entire revenue cycle. They are adding lead generation resources at the front to better tap into market demand. Product specialists to promote new product innovations and cross-sell new products to existing customers. They are also elevating the role of customer success to support an increased emphasis on growing customer lifetime value.

• Reconfiguring selling channels. Tamara Adams, the SVP of Sales and Marketing at Honeywell, had to redesign the sales force segmentation, roles, and incentives to find ways to shrink the sales cycle in order to compete in the SaaS market. “When I joined, standalone SaaS software was a new business to Honeywell,” reports Adams.123 “We had to redesign our selling channels from the ground up. A key part of this was to enhance the role of our Customer Success Managers (CSMs) as a key part of the model to manage renewals and client engagement, at a lower cost of sales. We've also had to define the role of our Key Account Management and Project Management Operations as the other big pillars of our lead-to-cash process.”

  Chris Downie, the CEO of Flexential, also had to adapt the coverage model by adding specialists who can better sell the full value of the Flexential platform. “The new product platform has evolved into two distinct solution sets – cloud managed services and co-located data center services,” reports Downie.¹²⁸ “Each of these product segments behave very differently in terms of how customers use them and the value they can deliver. We have folks on our sales team that can be good at selling one, but not as good at selling the other. We created a specialist overlay function to make sure that reps that were not as comfortable selling cloud and managed solutions have the ability to engage with the customers in their territories effectively to realize the full revenue and margin potential of our product portfolio and better communicate the unique value of concepts like Backup-as-a Service (BaaS) and hyper-scaling cloud management services.”

• Deploy sales performance management models and tools to better align with the opportunities. Growth leaders are using advanced analytics to help them reconfigure their territory definitions, quota assignments, incentives, and account priorities to better align selling actions, effort, and investments with revenue and profit outcomes. Digitizing the process of planning, managing, and optimizing territory boundaries, seller targets, and quota assignments has many benefits. It will (1) make the process faster and less expensive; (2) speed up the process of making mid-period adjustments and plan reviews; and (3) make their planning process more data driven, accountable, and collaborative. Such changes have the added benefit of providing managers more visibility into seller performance against goals. For instance, Frank Jules, President of AT&T Business, embraces using analytics to adapt his coverage and territories to changing customer demand and market response. “We're shifting to a more science-based territory definition within the vertical structure,” according to Jules.¹²⁰ “We have a sales operations team that runs analytics on things like the cost to serve an average client, what coverage models perform best, how quotas should be constructed by industry, and ultimately how we should compensate. This ties to our vertical focus because we're constantly rebalancing our allocation of resources and effort based on industry data. Is the healthcare, manufacturing, or hospitality vertical up or down? With Covid, our coverage and quotas have been disrupted. Transportation, hospitality, and airlines are struggling. At the same time, we knew that certain industries – like public sector and healthcare – were set to explode. Being data driven lets us set fair quotas based on competitive analysis and trends. This helped us turn on a dime early-on and figure out where we should double-down on resources and where we could lighten up on industries that were having a tough-go.”

Commercial Insights Built on Customer Engagement and Seller Activity Data

The emergence of advanced analytics, AI, and Machine Learning (ML) – and the massive new sales engagement data sets to support them – represents the most significant opportunity to accelerate sales growth since the scale adoption of call centers (40 years ago), Customer Relationship Management or CRM (30 years ago), and digital channels (20 years ago) in sales. The ability to capture and unify customer data and convert it into commercial insights is critical to support sales, marketing, and service conversations. Insights that improve decision making, prioritization, actions, and workflows fundamentally drive growth and value creation. This value increases when the insights inform decisions, actions, and conversations at the moments that matter in the selling process. Kirsten Paust, the VP of Fortive Business Systems, reinforces the growing importance of advanced analytics in the commercial process. “More and more of our core commercialization processes are being supported by AI, insights and technology that [enable] our teams to get to insight and action faster,” she observes.¹³⁰ Raghu Iyengar, Professor of Marketing at the Wharton School of Business at the University of Pennsylvania, echoes the importance of aggregating, orchestrating, and delivering actionable insights as the focus of Revenue Operations. “Having an automated way of analyzing such audio calls capturing the interactions with customers is critical to help answer operational questions, e.g. ‘who are our best live agents’ and ‘why are customers calling us?’”³² Professor Iyengar warns that many dashboards of commercial performance are improperly designed because they get the fundamental unit of analysis – customer health and lifetime value – wrong. “Many AI initiatives fail to get traction because their unit of analysis is mismatched with the engrained Key Performance Indicators (KPI) and incentives managers use to run business,” according to Professor Iyengar. “For example, AI models are excellent at analyzing data about customer characteristics, responses, and behaviors to refine scalable ways to improve customer lifetime value through improved acquisition costs, churn, pricing, usage, and cross-sell. But most of the data sets in the business are organized around products, geographies, and business units.”

