What $40M Companies Get Completely Wrong About RevOps

I think more often than not, it's viewed as a cost burden as opposed to a revenue add. Forty-plus million-dollar companies that we work with don't have a dedicated RevOps person, but a part-time RevOps person. A CEO, a founder, a CRO is going to say, "I'd rather just add an AE or an SDR." They associate that role with revenue generating. You can either increase force, meaning you add more people, or you can reduce friction. And that is really the value from a RevOps perspective.

Welcome back to another episode of the Bridge the Gap podcast powered by Revenue Reimagined. Today's guest is Brendan Tolson, CEO and co-founder of RevPartners and one of the strongest voices currently pushing companies to rethink how they build their revenue engine. He and his team act as an in-house RevOps function for scaling companies, helping align sales, marketing, and customer success before things break. This episode is going to be about why most companies wait too long to invest in RevOps, something we are super passionate about, what actually breaks when you do wait too long, and how to build a GTM system that scales without chaos.

Brendan, welcome to the show, man. That was quite the intro. I appreciate it.

You're right. That's the only reason I'm here. I mean, you crushed it, so it's hard to live up to that intro, but it's great to be here, guys. This is a fun topic and I'm excited to see where we go.

Yeah, so that is only reason why we keep him here. Yeah, you got to give him a little bit of props. So, what you do is very interesting because we have this challenge in a lot of our clients we go into. Even at twenty, forty million dollars, there's no RevOps. But when you start getting into RevOps, one of the things you say a lot is most companies don't scale systems, they scale chaos. So what do you mean by when they don't scale systems but they're scaling chaos?

Well, I think you loaded a lot there. I mean, I think a lot of people try to apply force to growth and that's natural, right? It's like, "Hey, we want to grow. Therefore, we need to add people to it and we need to do more activity." While that certainly can be true, there's also second-order effects as a result of that. The proliferation of data, the proliferation of activity—it just gets very messy. You see a lot of problems very fast when that happens. Because when you force things in and you don't have a clean system, that word chaos in that example is really where we start to see it.

And so making sure, especially in this day of AI and the need for trust and brand, becomes really important. If you just continue to add gas to something that's not set up properly, it's going to have the adverse effect of what you want. Instead of attracting people, you're actually going to repel people.

Good. I was just going to say it's really interesting because even with AI and a lot of these other things that are happening, people don't stop to actually look at how to build a system, or they understand it conceptually how to build a system, but they just throw technology, more AI, more things at it. So I love the idea that if you don't build those systems, you're just going to be scaling crap, and that's not a good way to scale.

Well, yeah, there's just no easy button, right? Everyone wants the easy button. All these tools are promising to solve your problems. I mean, it's like losing weight. I guess there are magic pills now, but historically, you have to do the hard work. And the same applies from a system perspective. You need to have a foundation set up properly to then put the gas on it. And oftentimes people just don't want to do that because, well, there's a lot of reasons, I'm sure we'll unpack that, but yeah, the foundation has to be built before you can really start to orchestrate the desired demand activity that you're looking for.

Why do people wait so long? Because there's so much hidden cost of not investing in RevOps early, in my opinion. And Dale wasn't joking. We tell people it should be one of, if not the first, go-to-market hires you make. Yet forty-plus million-dollar companies that we work with don't have a dedicated, even a part-time RevOps person.

Well, I think there's probably a lot of reasons, but I think more often than not it's viewed as a cost burden as opposed to a revenue add. And when you have a finite budget, people are—a CEO, a founder, a CRO is going to say, "I'd rather just add an AE or an SDR," who they know is going to—at least in their minds, they associate that role with revenue generating. And for a RevOps person, it just feels like I'm just adding cost onto my team. And that's generally what we see.

But yeah, to your point, what they don't see is actually the value. We talk about force and friction, right? So you can either increase force, meaning you add more people, or you can reduce the friction. And that is really the value from a RevOps perspective. If you get the right person, the efficiency and productivity gains are demonstrable, and you see the ROI from that. But that's the common reason that we see—they just can't associate it to a revenue gain.

