The Lean Six Sigma Playbook for Revenue Operations (RevOps)
In the world of Revenue Operations (RevOps), achieving peak efficiency and revenue growth is not easy. Many factors must align well to ensure that all related operations run smoothly to capture revenues at a desirable cost.
In this article, let’s quickly go through the definition of RevOps, its components, and its purpose for business operations. Then, we will go through the Lean Six Sigma framework. Finally, I will share examples of Lean Six Sigma applied to Revenue Operations components: for marketing, for sales, and for customer success.
Firstly, what is RevOps?
Revenue Operations (RevOps) is a strategic framework that unifies and aligns a business’s revenue-generating functions such as marketing, sales, customer success, and finance under a single operational model.
What is important about RevOps is that it utilizes technology to achieve its goals. Technology that helps generate leads, build brand awareness, and nurture prospects for marketing. The same technology that helps sales teams convert and close deals. The same technology that enables customer satisfaction and retention. And the same technology that allows tracking of revenues, costs, profitability, and budget compliance. One technology that unites them all.
Data & Process in RevOps
Two very critical components of the RevOps framework are data and process. For it to be effective, data management must be unified to facilitate teams rather than hinder them. A business that can maintain good data collection practices to ensure its integrity and useful analysis to create dashboards will create a real advantage.
Another component is process. As long as we think of marketing, sales, customer support, or finance, we talk about activities. What makes many of them similar is that most companies have the same or similar business functions.
What makes some businesses stand out is how they organize the processes around those business functions better than anyone else.
From the simple process of how companies attract and score leads to standardized sales workflows, sales stages, or touchpoints for customer experience — all of this works in favor or against building the strategic framework.
As we join data with process, this is often done through CRMs such as Salesforce, HubSpot, SAP, and others. Such systems enable hosting the entire business process in a digital super environment.
Having a RevOps framework makes it straightforward to see the sales pipeline velocity, customer acquisition cost, customer lifetime value, and churn rate. The big advantage is that RevOps enables the visibility of desired metrics, allowing for real-time tracking to determine if it is more or less expensive to acquire clients.
And by how much.
The RevOps framework enables the capturing of information and presenting it in real-time to have departments a reality check and focus on the next growth objectives or impediment reduction.
Lean Six Sigma: DMAIC framework
To achieve all the listed benefits for companies with Revenue Operations, Lean Six Sigma provides the toolkit that allows for eliminating waste within an operational model.
This impediment-reducing framework decreases variability in outcomes, ensuring that the aftermath is consistently excellent.
When businesses strive for increased efficiency, centralized data insights, or improved collaboration, all of these are solid goals. However, they will not be achieved by merely thinking without taking action. This is why the implementation of Lean Six Sigma to improve the revenue cycle can provide the benefits that many businesses desire — standardized excellence.
Feel free to explore previous displays of Lean Six Sigma dealing with COGS and operating expenses to increase financial efficiency within businesses.
Building on these articles, we just apply the DMAIC method to RevOps components. Lean Six Sigma is known for defining, measuring, analyzing, improving, and controlling.
- Define: Set project goals and understand customer needs for the improvement direction.
- Measure: Gather data to create a baseline and evaluate current performance.
- Analyze: Analyze data to find root causes.
- Improve: Create and apply solutions to fix root causes.
- Control: Maintain improvements by setting up controls to ensure consistency.
As we have all this setup, we will tackle marketing, sales, and customer support cases — 6 in total for pattern discovery for Lean Six Sigma applications in RevOps.
This means that the tool remains constant for changing situations.
Marketing
The marketing department serves as the driving force behind a business’s growth and customer engagement. Its primary purpose is to build brand awareness and attract customers. Marketing bridges the gap between the company’s offerings and customer expectations. Below are two cases of how the Lean Six Sigma framework improves marketing operations.
Case #1: Reducing Ad Spend Waste in PPC Campaigns
Problem:
High ad spend on Pay-Per-Click (PPC) campaigns led to low ROI due to clicks from unqualified audiences, wasting a significant portion of the budget.Lean Six Sigma Method Applied:
We use Negative Keyword Lists and Audience Refinement to reduce waste in ad spend.Define: The goal was to reduce wasted ad spend in PPC campaigns by 50%.
Measure: Data on ad spend, click-through rates, and conversion rates were collected.
Analyze: Analysis showed that irrelevant clicks from broad keywords were consuming the budget. Process mapping identified that using negative keywords and refining audiences could minimize wasted clicks.
Improve: Negative keyword lists were developed to filter out irrelevant searches, and audience targeting was refined to exclude users unlikely to convert.
Control: PPC campaign performance and ad spend efficiency were reviewed monthly.
Result:
Wasted ad spend decreased by 50%, improving PPC ROI.
