If you’ve been in the digital and development agency world for a while, you’ve likely experienced the struggles associated with growing – or even just sustaining – revenue. It often feels like you’re on a rollercoaster ride, where the business either has too much work and not enough people – or not enough work and too many people. This very easily happens when leaders lack reliable data and foresight into where the business is heading. You’re not alone in this struggle—we’re here to help you get off that ride. 

Taking control over your revenue operations (or RevOps) with a few best practices is a sure way to start improving overall operational confidence because, when it’s done right, you gain the forward-looking insights you need to make smart decisions for the good of your people and your business. 

We know RevOps can feel complicated, so we’re covering the ins and outs of it to help get you started…let’s dive in. 🤗

Implementing Straightforward Revenue Operations

Successful revenue operations require alignment across all major business functions in order to not just sustain revenue but drive it forward. While there are various ways to go about revenue operations, we’ve seen our clients gain control of performance and their ability to generate revenue by leveraging a few (relatively) straightforward steps. 

First, plan to hit and adjust your revenue goals. This may feel obvious, but far too many organizations aren’t actually planning their revenue. Here are a few recommendations we have when building out your plan:

• First, know there’s a difference between sales bookings and revenue: sales bookings refer to the value of orders or contracts that a company receives from customers, whereas revenue is the actual amount of money that a company earns from those orders or contracts after they are fulfilled, and payment is received. In other words, sales bookings represent potential revenue, while revenue represents actual earnings. We recommend estimating revenue (monthly and quarterly) for both existing work AND potential new business.
• Coordinate across business functions to understand the intricacies of your funnel. What actually goes into winning new business? What needs to happen to retain customers or grow accounts? Everyone should be on the same page about the answers to these questions, as winning a new project or account doesn’t come without a cost (literally). It takes time and resources to develop outbound sales and marketing materials to catch the eye of prospects; it takes time and resources to conduct industry and competitive research and develop a stand-out proposal; it may even require travel to the prospect’s city in order to seal the deal. Account for everything that goes into securing and growing revenue. 
• Update actuals in your forecast and revenue plans every month. You can’t set it and forget it—treat it as a living, breathing plan that needs attention and care. This view signals when you need to course correct to hit your targets.

Second, review your pipeline every week. Yes, we said every week. 👏 Here’s how to go about it and what to look for:

• Review, shape, and prioritize new business opportunities. Do new deal opportunities allow you to hit your revenue targets? It’s imperative for Leadership, Sales, and Delivery teams to be on the same page for which opportunities are best for the business, which can be supported with existing resources, and which will require new or more resources.
• Use your weekly meeting to update account- and project-level revenue forecasts. Update close dates, start dates, and any mismatched deal values between the CRM and your strategic resourcing planning and forecasting tool (i.e., Parallax). Is everything running on time and within budget? Are any projects going off the rails, and if so, how does that impact revenue in the near- and long-term?
  
  This step is key to avoiding things like revenue leakage – or, the loss of potential revenue that a company could have earned but did not. This usually happens due to errors or inefficiencies in the company’s processes (think: underbilling, over-discounting, uncollected fees, incorrect pricing) OR through intentional actions such as fraud or non-compliance with contracts or regulations. In either case, revenue leakage results in reduced profitability for the company and should be avoided at all costs.
• Forecast renewal expansion revenue at least once a month. What’s the health status of existing projects and accounts? What’s in danger, and where is there room for growth? Don’t forget to take time every month to identify and assess key factors that may impact renewal and expansion rates, such as customer satisfaction, market conditions, and the competitive landscape.

Barriers to Revenue Operations

So, what’s standing in the way of confidence when it comes to revenue operations? Historically, agencies have built processes around the project lifecycle—everything has a beginning and an end; projects weren’t necessarily treated as something that could grow, expand, and become more valuable over time. But that’s all a thing of the past. 

