What is RevOps? What are the core workstreams involved?

Revenue operations (RevOps) comprise the cross-functional workstreams that span the entire customer journey – RevOps aligns Product/Service, Marketing, BDRs, Sales, Professional Services, Customer Success, and Customer Support with Finance.

The 5 essential RevOps workstreams are:

• Strategy/ GTM Strategy – a GTM strategy defines your ICP and customer engagement model.
• Process – playbooks make your methodology efficient and scalable. They can be highly specific (e.g., how a BDR should ask questions on a call) or more strategic (e.g., which revenue methodology the business uses).
• Tooling – the entire tech stack that touches the customer journey should be configured according to your strategy and processes.
• Data – an effective data strategy measures the things that drive decisions, collects data at the right level of detail, and presents information in a way that lets stakeholders understand and act on it.
• Enablement – invest enablement resources in the hotspots of the customer journey to provide education around skills (e.g., how to multithread or have executive conversations), tools (e.g., how to use your tech stack), and competitive positioning (e.g., how to position yourself in the industry).

Why is building an annual plan important for RevOps?

RevOps is reactive in nature, annual planning makes it proactive – most RevOps teams focus on fixing CRM issues or pulling reports as requested. RevOps planning requires the team to actively participate in establishing priorities that align with business goals.

Quarterly planning sessions prioritize which initiatives to pursue across all 5 workstreams and all customer-facing teams – projects are identified and prioritized based on level of impact (LOI) and level of effort (LOE). High-impact, low-effort initiatives are top priorities, low-impact, high-effort initiatives should be avoided, and projects that fall in the middle require discussion.

RevOps plans help customer-facing teams think strategically and better manage executive requests – the new year plan gives leaders a way to say “no” (or “not right now) to CEOs or boards that make frequent ad hoc requests that could jeopardize the broader company strategy. Referencing agreed-upon priorities (that were prioritized for good reason), make those difficult conversations easier to manage.

Preparation

When should you begin to create your annual plan? 

Create your RevOps plan early enough in the previous year that you can impact Q1 pipeline – the exact timing depends on the length of your sales cycle. This plan, often referred to as a GTM, capacity, or budget plan needs to be created with enough runway to impact Q1. For example, if you have a 6-month sales cycle, planning should occur in July.

Who should be involved in developing a new year plan? Who should own the plan and the process?

Team		Role		Responsibilities
RevOps		Planning process owner		Think of RevOps as “Switzerland” – RevOps owns the new year planning process because they can objectively assess needs across the entire customer journey and act without bias in favor of the sales or marketing team.
Finance		Key planning partner		Finance and RevOps build the same plan with different perspectives – these approaches should complement each other and create a shared plan that drives growth while remaining realistic.   Finance owns the budget – budget and capacity planning are tightly integrated, and any hiring or marketing investment must fit into the financial model.
Cross-Functional leaders		Participants		All revenue functions must commit for a new year plan to succeed – marketing, BDRs, sales, and customer success must contribute to make the plan viable, accurate, and enforceable. If any function is left out of the process, the model’s accuracy is at risk.   Department heads help with problem solving – while senior leaders are involved in the planning itself, leaders with a more day-to-day perspective can help come up with ideas to bridge gaps or create new solutions.
Board/ Executives		Approvers and Advisors		The board and Demand Council must eventually reach alignment – bottom-up planning and top-down expectations combine to create a plan that all parties can agree upon.

RevOps should lead ongoing plan management – they should facilitate ongoing Demand Council meetings. Having a neutral facilitator is especially important when you miss target, as they can focus the conversation on solutions rather than finger-pointing.  

What do you need to have prepped or in place before creating your plan?

Establish consistent data definitions and sources of truth – the organization must align on how different stages of the pipeline are defined (e.g., MQLs, SALs, SQLs, etc.) and what constitutes a win, sale, or customer. Without a “Rosetta Stone” of reporting, meetings devolve into debates about whose numbers are correct instead of how to solve important problems. Define your Lifecycle Stages and Stage Advancement Criteria.

Documentation of your GTM strategy for the year – a new year plan is an Excel representation of this strategy. The spreadsheet should reflect:

• Material changes to your strategy (e.g., new product launches, expansion into new geographies or channels, etc.)
• Your understanding of how those changes affect pipeline generation and conversion rates. For example, expansion into a new geography might require scale-up time.  

Collect historical performance data – use trailing 12-month data as a baseline unless there were material changes within that period. Historical conversion rates, sales cycles, ASPs, and seasonal patterns should inform projections.

Identify key initiatives that are required to achieve targets – RevOps needs to know what must happen to make the plan’s underlying assumptions as likely as possible. While some of these initiatives might emerge during the planning process itself, each team should already have important initiatives or projects on their radar. Gather information about as many of these as possible to inform the first draft of your plan and facilitate discussion/ debate.

Note: key initiatives become an accountability tactic once the plan is formed – since the initiatives feed directly into RevOps quarterly planning, Demand Council meetings should monitor progress to assess whether the plan is at risk.

Plan Creation

What is the order of operations to create an annual capacity plan?