Case #2: Reducing Lead Drop-Offs During Registration for Online Events
Problem:
Many leads began registering for online events but abandoned the form.Lean Six Sigma Method Applied:
We use Form Simplification and Progress Indicators to reduce drop-off rates.Define: The goal was to decrease lead drop-off rates during registration by 50%.
Measure: Data on form abandonment rates, completion rates, and lead conversions from events were collected.
Analyze: Analysis showed that long forms discouraged users from completing registration. Process mapping revealed that simplifying the form and adding progress indicators would increase completion rates.
Improve: Unnecessary fields were removed, and a progress indicator was added to show users how close they were to finishing registration.
Control: Registration completion rates and lead conversions were monitored after each event.
Result:
Registration drop-off rates decreased by 50%, leading to more sign-ups for online events.
Sales
The sales department converts business opportunities into revenue by directly engaging with customers and closing deals. Its primary purpose is to establish and nurture relationships to provide tailored solutions. Below are two cases of how the Lean Six Sigma framework improves sales operations.
Case #1: Reducing Sales Cycle Time
Problem:
The sales cycle for complex deals was prolonged due to multiple approval layers and a lack of standardization in proposals.Lean Six Sigma Method Applied:
We use Proposal Standardization and Approval Workflow Automation to streamline the sales cycle.Define: The goal was to reduce the sales cycle time for complex deals by 30%.
Measure: Data on sales cycle lengths, approval times, and lost deals were collected.
Analyze: Analysis showed that the lack of standardized proposals and manual approvals slowed the process.
Improve: Standard templates were created for complex proposals, and an automated approval workflow was implemented to speed up internal reviews.
Control: Sales cycle times were monitored monthly to ensure sustained improvement.
Result:
The sales cycle time for complex deals was reduced by 30%.
Case #2: Improving Product Knowledge Across the Sales Team
Problem:
Lack of product knowledge across the sales team reduced their confidence in handling objections.Lean Six Sigma Method Applied:
We use Product Knowledge Training Programs and Knowledge Assessments to improve reps’ product expertise.Define: The goal was to improve product knowledge scores by 30%.
Measure: Data on training completion rates, knowledge assessment scores, and objection handling success was collected.
Analyze: Analysis showed that reps often struggled to answer detailed product questions.
Improve: A structured product training program was created, with regular assessments to ensure understanding.
Control: Quarterly assessments and feedback sessions maintained high knowledge levels.
Result:
Product knowledge scores improved by 30%, enabling reps to handle objections effectively and close more deals.
Customer Support
The customer service department ensures customer satisfaction and acts as the frontline for addressing needs and concerns. Its primary purpose is to provide prompt and effective assistance, resolve issues, and ensure that customers feel valued and supported. Below are two cases of how the Lean Six Sigma framework improves customer support operations.
Case #1: Improving Agent Engagement and Reducing Turnover in Customer Support
Problem:
A high turnover rate in the customer support team led to increased recruitment and training costs. Low engagement and high stress levels were major contributing factors.Lean Six Sigma Method Applied:
We use Voice of the Employee (VoE) and Workload Balancing to improve agent engagement and retention.Define: The goal was to reduce turnover by 40% and improve employee satisfaction.
Measure: Data on turnover rates, workload, and employee feedback were collected.
Analyze: VoE analysis identified high workloads and limited role variation as key issues impacting engagement.
Improve: Workload balancing was implemented to ensure a fair distribution of tasks. A mentorship program was introduced to provide development opportunities, and monthly one-on-one check-ins were established.
Control: Turnover rates and employee satisfaction scores were monitored quarterly.
Result:
Turnover decreased by 40%, and employee satisfaction improved significantly. Agents reported feeling more supported.
Case #2: Reducing Ticket Resolution Variance Across Different Teams
Problem:
Resolution times varied widely across teams, leading to inconsistencies in customer experience. Customers were frustrated with the unpredictability of response times depending on the team handling their issue.Lean Six Sigma Method Applied:
We use Process Standardization and Best Practice Sharing to harmonize resolution times across teams.Define: The goal was to reduce resolution time variance by 60% and create a more consistent customer experience.
Measure: Data on resolution times, team performance, and customer feedback were collected.
Analyze: Process mapping revealed that each team used different workflows, leading to inconsistencies.
Improve: A standardized resolution process was developed and shared with all teams. Best practices from the top-performing team were implemented across the department.
Control: Resolution times across teams were monitored monthly to ensure consistency.
Result:
Resolution time variance decreased by 60%, leading to a more predictable experience for customers.
In the end, the RevOps framework enables marketing, sales, and customer support departments to work hand in hand to ensure the highest alignment in serving customers to attain revenues most effectively.
The examples above are good illustrations of Lean Six Sigma in action, and the multitude of cases are meant to establish a pattern of consistency in its application within businesses. Any business can benefit from using Lean Six Sigma in any capacity, fully or partially, to generate revenues and build continuity within revenue-generating departments.
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