Yeah, and it's interesting. Like if I had a CRO coming in and one of their first hires wasn't a RevOps person, I wouldn't bring them in as a CRO. A good RevOps person is the lifeblood of a CRO so that you can make decisions. Because maybe it's not hiring the next sales person. Maybe it's actually reducing your staff because seventy-five percent of them aren't hitting quota or they're at sixty percent of quota. They just don't do that analysis.

Yeah, and it's hard too. If you haven't experienced the benefit, then it's really hard to justify it candidly. The first time that I saw what RevOps was possible was at a software company. We were going between our Series A and Series B, so that's when I joined. We were about three million in ARR and I was on that ride from three million to a hundred million. I remember our VP of sales—I think he was a VP, maybe had been a CRO at that point—but he said, "Hey, we're hiring a sales ops person," and I was like, "What the heck is that? And why are we even—this doesn't make a lot of sense." Clearly he knew what he was doing. But she became—where you're going with that—she became his right hand. She ran the meetings for our pipeline review, always driving process adoption, doing reporting and visibility. So when I think about the value of RevOps, where you were going is we talk about three core components: clarity, confidence, and outcomes.

So clarity of understanding what's working and what's not, the confidence to then attack the right things, and ultimately that drives the outcome, which is results. So if you're doing it right, you get the three legs of the stool that every CRO, VP of sales, CEO is going to want to have. But they have to experience the benefit first. And if they've had a bad experience with it, it's hard to justify the cost.

So it's funny you said that they were hiring sales ops, which I think is an old-school term, and I don't want to confuse it with RevOps. When I hear sales ops, I'm thinking, oh, a Salesforce administrator or a HubSpot administrator. RevOps, I think over the past several years, has become a pretty big buzzword. Where do you think people get RevOps wrong? Like what is RevOps in your mind, and what do people think it is that it is not?

Yeah, it's a big one. I think, too, I'll start with where you began the conversation, which is it is an evolution. It's really looking at how sales ops is—and I dated myself a little bit—but sales ops was really the key to your point of like a Salesforce admin. And then we saw this evolution where it was, "Hey, we need to not work in silos, but we need to think about go-to-market holistically." Meaning, from a lead all the way to a customer and that entire customer journey, how do we ensure that we have a point of view and ultimately visibility to a system that really helps us monitor the actions and behaviors that are going on in that entire customer journey?

And that's really where the RevOps piece came into play: from marketing to sales to CS, how do we have coordinated alignment from a process definition perspective, the user journey, but also the coordination amongst the teams? And so that's kind of the impetus, or at least the origin, of RevOps.

Now, like what it is and what it isn't. I think there's a lot of buzzwords to your point earlier of what RevOps is and isn't. For us, it's like how do we weaponize data in a way to equip and empower the teams to take the right action at the right time? If we do that, then we have been successful.

And so that when we talk about clarity, confidence, and outcomes, that's ultimately what we're doing is say, "Hey, let's create a framework, a methodology, and a process that everyone is doing, so therefore we can actually report on those behaviors, and then we can drive the right actions from the go-to-market team." So for us, that's what we focus on is how do we create process adoption, how do we then create reporting, and then how do we then drive behavior? That is success for us.

RevOps, I think where it goes poorly, well, there's a lot of ways it goes poorly, but we really try to fit in this Goldilocks position of strategy and execution. And so you see a lot of consultants that will talk about buzzwords that we mentioned earlier, but they don't know how to necessarily operationalize that inside of a CRM. And then you have people that say they do RevOps, but they're more tactical, and they don't have the go-to-market strategy and approach to inform what they should be doing. And so when you're on either side of those, generally what happens is there's just a gap, and it creates a lot of problems because either you're creating technical debt on the tactical side because you don't have the context, or on the strategy side, you're providing a 100-page slide deck that then just sits on the shelf and no one actually does anything with. And so it just becomes a waste of spend. So either is a bad experience for the CRO, the VP of Sales, or the CEO. But we're trying to say, "Hey, how do we marry those two concepts?"