Certain core capabilities enable the transformation of customer engagement and seller activity data into these valuable commercial insights. To improve performance and realize greater growth from existing resources, organizations should:

• Convert revenue data into prescriptive and actionable commercial insights. Convert revenue data into prescriptive revenue intelligence that informs day-to-day decisions, conversations, and priorities in real time. Better analytics support data-driven selling by better aligning selling resources and assets with opportunities. This also more intelligently routes insights to frontline sellers in real time to support their decision making, actions, and conversations. AI-enabled real-time guidance helps development reps, account reps, and customer success managers execute selling motions, playbooks, and value selling methodologies much more effectively. Sales leaders need to increase the speed of communication by providing real-time training and guidance to help frontline sellers respond immediately and completely to “new school” buyers and follow-up on signals of buyer intent or attribution while they still have time to affect the outcome. For example, Wade Burgess, the CRO of Rev.com, sees real-time customer analytics as a way to change the company's historic focus on new customers to cross-selling and upselling existing customers into enterprise accounts. “Analytics can also help us retain and expand those enterprise relationships,” says Burgess.¹¹⁴ “If an account has X amount of revenue forecasted for the year, but they're tracking above that number, a person on our team needs to be triggered to reach out and have a conversation with them to ensure they have the resources they need to be successful. This typically results in an add-on, upsell, or cross-sell opportunity. On the other hand, if utilization is way behind and we're three months into an annual contract, I want customer success reaching out right away to help them get back on track. This type of proactive engagement can significantly minimize churn. There's a gold mine of data opportunities for us to tap into.”
• Focus on KPIs, common objectives, and goals. CXOs need to establish fact-based reporting analytics, KPIs, and dashboards of commercial performance. Key metrics and indicators align sales, marketing, and service around common objectives, goals, KPIs, priorities, and incentives and provide visibility into buyer engagement, seller activity, account health, and pipeline potential. Sales and marketing leaders need to push their analytics teams to use advanced analytics and AI to turn their sales engagement data into a common set of measurements and financial incentives that get sales, marketing, and service working as a team toward the goals of growing firm value, customer lifetime value, and profits. Without these unified and harmonized customer and engagement data sets, managers lack the facts to agree on the best allocation of people, coverage, selling effort, and technology investments to realize the greatest opportunity and growth. For example, the CEOs of Avaya, Mphasis, and iCIMS are aligning incentives across sales, marketing, and customer experience functions to ensure they are focused on corporate growth priorities and growing customer lifetime value. “An important aspect of getting sales, marketing, services, and customer success to work as one revenue team was to align incentives around a common set of strategic growth goals, reports Jim Chirico, of Avaya. “Aligning our incentives and KPIs with our overall objectives is extremely important to achieving our growth goals, especially as we move from a product company to a SaaS / cloud company,” says Chirico.¹³² ”It is important to make sure that those incentives are driving the right outcomes and behaviors and drive accountability through the process as well. So, for the last four years we have spent a lot of time on incentive management as a senior leadership team. Every month the top 40 executives in the company review our incentives in excruciating detail.”