Step	Key Activities
Establish data foundations	• Confirm definitions and single sources of truth for pipeline metrics (ie lifecycle stages and stage advancement criteria) • Ensure all stakeholders are using the same data
Build the bottoms-up model	• Use trailing 12-month data (or relevant historical period) • Account for material changes to GTM strategy • Model the entire revenue funnel from marketing through customer success
Review with stakeholders	• Present the bottoms-up analysis to department leaders as a group • Address questions and refine assumptions • Build alignment around the model structure Note: it’s crucial that this step happens with all stakeholders together.
Conduct the reconciliation meeting	Once you’ve created a bottoms-up plan, compare it to board targets and historic performance – never agree to board numbers before conducting a bottoms-up analysis. Reconciling these 2 views of potential future performance typically leads to an “oh, sh*t” meeting where leadership realizes the disparity between what customer-facing teams believe is possible and what the board wants. Work with cross-functional GTM leaders to negotiate realistic stretch targets with the board – 99% of the time, the top-down target is higher than the bottoms-up target. Ask the team whether you can close that delta—and if so, what initiatives and investments must be prioritized. For example, if you need to increase conversion from 25% to 27% to hit a target, what sorts of enablement resources are needed? Note: this step typically requires multiple sessions: • Initial meeting (i.e., the “freak out” session) • Brainstorming session to identify possible solutions • Final alignment meeting to agree on path forward
Codify and distribute the final plan	• Document all assumptions and targets • Distribute to all stakeholders • Ensure that everyone understands their commitments
Establish Demand Council to review and revisit the plan	Revisit the plan through weekly Demand Council meetings – cross-functional leaders should assess performance against targets across the waterfall, by pipeline source, by segment, etc. This cadence allows for timely course corrections by asking questions such as: • Are we on or off track?  • Where are we off track? • Why are we off track? Is it a demand issue (e.g., lead quantity), a conversion rate issue (e.g., lead quality), or an average sales price issue (e.g., AE skill level)? What are we going to do about it?

What are the different outputs of annual planning?

A new year plan is not just a sales plan – RevOps decisions impact the key activities of Marketing, BDRs, Sales, and CS. For example, if revenue must increase by 10%, that target has meaningful implications for all customer-facing teams.

A successful new year planning session also gives you:

• A hiring plan – additional marketers, BDRs, AEs, and/or CSMs might be needed to support a 10% increase.
• Target dates for when key things need to happen – department leaders must know exactly when customers should start to appear in the funnel. For example, you can only be on track to hit the 10% goal if X MQLs and Y SQLs are present in Q1 so they can materialize in Q2.
• A marketing budget – if the majority of that 10% will be driven by new marketing activities, that must be reflected in the way budget is allocated across GTM teams, and whether incremental budget is requested.

How should you account for uncertainty during the planning process? 

Recognize that all demand plans are inherently wrong – the model is a starting point based on well-thought-through assumptions, not a perfect prediction.

Update the plan whenever there is a material change – if any assumptions prove to be significantly off-base after a quarter, follow 2 next steps:

• Update that assumption for the remainder of the year (if needed)
• Determine what else needs to change to compensate for the inaccurate assumption. For example, if conversion is down due to an economic shift, you might need to generate more leads or increase upsell rates.

Course correct during weekly Demand Council meetings – think of these meetings as 50+ opportunities to fix potential problems each year. This course correction opportunity is another reason that Demand Council meetings should never be skipped; for example, if the council met monthly, you would only have 12 chances to resolve issues and nascent problems could balloon in the time between meetings.   

Conduct more formal reviews of the plan on a quarterly basis – examine actual vs. projected performance at the end of each quarter and update assumptions like conversion rates based on actual data.

Shift resources between teams as needed – the goal is to achieve a shared objective, not for a single team to guard its resources at the expense of GTM-org-wide performance. Expect to realign investment with what the org needs most throughout the year.

Related Plans

What are capacity, quota, and territory plans? How are capacity, quota, and territory plans connected? 

All 3 plans waterfall into one another – you can’t create a robust version of one plan without creating the others:

• Capacity plans → determine the maximum resources, staff, or production capabilities an organization can handle within a given timeframe. 
• Quota plans → set specific numerical targets or goals (based upon the capacity plan) that individuals, teams, or regions must achieve, typically for sales, production, or performance metrics. 
• Territory plans → define the geographical areas, customer segments, or market divisions assigned to specific salespeople, teams, or business units for coverage and accountability purposes.

Capacity planning determines headcount needs and pipeline requirements – the model used for capacity planning calculates how many reps are needed to achieve targets depending on quotas, attainment, and ramp time.

What are the steps to building your territory planning? 