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I want to piggyback for a second. So another fancy buzzword right now is GTM engineer. And I mean, hell, we're hiring for one for one of our clients. In fact, your website, when you pull it up, actually says RevOps plus GTM engineering. What's the difference?

Yeah, so our mission statement is engineering revenue outcomes for the go-to-market leader on HubSpot. So engineer for us, yeah, it is a buzzword, and Clay, to their credit, has done a good job of creating a category. And like, when you're a category creator, you usually win. And so we do need to be mindful of where the market is headed from that perspective.

I would say the difference between a RevOps—I mean, it's the evolution, you can kind of go down that route—but RevOps to us is more of a doer in the sense that, hey, the system design, source of truth, creating the reports, helping think through, hey, where are the gaps or the leakage in the funnel from a could it be volume perspective, could be a conversion perspective, but it's serving that role of, "Hey, I'm going to give you the actual intelligence by which to make decisions on."

For us, the engineer gets more into, how do I orchestrate, meaning, how do I execute demand in that example. And so for us, that's the delineation. There are other ways people can look at it, but for our own internal purposes, that's how we think about it: RevOps is serving that CRO to give them visibility insights, and the engineer then is taking that action based off of the insights that have been provided to drive demand.

I like it. I love that. And what is interesting is as we evolve the revenue operations world, I can tell you like when we hire a RevOps person, the CEO, the CRO's eyes light up and they really understand it and makes us look good because we're like you guys get to have this. And sometimes it's a bit of a struggle along with it. But as we go through this, what's one question a CEO can ask if they know that RevOps is broken?

Do you know why you hit your number? Like, back to saying that's a good example of, you know, it's like the—it's not a question of effort. Often times people are just hoping they get to the number. And so did you hit your number yes or no?

Hope is not a strategy.

Yeah, I mean like they, most people can say did I hit my number yes or no. But then if you take a layer below, it's like why or why not? And that's where they start to have a lot of gaps. And so one thing that to your point about what a CEO loves and that I've experienced within our own organization is we have a scorecard that we look at weekly that shows you exactly how we're trending to the target for all these different leading indicators. So for us it could be how many deals are we creating on a weekly basis? And what are the sources of those deals? Because that can help inform, "Hey, do we have a marketing problem or sales problem on where the deals are being sourced from?" Then we look at our conversion rate from what we call an SQL to close one or MQL to SQL. And so that would be another one. Average deal size, how many deals are we closing? You start to have a very clear spotlight on where the problem issues are or the opportunities are so that you can attack it in real time.

And so too often we just see with CEOs if it's working or not, it's like can you answer that question and can you answer it in real time? Because, "Yeah, I'll get back to you," is not going to cut it. Knowing what happened last quarter is informative but it doesn't impact you today. And ultimately you're trying to make the right decisions in the moment, and that's what we're trying to equip the go-to-market leader with.

What are good forward-looking indicators? So I'm going to pivot a little bit because we've been doing a lot of work with CS groups. What are good forward-looking indicators in a CS world? Like in sales it's like pipe. You have 4x pipeline for example as a leading indicator. What are leading indicators in CS?

Well, there's different things to talk about. GRR and NRR on the retention side?

Yeah, I mean that's the North Star metric, but then it gets into what's your business model? Like, are you a non-recurring business? Are you a recurring business? Are you a PLG? Because that will then inform, "Hey, what are those actions that I need to be that I want my customer or user taking to determine success." And so that's where I would start because then it kind of informs, "Okay, hey, how do I want to manage that behavior?"