  Steve Lucas, the CEO of iCIMS, is focusing his revenue team on customer lifetime value by pushing his team to clearly define and quantify what a good client relationship looks like empirically on a scale of one to ten. He kept the bar high on engagement quality. Any account team with a customer engagement score of less than 9 had to take a series of actions to improve customer health. In parallel, he created a tightly defined customer persona called an Ideal Customer Profile (ICP). He created a vocabulary, criteria, reporting, and most importantly financial incentives for his go-to-market teams to develop relationships with these “ideal customers.” To enforce this discipline of delivering high-quality customer engagement to the highest potential customers, his teams were paid 20% higher commissions when they engaged and developed ideal customers, as opposed to when they spent their energies on less than ideal prospects.

• Develop predictive insights to improve account priorities and resource allocation. Growth leaders need to use advanced analytics to create better predictions to inform their investment bets and evaluate more scenarios to optimize resource allocation decisions. AI-enabled algorithms and advanced modeling techniques can help you develop more accurate and predictive estimates of opportunity potential and your sales forecast. They can also teach you more about customers – who they respond to, whether they intend to buy, and how they fit with your sellers, products, and treatment types. In the absence of analytics that quantify account potential and propensity to close, most organizations chase too many low-quality clients and opportunities – those where they stand little chance of winning but want to feel like they are still in the game, according to Cam Tipping, who has led over 100 customer targeting workshops and even more simulations with sales teams over the last decade. “This behavior leads to bad outcomes – like bad service, high cost to sell, lower margins, and unsatisfied clients. It's a basic 80/20 problem. But a difficult one to solve. No business that I have seen is aware of this issue until they go through the analytics to understand it,” continues Tipping. “Traditional CRM or financial systems are not set up to provide this type of information. It has to be understood through custom analysis and a review of client performance over multiple years. The data exists to create the facts that let us ‘cut the tail.’ And there are established tools like Deciling that can easily achieve consensus on the 80% of accounts not to call on.” For example, Peter Ford, VP of Global Sales at iconectiv, a private equity–backed solutions business that connects networks, devices, and applications in the communications industry, was able to leverage analytics to “cut the tail” off the customer curve. He did this by becoming more scientific about prioritizing customers based on readiness and potential, and enabled different levels of customer treatment to manage cost to sell in smaller “tail” accounts. “We use analytics to create the curve of our customers,” relates Ford.¹¹⁷ “So, we treat a customer that generates less than $10,000 of revenue for us a year differently than a customer that generates in excess of $20 million a year. Understanding when to take a light touch approach versus hands-on sales or when an account should be more marketing driven is key.”

Commercial Enablement Capabilities That Turn Your Technology into a “Force Multiplier”

Thousands of point solutions are built for the purpose of saving sellers time and making them more productive with customers.

One in four members of the revenue team is now dedicated to supporting frontline selling. To foster scalable and consistent growth, enablement and operations leaders need to focus these resources on achieving continuous improvement in performance and on finding ways to better support salespeople and maximize the contribution of selling assets and investments to revenue and profit growth. This cannot be done piecemeal across silos.

A unified capital expenditure and operating model is needed to execute scalable technologies that span budgets and organizations. These are programs that connect technologies from different parts of your business ecosystem in ways that make every customer-facing employee more effective. Some examples of these programs include initiatives that support personalization, coaching, and Account Based Marketing (ABM) at scale across the entire business. Another example is systems that help manage and measure the entire revenue cycle across many functions and systems.

These capabilities are critical to enabling human selling and maximizing the contribution of selling assets and investments to revenue and profit growth outcomes. Peter Ford reiterates the importance of focusing on ways to make continuous improvements to the commercial process as the path to transformation. “It's hard to pinpoint any one thing that was the key to fixing or transforming our sales organization, because it's really the sum of many different marginal gains,” according to Ford.¹¹⁷

A common core of commercial capabilities will enable salespeople and maximize the contribution of selling assets and investments to revenue and profit growth outcomes. The following actions will create a “force multiplier” in your business:

• Reconfigure enablement solutions to simplify day-to-day selling. Reconfigure the commercial technology infrastructure to better support revenue teams by enabling frontline sellers with the intelligent insights, content, leverage, and guidance they need to focus on the customer, prioritize the best opportunities, and take the actions that will advance opportunities and grow customer lifetime value. CXOs are doing this by “knitting together” the various pieces of their sales technology portfolios to build digital selling platforms that automate, simplify, and speed up selling by addressing the major hot spots in the selling process, according to Jeff McKittrick, who has led sales enablement at Cisco, Hitachi and WalkMe over the past 15 years. “Organizations are eliminating points of failure, friction and manual labor in the day-to-day seller workflow by connecting these dots across CRM, sales enablement, sales readiness and digital asset management solutions – which are largely managed in silos in most B2B organizations.” This can dramatically improve the productivity and experience of sales reps. For example, by reconfiguring the solutions that support the day-to-day selling motions of their sales development reps (SDRs), ChowNow, a leading online ordering platform for restaurants, was able to ramp up new sales reps to full productivity faster (in 60% less time), promote them sooner, and retain them longer (rep attrition dropped by 75%) because the seller experience was more automated and less stressful.
• Reconfigure the readiness, training, and development technology portfolio. CXOs need to do this to integrate learning and development tools into a closed-loop process that accelerates onboarding and ramping up of revenue teams, provides managers real-time visibility into seller activity and performance, and the ability to train sellers. For many, connecting these dots will represent a significant step forward as compared with the status quo. Equity Trust Company, a financial services company that enables individual investors, leveraged AI and conversational intelligence to coach at scale. The Sales Enablement team at Equity Trust combined sales readiness, engagement, and conversational AI into a closed-feedback loop that allowed managers to monitor more calls and provide real-time guidance and fixes to reps on calls. This allowed them to double the manager-to-rep ratio from 1:6 to 1:12 and improve conversion and rep satisfaction at the same time. “It would have taken 90 days for our sales team to audit calls on their own. With Conversation AI it took us a day to get the data we needed,” according to Christopher Cases, Senior Manager Sales Enablement at Equity Trust.⁶⁹
• Focus the Revenue Enhancement technology portfolio to improve the lead to cash cycle and capture more revenue, margin, and price. Growth leaders should do this in order to enhance the prospect-to-cash cycle and capture more revenue, margin, and price. You can do this by providing frontline revenue teams with configuration, pricing, and quotation (CPQ), order management, and fulfillment tools. These tools can help support the negotiation and closing phase of the revenue lifecycle. They help sellers optimize the pricing, personalization, and packaging of presentations, proposals, and solutions they present to clients. For example, Peter Ford at iconectiv views the transformation of a sales organization as about making 1% marginal gains in the prospect-to-cash cycle, eliminating little things that hold his sales team back, and eradicating revenue, price, and margin leakage. His Revenue Operations team is making a big cumulative impact by enhancing individual aspects of their core contracting, pricing, quoting, order management, and fulfillment processes – and retooling seemingly simple things like having NDAs signed, which took too long and created friction in the sales cycle. “I don't believe that there is a single thing that contributes to the transformation of a sales organization,” says Ford.¹¹⁷ “There are many important things to focus on as a sales leader. But it's about making those marginal gains in everything, whether that is the way we measure and compensate our people, or even something as simple as the process for agreeing and signing and executing an NDA with a customer – which took far too long in my opinion. All of these things contribute to friction in the sales cycle and points where you can either lose a sale or dissatisfy a customer.”

Commercial Practices That Maximize Return from Customer Data, Technology, Content, and Intellectual Property Assets

Most organizations don't need more technology as much as they need higher returns on their commercial technology and customer data assets. Success in a twenty-first-century Commercial Model requires shared investment in commercial assets that enable revenue teams across the enterprise – including the sales and marketing technology portfolio, customer data, and owned digital selling channel infrastructure.

