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Revenue Operations

ROM: Revenue Operating Model

1. The Business Model

6. The Operating Model

GTM Offsite: Assets

The Operating Model for Recurring Revenue (ROM) emphasises a unified approach across Marketing, Sales, and Customer Success functions to drive sustainable growth in businesses with recurring revenue models. It leverages scientific frameworks and data-informed models to ensure that all aspects of the business are aligned to optimise revenue and enhance customer experience. Key points include the necessity of delivering recurring impact to customers and the critical role of Customer Success in realising the majority of customer lifetime value post-initial sale. The model uses a variety of scientific frameworks, such as business, data, mathematical, go-to-market, growth, and operating models, to integrate and harmonise business functions towards these goals.

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The introduction of open standards, as described herein, offers a universal application to any business with a recurring revenue model, aiming to foster sustainable growth through the application of scientific frameworks and data-informed models. These frameworks serve as crucial formulas, guiding Revenue teams to transition from operating in isolated silos within Marketing, Sales, and Customer Success functions, to forming a cohesive Revenue team. This transformation is facilitated by adopting a unified operating model, employing consistent frameworks, and speaking a common language across all functions.

One of the distinguishing characteristics of modern recurring revenue business models lies in their growth patterns, which markedly differ from those of traditional business models. Specifically, the conventional 'sales funnel' framework falls short in addressing the unique needs and dynamics of recurring revenue businesses, necessitating a more tailored approach.

For businesses to successfully secure recurring revenue, it is imperative to consistently deliver recurring impact to their customers. Achieving this necessitates a shared operating system across Sales, Marketing, and Customer Success departments. This integration is essential for driving sustainable growth and ensuring a seamless customer experience.

A significant insight often overlooked by many leadership teams is that the lion's share of customer lifetime value accrues after the initial sale. This underscores the critical importance of Customer Success (CS) motions in the recurring revenue model, which are pivotal for successfully onboarding customers, securing renewals, and fostering growth within the existing customer base.

Enhancing revenue optimisation and productivity hinges on the strategic alignment of all Go-to-Market (GTM) teams. This alignment encompasses a common methodology, framework, metrics, and language. Such cohesion is fundamental in delivering an optimal customer experience, which in turn, drives revenue growth and customer loyalty.

The governance of recurring revenue relies on the application of various scientific models, each playing a vital role in understanding and optimising the recurring revenue business model. These models serve as the foundation upon which sustainable growth strategies are built and executed.

Model 1 delves into the Business Model aspect, laying the groundwork for how recurring revenue streams are structured and managed. It provides a blueprint for creating a scalable and sustainable business model that leverages recurring revenue.

Model 2, the Data Model, focuses on the strategic use of data to inform decision-making processes. It emphasises the importance of collecting, analysing, and leveraging data to drive business strategies and customer engagement.

Model 3, the Mathematical Model, introduces quantitative methods to measure and predict the performance of recurring revenue streams. This model is essential for forecasting growth and making informed financial decisions.

Model 4, the Go-To-Market Model, outlines the strategies employed to effectively reach and engage the target market. It encompasses sales, marketing, and customer success strategies that are aligned and synchronised to achieve optimal market penetration and revenue growth.

Model 5, the Growth Model, is dedicated to identifying and exploiting opportunities for expansion within the recurring revenue framework. It focuses on strategies for acquiring new customers, increasing the value of existing customers, and entering new markets.

Model 6, the Operating Model, serves as the culmination of the previous models, offering a comprehensive framework for executing the strategies and processes that underpin the recurring revenue business model. It ensures that all aspects of the business are aligned and functioning cohesively towards sustainable growth.

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1. The Business Model⁠

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2. The Data Model⁠

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3. The Math Model⁠

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4. The GTM Model⁠

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5. The Growth Model⁠

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6. The Operating Model⁠

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