So if you're in like a non-recurring revenue—let's call it like a supply chain distribution—and you have high SKU count and people are constantly ordering, then I think you're going to be looking at things like time from last purchase. Hey, what was the average deal size? Are they buying the same things? Have we had a quality issue with the parts that we've been providing? That would be on the non-recurring side.

In the recurring side it could be things around, "Hey, what's the usage look like on a weekly basis? Are we seeing support tickets that are being created for that customer? When was the last time we had a check-in with the persona that we're targeting?" Those could all be examples in recurring.

And then on the PLG, I mean that is a high usage base, so you want to see, "Hey, what actions are they taking now that they're in the system?" Because PLG is usually there's a freemium product that you're then trying to upgrade into a paid product. So, "Hey, what are they using in the system? And then how do we take those actions to drive targeted messaging so they know what else they could be using or how they could be extracting value from the application?"

So again, business type will always—in my mind will always—inform what are those key metrics, and then those metrics will inform the activity that your CSM should be taking.

All that. Thank you. But yes, the metrics around GRR, NRR, and that is kind of—it is the lever for exponential growth. And no matter what business you're in, often times the left side of the customer journey is what's prioritized, meaning sales and marketing, but the CS function—meaning the customer flywheel you'll talk about—that's really where you're going to start seeing massive growth. And often times it gets ignored. Just like RevOps, the CS function gets ignored.

So all of that makes sense. I'm going to throw a controversial loaded question out there. Where does RevOps report to? Does RevOps report to the CRO, the VP of Sales, the VP of Marketing, the VP of Success? Like, where does this role report, and who ultimately owns this function?

Well, we see a quite a—I mean we're fortunate in that we see a lot of engagements. I would say the vast majority of the time it falls—I'll call the office of

The CRO. And so whoever ultimately owns the revenue number is generally where we see that falling. It could be a CEO, candidly, just depending on the size of the organization. What we have seen—I would say it's not an emerging trend, but I do see it more. It's not an outlier. So let's call it 20% of the time right now—is the office of the CFO, because the CFO has more power than ever before as we think about, "Hey, growth at all costs is dead. We need to be thinking about not just revenue, but profitability. How do we balance those? How do we look at our go-to-market efficiency?" That CFO voice has risen, and RevOps is giving that data and intelligence reporting that a CFO actually really values. And so we're seeing that grow. I'm not making a prediction that it will be the majority of it, but I do think that finance has to be part of the equation. And if you're a CRO and you can't read a balance sheet or you can't read a P&L, you're going to be in a world of trouble. I will make that prediction.

You will be out of a job. And so because you have to know the balance between revenue and profit, because you have to have sustainable growth. And so being able to have that conversation and dialogue with a CFO is really important.

So what's the cost of waiting too long? We all have costs, and we talked a little bit earlier about how sometimes a CRO—the next hire is not really revenue ops. It's another salesperson. So what's that cost of waiting too long to hire a RevOps person?

You know, it's kind of like that "make them sick, make them well" type of metaphor. I don't know if that's the right way to frame it, but it's hard to convince somebody they need something until they actually have the pain. I mean, I wouldn't oversell on some of this. For example, you mentioned 30-40 million. We have a $40 million customer that was content working in email and spreadsheets, and they didn't perceive it as a problem. So it blows my mind.

Yeah. And so there are actually thousands of companies that fit that profile. It's not like everyone is in dire need. I think that would be disingenuous to say that. To me, it's usually when the pain becomes, "Hey, I'm not hitting my numbers and I need to know why." That could be an example of a pain point. Another pain point could be, "Hey, I need to transform the way I go to market because I'm launching a new product. I'm going to a new region, and I need to have some data to help me understand what I'm supposed to do. I'm increasing the size of my sales team, and I need it to be fully distributed. I need to know what they're doing on a daily basis, and I don't know."