These commercial assets are among the most valuable but underperforming assets in a business. The strategic management and measurement of these data, technology, content, and IP assets can be used to maximize their utilization, impact, and financial return. Doing this is a critical component of a Revenue Operations model. “Without a business case for the capital expenditure required and operating model that looks at the revenue team and commercial process, it is extremely difficult to execute scalable technologies like one-to-one personalization, real-time coaching, and cross-functional customer journey management. You cannot manage, monetize, and scale these capabilities in a functional or piecemeal manner.” advises Corey Torrence.

Growth leaders need to strategically manage their commercial data, technology, content, and IP assets to maximize utilization, impact, and return on investment. Here are some ways to accomplish this:

• Establish common stewardship of customer data assets. CXOs need to establish a common architecture and owner to strategically manage customer and engagement data assets and maximize their utilization, impact, and ROI. This is also important because it establishes a common fact base for data-driven selling and reporting. “A high priority for me [is] to get the right data infrastructure in place so that we can intelligently scale revenue growth,” says Wade Burgess, the CRO of Rev.com.¹¹⁴ “We're currently sitting on an amount of unstructured data that's not being used in an optimal way. I believe that access into customer insights and to be able to automate action against the opportunity they reveal is going to be a key for us to be able to scale. There is an enormous amount of unstructured customer engagement, behavior, and consumption data coming from our 170,000 customers who use our self-service engine. On top of that we have a whole bunch of people who interact with us on the top of the funnel that never convert.” Wade Burgess consolidated Revenue Operations at Rev.com to establish consistent customer engagement and conversational intelligence data. “One reason Revenue Operations is important is because the revenue team uses the same data, and I didn't want multiple sources of truth,” reports Burgess. “Many of the things we have to do involve being able to look inside of existing, transactional data to direct sales force actions like identifying cross-sell and upsell opportunities and targeting groups of customers who can be aggregated into enterprise accounts.”
• Centralize the management and operational administration of technology assets. CXOs need to establish more centralized stewardship and a reconfiguration of the commercial technology portfolio across functions. By doing so, they can maximize utilization, impact, and return on investment as well as simplify and speed up selling activities. For example, Jeff McKittrick was able to improve seller performance and lower total costs by rationalizing and focusing the technology portfolio at Hitachi Vantara. He achieved these results by getting sales operations, sales enablement, and content operations teams to conduct a top-down assessment of the 20-plus tools in the sales technology portfolio. This identified and eliminated many tools that were redundant, not being used, or not supporting sales. They also started filling gaps in their commercial technology portfolio to support some key sales hot spots like opportunity prioritization and guided selling to salespeople. We profile how Jeff was able to do this in more detail in chapter 7.
• Manage selling content as a strategic asset. CXOs need to establish operational ownership over the organization and deployment of selling content across functions. You can do this by setting up a function to more strategically manage, organize, and deploy these content, knowledge, and “selling intellectual property” assets. These assets are severely underutilized in most organizations. Taking these steps will maximize their utilization, impact, and return on investment. This is important because selling content has emerged as the gasoline of modern selling systems. Today content can represent over a third of marketing budgets (according to HubSpot) and most organizations are increasing their investment in content and the systems that support its delivery. Unfortunately, the utilization of that content by sales remains extremely low, and it is hard to create customized content at scale.

  Meir Adler, Regional VP Sales Engineering at a fast-growing business, WalkMe, reinforces the importance of managing selling content as a strategic asset by using content reuse, templatization, and intelligence as ways to manage the growing cost and complexity of creating content to respond to increasingly demanding customers. “You quickly realize you can't afford to build content to spec,” reports Adler.³⁴ “Reuse and templatization become critical. For us it started in bid management as we focused on simplifying and speeding up our RFP responses. In that process, we learned that 70–75% of the client questions are the same. This opens the door to templatization, libraries and reuse. Now we are looking to extend that capability to a wider range of more complex regional, local, and language scenarios. And find ways to deal with increased regulatory scrutiny.”

As a summary, we have listed all 18 of the actions you can take in a table on the following page (see Figure 3.2).