Step		Key Activities
Identify/ Validate your ICP		Territories should be based on your ICP – if you don’t yet have an ICP, identify it before finalizing your new year plan. If you already have an ICP, review it each 6-12 months to ensure that your understanding of your customer remains relevant.
Grade accounts based on ICP match		If your ICP is defined by 4 factors (e.g., vertical, company size, geography, and tech stack), grades are: • Grade A – matches all criteria • Grade B – matches all but one criterion • Grade C – missing 2 criteria • Grade D – missing 3 criteria • Grade E – missing all criteria (don’t invest any effort in Grade E accounts)
Import and enrich as much of your Serviceable Obtainable Market (SOM) as possible		• Use data enrichment providers (e.g., Clay, ZoomInfo, Apollo) to gather as much information about Grade A accounts as possible • Import that data into your CRM along with the grade of each account
Choose the appropriate territory model		The ideal model depends on your GTM strategy and position in the market – options include vertical, geographic, or named account models.
Track territory penetration		Create territory penetration reports – these reports should track touchpoints and engagements and help you identify patterns of success and failure. A territory report should help answer the following questions: • How many accounts are in this territory? • How many of those accounts have we touched? • When is the last time each account was touched? • Where are we seeing success? Where are we struggling?
Establish a Campaigns Council		This cross-functional team is responsible for building a centralized, coordinated strategy by: • Creating outbound sequences • Crafting messaging and sequence structure • Intentionally using different media to conduct A/B tests and optimize campaign performance

Note: the goal of territory planning is not to “reward” especially good salespeople with “better” territories – it is worth considering whether someone might have expertise in a region because they live in that time zone or have greater familiarity with the industries there, but you should avoid using a complicated method to assign reps to territories and accounts.

How should you approach building a compensation plan?

​​Simplicity drives better execution – effective compensation planning drives the right behaviors without overcomplicating the incentive structure.

Derive commission levels directly from the capacity model – calculate commission percentages by dividing the quota by variable OTE. All percentages must align with your attainment expectations.

Your comp plan should drive desirous behaviors – clearly define the behaviors you want to encourage and create a plan that rewards reps based on how well they execute those behaviors. For example, if you want to incentivize your team to close more deals, you could:

• Use a cliff or decelerator to encourage reps to close over 30-40%
• Uncap compensation to reward exceptional performance (this is especially effective when a high performing rep blows out their quota)

Only compensate people on what they can control – for example, an SDR might do their job well but be paired with an unskilled sales rep. Instead of compensating the SDR based on close rate and effectively penalizing them for the rep’s poor performance, the SDR’s comp plan should focus on meetings set, meetings attended by prospects, and the quality of those meetings.

Standardize plans by role – don’t create special comp plans for different reps. A consistent comp plan incentivizes better performance without creating confusion or an unfair playing ground. Use role progression (e.g., AE-1, AE-2, etc.) to reward performance and build a farm team.

Run a comp survey once a year – ask the reps themselves if certain components of the comp plan moved the needle for them. Spiffs and other incentives rarely work as well as a leader thinks they will.

How should you approach compensation planning for your Customer Success organization?

CS compensation strategy depends on your CS charter – determine whether your Customer Success organization focuses on support, retention, customer health, or expansion.

Create a comp plan that aligns with the capacity plan – while retention metrics should always be tied to the capacity plan, comp plan structure depends on the charter:

• Support-focused teams lower variable compensation
• Expansion-focused teams higher variable compensation

Use the same stage advancement criteria for CS as for new business – CS shouldn’t only create opportunities that are about to close. Instead, track all potential opportunities from Stage 0 to get accurate conversion metrics.  

Overall

How do you communicate your annual plan across the organization?

Time your communication based on your sales cycle – most companies announce the new year plan at the SKO, but in most cases, the SKO should be the second or third time people hear about it. Communicate as early as possible to impact all stages of the sales cycle. It is disingenuous to delay sharing the new year plan if you plan to hold teams accountable to it.

Secure individual leader buy-in before broad communication – conduct a roadshow early in the process where the leader of each department agrees to their targets.

Create accessible dashboards – visual dashboards should show progress against the plan and be available to all stakeholders so everyone knows how the team is performing.

Establish regular review mechanisms – use weekly Demand Council meetings to maintain focus, create a cadence of communication about plan progress, and celebrate successes and address challenges with equal transparency.

What are the most important things to get right?

Make sure everyone is speaking the same language from a data standpoint – if you have inconsistent definitions for pipeline stages and/or each department uses a different data source, you have no way to hold teams accountable for hitting or missing their targets.

Always prioritize the bottoms-up exercise before agreeing to top-down numbers – accepting board targets before you understand what’s realistically achievable sets the team up to fail—and puts the company in a difficult position when the board realizes that expectations cannot be met.

Continue to use the plan throughout the year – regularly review performance against the plan and update assumptions as needed to keep the team on track. A plan should not become increasingly inaccurate as the year progresses. 

What are common pitfalls?

Starting too late – many companies think that new year planning should occur at the end of the year. If you don’t account for sales cycle length, you’re effectively generating a plan that can only impact part of the year since pipeline generation should already be underway.

Forcing unachievable top-down numbers – the board’s job is to push companies to perform better, but there is a difference between encouraging growth and securing impossible promises. Deciding on a new year plan that is entirely infeasible helps no one.

Taking a sales-only approach – marketing, BDRs, and CS play a crucial role in the GTM strategy. Interdependencies determine whether the team as a whole can hit its targets.Not leaving room to adjust – expect key assumptions to change and build in processes that allow you to adapt accordingly. Similarly, reserve some capacity for emerging/shifting priorities so you can adjust to changing conditions.