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October 31, 2022

The Big Unlock for B2B Sales: Modernizing Revenue Operations

By Jennifer Stanley, Partner and North America Lead, Sales & Channel Practice, McKinsey & Company
A person sitting in front of a laptop, looking at revenue analytics, with a mason jar of coffee.

B2B organizations face dual challenges: rapidly changing market dynamics and the lingering supply chain disruptions of the past two years. Now more than ever, it is imperative for organizations to become more efficient while achieving their business growth objectives. It’s a tall order, and some of those making it work have rethought how to best support all commercial teams – not just sales – in a unified manner known as “revenue operations.”

This move calls for an integrated, frictionless way of working (in the next normal). Organizations that successfully embrace revenue operations do so by presenting a single face to customers, with everyone on the same page providing seamless interactions. And even if a customer sees more than one face, every interaction feels consistent, natural, and non-repetitive.

Achieving this degree of integration requires a blending of analytics, insights, reporting, and resources across all relevant areas of revenue operations: sales, marketing, customer service/success, customer experience, and channel/partner management (where relevant).

But most organizations struggle to drive cross-functional collaboration in a way that aligns teams, systems, and processes to drive growth and improve sales ROI. This is where moving beyond the classic construct of sales operations to revenue operations can help, both practically (in terms of more efficient operations) and financially (in terms of increased revenue productivity).

In our research at McKinsey, we found that companies taking advantage of fully integrated revenue operations achieved organic growth rates at least 5% greater than their peers, more often than those who relied on traditional sales operations (see chart below).

Building an integrated revenue operations function typically involves merging four areas of the organization: sales strategy and planning; commercial process engineering (i.e., roles and responsibilities, handoffs across customer-facing sales, marketing, insights and analytics, sales operations); performance management (e.g., sales compensation, coaching, KPIs); and quote-to-cash operations (e.g., bid/deal desk and pricing support). However, reaching this level of integration across the four areas of revenue operations is often easier said than done.

Fortunately, there are smaller actionable steps companies can take to mimic best practices and begin the journey to standing up a revenue operations function. Here are three concrete steps organizations can take now: 

1. Put customers first

  • Create compelling value propositions geared toward how buyers buy, not how sellers sell.
  • Plan your sales actions in a way that delivers a compelling experience and reinforces brand affinity and loyalty across your customers’ typical journeys, both to delight them and to maximize lifetime value for your company. This is the single most powerful application of revenue operations – one that forces organizational alignment across functions most critical to achieving a customer-centric experience.

2. Go micro

  • Develop a granular view of your market and future sales opportunities by analyzing customer data at the smallest cell possible (e.g., individual location, sub-ZIP code level).
  • Generate rep-level insights and opportunities from integrated commercial data, such as combining the likelihood of customer churn (customer experience data) with personalized messages and pricing that might keep them from doing so (marketing and sales data).

3. Work agile

  • Align commercial resources to customer opportunities (e.g., marketing campaigns, sales resources, and post-sales functions matched to customers most likely to buy and remain loyal).
  • Pivot the commercial organization toward new, high-value opportunities and business models as customer preferences and technologies evolve (e.g., reset sales territories quarterly vs. annually).
  • Optimize compensation, incentives, and performance management to achieve desired commercial outcomes.

Transforming traditional sales operations into modern revenue operations will reap rich rewards for those organizations willing to invest the time and energy, and there are easy, focused ways to get started.

Headshot of Jennifer Stanley

Jennifer Stanley is Partner and North America Lead of Sales & Channel Practice at McKinsey & Company.