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How to Build a Revenue Operations Stack

February 3, 2023

While much has been written about “the revenue stack” or “revenue operations stack”, they tend to focus on sales and marketing tech that serve to generate more leads or demos. While these are important for any B2B company, the focus ignores the processes and infrastructure that enables high velocity revenue recognition and growth. How can high growth companies build a revenue operations stack across the whole business?

To better understand this problem we surveyed dozens of high growth and at-scale enterprise software companies to understand how they’ve addressed and/or solved these scale bottlenecks by building out best-of-breed “revenue infrastructure.” There is a very key difference in terms here to note – infrastructure is necessary, and the categories and platforms identified below, we believe, are table stakes as you attempt to scale your business. Whereas many revenue stack tools are great pieces of software that can improve operations and help generate incremental revenue, these tools should not be confused with the below platforms, which we believe are key pieces of your revenue infrastructure stack, not to be ignored at any stage in your journey.

There are four key workflows and or categories we found that are necessary to think about when building out your revenue infrastructure stack. Each of these platforms can immensely improve your business on their own, but when combined we believe it creates competitive barriers that will enable you to outmaneuver your competition in short order:

Revenue Qualification – The process by which you define, and agree with prospects on their ability and level to which they’ll commit to your product or service ie. quote to cash. 

Revenue Acceleration – The management, and increase in speed at which you implement your product or services with the customer. As you can’t get paid till your customer is actually using your product or service.

Revenue Acceptance – How you actually take money from your customers for the use of your product or services
Revenue Leverage – How you can use your revenue to further grow your resources to compound your growth.

Revenue Qualification:  Revops

The first few customers you won likely all had something to say about your sales agreement. They likely wanted a discount, some needed a few extra clauses around data handling, and a few might even have asked about liability coverage. All totally fair, and you need to do right by your customers. As you scale your sales process though you need to ensure you are getting the right sales agreements to the right prospects at the right time. Having documents in various folders, multiple DocX files, and spreadsheets all contribute to incorrect, or unapproved deals being sent out by sales reps. Revenue leaders universally told us of the need to impose guardrails to enable sales reps to be flexible in their pricing approaches while avoiding incorrect terms and pricing being sent to prospects. 

RevOps provides the building blocks to making better sales agreements, minimizing copy and paste for sales documents and enabling increased sales velocity. 

The RevOps quoting product enables:

Flexibility: Customize your template for the process that makes sense for your company.

Lightning Fast: Generate professional sales agreements for your team in minutes.

Guard Rails: Set your reps up for success while providing the necessary guardrails for structuring deals.

Revenue Acceleration:  Baton

The customer just signed the contract, now you need to get them live to recognize that revenue, it’s go time! If you’re still passing the customer off to your services/success or partner teams by emailing a static spreadsheet, Smartsheet or some general project management tool you are leaving a ton of additional revenue and margin on the table.

Right after your company has achieved initial traction, how you manage implementation and services should be a major focus. Implementations that run longer than expected or over budget result in customers churning 70% of the time as they aren’t able to quickly realize your products value. Worse, every day the customer is not live, is costing you money, as you cannot begin to bill them in a SaaS.

To accelerate revenue recognition you need a platform purpose built to manage, automate, and provide visibility into your implementation or services process. Companies that adopt Baton, or similar platforms see several key benefits (Baton specific stats);

  • A 50% reduction in their implementation time for customers, achieved by creating a standardized process where they can collaborate with clients in real time.  
  • Efficiency gains, where typical services/success team members can handle 5x the number of projects per week than before 
  • Margin improvements as less services people are needed to keep up with growth
  • Increases in customer retention and satisfaction as they get to experience your products value 50% faster than before
  • The ability to charge more for their services as Baton enables a premium onboarding experience that gives customers certainty and visibility into the process, which they’re willing to pay more for.

Revenue Acceptance:  Paddle

You’ve won the deal. The customer is going live. It’s time to take their money. How exactly are you going to do that? Successful software companies operate across borders and sell multiple products to very different market segments. When it comes to how money is delivered from your customers to you, things can get complicated fast as your company and offering grows. That will end up costing you revenue if you don’t have the right infrastructure in place.

Your revenue delivery infrastructure determines if and how you:

  • Create and issue invoices to customers around the world who are on different plans, with different billing intervals – and whether that’s automated or manual
  • Allow customers to pay in a currency and over a banking network that feels familiar
  • Remain compliant with tax regulations when selling high-value contracts and products globally
  • Automate complex revenue reconciliation requirements when bundling products and services in contracts
  • Reconcile hundreds of payments across bank accounts to ensure management accounts are turned around in record time
  • Deliver invoice reminders and assistance around accounts receivable, so you’re paid on time
  • Automate management reporting to get real-time view into cash flows and business performance

A lot of companies build this infrastructure piece by piece as they grow, connecting up different tools and expanding their finance team headcount. This makes their setup and processes difficult to maintain, clunky from a customer experience perspective and more costly than it needs to be.

Paddle is the only revenue delivery platform built specifically for the SaaS industry and is the only integration SaaS businesses need to power their revenue delivery infrastructure. This leaves you with lower costs, fewer tax and financial admin headaches, faster turnaround times when you want to make changes, and ultimately more revenue. 

Revenue Leverage:   Pipe

So you have built a product, figured out how to get prospects interested in the category, and even have a near repeatable process nailed down to sell it to customers – in other words you have achieved product market fit and are at initial scale. Now you want to grow faster. That process will require more capital. You could raise money from investors and sell a portion of your company to-do so, or like many large companies you could attempt to access the debt markets and use a non-dilutive source of funding. The problem is most recurring revenue businesses don’t want to take on restrictive debt capital, so they’re reliant on equity capital to cash flow their business.

Pipe provides direct access to the capital markets through simply connecting your billing manager, your accounting software and bank accounts to issue a trading limit. They work to get you the best price possible, bids improve over time as you build trading history on the Pipe platform and grow as a business.

Pipe means more cash flow for scaling businesses without debt or dilution. By treating recurring revenue streams as an asset, Pipe allows companies to transform their recurring revenue into upfront capital, instantly.

🚀 We’re thrilled to announce that Baton has joined forces with ClientSuccess!