Digital agencies and development firms are different today. In most cases, leaders aren’t seeking out one-and-done projects and accounts. More than ever, leaders are looking for a balanced portfolio that includes clients and work that can grow and expand as their organization’s services and skills do. It’s a “let’s grow old together” mentality that creates strong relationships, fosters new opportunities, and lets both parties succeed and scale. 

But to get there – to grow not only in services and skills but also in revenue – agencies need predictive and proactive tools that enable strategic, forward-looking decision-making. Only then can they start to overcome the various challenges today that tend to put a dent in operations (and revenue) and stress out leaders. 
What are the challenges associated with planning and forecasting revenue, exactly? It all comes back to having limited operational visibility. Without the right tools, we regularly see organizations struggle with:

• Having a lack of data (or the right type of data) to track long-term revenue trends, make informed forecasts, or even understand the shifting landscape for customers, competitors, and markets
• Inconsistent processes for revenue tracking and resource planning and forecasting – this tends to worsen when key stakeholders have difficulty aligning on business strategy
• Outdated technology that creates limited ability to track and measure the effectiveness of forecasting methods and approaches

The biggest challenge, however, is trying to be too precise. Precision inevitably becomes a barrier to doing anything consistently because, well…it’s just too difficult and time consuming to try and estimate everything that will happen 10 weeks from now (even five weeks from now) down to the exact dollar or minute. So, we’re begging you: don’t let precision get in the way of the work. 🙏 Know that adjustments will need to be made as you go—it’s all part of the process.

Benefits of Confident Revenue Operations

If you’re new to measuring the various factors related to revenue operations, we strongly advise keeping it simple to start. We outline various operational best practices for you here when you’re ready, but let’s focus on the sales pipeline and dive a little deeper into the importance of reviewing it every week. 

First, know that it’s quite common for leaders to overreact to the situation at hand. If they’re too busy with existing work, they might stop focusing on securing new work. If there’s not enough in the pipeline, they might stop putting effort into resource planning. It’s a constant back-and-forth that catches everyone off guard.

But we know this to be true: reviewing the sales pipeline regularly helps to confirm what work you think will happen and when, providing the business with an up-to-date view that can  inform more accurate revenue and capacity forecasting. Then, after conducting a variance analysis (i.e., what was planned vs. what actually happened), leaders gain a better understanding of agency performance, so they can proactively take action if needed—and teams can respond accordingly when there’s a predicted shortfall in incoming work as well. 

Altogether, by responding to dips in the sales pipeline, rather than dips in workload, leaders are better poised to stabilize, even grow, revenue. 

Other benefits agencies experience when they start to prioritize RevOps best practices:

• Collaborative workflow: Leveraging a strategic resourcing planning and forecasting tool like Parallax helps create a collaborative workflow between business-critical applications to ensure reliable, real-time financial data is available for your RevOps conversations. Plus, Parallax has a team of experts ready to guide you in establishing the operational cadence that works best for your business, ensuring you have a hold on RevOps and don’t experience any surprises. 
• Shared perspective: The right tool will also provide a shared, future-looking perspective across your agency so that you don’t experience the pitfalls of misaligned perspectives such as a dip in revenue – not to mention internal frustration, stress, and tension. Instead, you always have a pulse on what lies ahead and where and when you need to course correct to ensure you can hit your revenue targets.
• Confident decision-making: RevOps can be stressful for leaders when they don’t have the right insights to guide their decision-making process—but when you review and assess your forecasts and pipeline every week in just a few steps, uncertainty will be replaced with confidence. Leaders will know when to amp up new business efforts, for example, and when to hire and who to hire.

Ready to Revamp Your Revenue Operations?

RevOps best practices are all about combating the peaks and valleys tied to revenue that impact confidence and increase stress for leaders, who are attempting to sustain and grow their businesses. 

Start by implementing a straightforward revenue operations and planning process – execute it weekly – and you’ll start to see those fears, uncertainties, and doubts dissipate. 
Questions about revenue operations or other operational best practices? These are some of our favorite topics to discuss! We’re ready to connect when you are.