The Revenue Operations Management System
A Blueprint for Aligning Sales, Marketing, and Customer Success Teams and Optimizing the Performance of Commercial Processes, Operations, and Assets
DIMENSION	DEFINITION	CORE COMPETENCIES
	Establish a leadership model to empower and endorse the transformation of the commercial model to unify sales, marketing, and service into one revenue team and become more accountable, data driven, and customer focused.	1.0 Accountability. Demand full accountability for return on enterprise selling resources, assets, and investments.
		2.0 Ownership. Establish a single point of decision making for the enterprise revenue process, assets, and investments.
		3.0 Change Management. Provide top-down leadership to empower the organization to transform the commercial model.
	Reconfigure the operations that support growth and enable salespeople to provide coherent, end-to-end management of all customer-facing employees, assets, infrastructure, investments, and the customer journey.	4.0 Common Purpose. Establish a common purpose across sales, marketing, and customer success teams.
		5.0 Organization. Establish cross-functional organizational structures to support sales people across the enterprise.
		6.0 Commercial Process. Establish and manage a cross-functional commercial process across the enterprise.
	Redesign the commercial architecture to maximize return on selling assets by improving the speed, visibility, productivity, and engagement of frontline selling teams and reducing cost to sell.	7.0 Go-to-Market Strategy. Redesign the go-to-market architecture to improve performance and engagement.
		8.0 Channel Design. Adjust the sales force design to improve performance, engagements, and costs.
		9.0 Sales Performance Management. Modify assignments, territories, and incentives to align resources and opportunity.
	Turn customer engagement and seller activity data into commercial insights that create value and inform decisions, actions, and conversations at the moments that matter in the salespeople process.	10.0 Data-Driven Selling. Convert revenue data into prescriptive revenue intelligence that informs day-to-day decisions in real time.
		11.0 Key Performance Indicators. Establish fact-based reporting analytics, KPIs, and dashboards of commercial performance.
		12.0 Predictive Selling Insights. Use analytics to create better predictions, parameters, and scenarios to inform investment, allocation, and emphasis.
	Build a common core of commercial capabilities that enable salespeople and maximize the contribution of selling assets and investments to revenue and profit growth outcomes.	13.0 Enablement and Engagement. Reconfigure the commercial technology infrastructure to better support revenue team enablement.
		14.0 Readiness and Development. Reconfigure the commercial technology infrastructure to better support readiness, training, and development.
		15.0 Revenue Enhancement. Deploy technologies to enhance the prospect-to-cash cycle and capture more revenue, margin, and price realization.
	Strategically manage the commercial data, technology, content, and IP assets to maximize utilization, impact, and return on investment.	16.0 Content Assets. Establish operational ownership, organization, and deployment of selling content and IP across functions.
		17.0 Data Assets. Establish a common architecture and owner to monetize customer data assets.
		18.0 Technology Assets. Establish centralized stewardship and reconfiguration of the commercial technology portfolio across functions.

As a reminder, not every one of these 18 actions will be equally important to every business. If you are working in a slow-growth industry, you may want to prioritize actions that can generate higher valuations. This might include focusing their revenue teams around a more precise set of high-opportunity clients, creating a culture of continuous improvement in the commercial process, and eliminating price, margin, and revenue leakage.

If you work in a large, complex enterprise, you should likely focus on breaking down functional silos, leveraging prescriptive commercial insights to become more “agile,” and improving the productivity of your selling teams.

If your organization is undergoing business model transformation, you may want to focus their short-term efforts on redefining incentives to focus revenue teams on customer lifetime value, retention, and annual recurring revenue. You will also benefit from establishing more quantifiable measures of opportunity potential, seller performance, account and pipeline health based on customer engagement and seller activity data.

If you work in a hyper-growth cloud company, you may choose to prioritize leadership by putting in place a single CXO (Chief Revenue Officer) to align commercial teams around the customer. You may also benefit to a greater degree from unifying their commercial operations to leverage customer insights and scalable technologies across the enterprise.

To help you start to build your system for growth, we will provide you some examples of how peer organizations have adopted Revenue Operations (in chapter 4). We also provide you some tools to systematically identify which steps your organization should prioritize to generate the greatest short-term financial impact (in chapter 14).