Those things are examples of triggers—"Hey, we probably need to be investing in some way that is managing the system on our behalf"—because usually the challenge that we see with the persona that we serve is they either don't have the time or they don't have the expertise. It's usually one of those two things. And so they're looking for a plug-and-play operator that can help them think through those problems because they just can't. They don't have the bandwidth or they don't have the knowledge by which to actually execute it. So the cost—it's hard to quantify, candidly, and that's probably not a great answer for this podcast—but I just think it's really dependent on what is triggering the need, and then you can start quantifying, "Well, hey, the cost of an action is this."

Because often times, if you're going to a new market or new product, you're about to spend hundreds of thousands or millions of dollars into said initiative, and then it's very easy to say, "Well, okay, if you're just hoping and guessing, it's going to be a problem."

You can also say that most clients that we go into are running their business from a top-down model, right? They're saying, "Hey, we did 20 million this year. We need to do 26 million next year"—some number they come up with, either a board puts in, an investor puts in, or they just want from an overall perspective. Or they pull a random GRR number out, like, "Oh, we need to get above 90%. That's what the market's saying right now." Instead of really looking at the data and coming up from the bottom like, "How many leads do you really need to generate an opportunity? To generate a closed deal? What are the percentages all the way down that pipeline?"

And I can tell you in a lot of places the data is so dirty that doing that analysis is a lot of work. It's not something you just hire somebody for and say, "Okay, go tell me what my NRR and GRR is over the last five years."

I mean, it's a great point, and our best lead source and part of our ICP is exactly what you just described. It's like, "Hey, they're doing the waterfall for growth targets on spreadsheets, and they're like, 'Hey, you guys don't have any of this. Not only do you not have it, but it's not inside your CRM, and this is a problem.'"

And there's a reason why—or one of the things—if you look at the average tenure of a CRO, it's less than 18 months. It's the shortest tenure of anybody in the C-suite. And we were kind of joking about this—one of the things is a CRO needs to be financially literate, meaning you need to know how to speak to the CFO. And that's not new. I'm not being mean. I didn't know how to read a balance sheet or P&L until I was in the CEO role. I wish I had known when I was a CRO. So that's one. But two, you have to know the data. And if you don't have the RevOps person, you can't even engage in that waterfall math, to your point. And the scrutiny is higher than ever before for the reasons we already talked about. So that's a really good point on the data side.

Awesome. So much bad data out there. So much of it is because people bring in RevOps too late, and they're not unifying their systems and not having one cohesive system of record. But I digress, and I could go on about that for the next hour and a half.

With that, we are at time to shift into some rapid fire. So the rules here are 10 words or less for every word over. Dale owes me $10. So feel free to go as over as you want.

Brendan, what's the one go-to-market metric that founders obsess over too much?

It's a good question. A singular metric? I see you said 10 words or less. So I need to stop talking.

You're fine.

Deals created.

Okay. What's a harder role—the CRO or the revenue operations leader?

CRO. I mean, it's like the quarterback in football. You get all the glory or you get all the blame. It's a big burden to carry.

What would you never implement again that you've implemented?

ActiveCampaign. Not that it's—I mean, we—I can't do more than you said 10 words, so I'm using one word.

That would go—go ahead, please. Well, when we were first starting the business, we knew we didn't want to do Salesforce. Not because Salesforce is a bad tool, but it's a really crowded market. We knew we wanted to differentiate. We needed to have a platform that could do all phases of the customer journey. And ActiveCampaign, at least at the time, was an okay marketing product, but it was a terrible sales product. So it was a very painful experience.

Awesome. What's one tool that companies rely on too heavily?

What's going on? Is it like, what is becoming obsolete? Or where are you?

Something like, you know, they're making decisions based on data coming out of the system. Or I mean, it could be AI now, right? Like people are generating AI and not really checking the data, and then all of a sudden it's hallucinating.

Yeah, I mean, I think the big one right now is what we're seeing a lot of is insert whatever email provider you're using. Could be Salesloft, could be Outreach, could be Gong, could be—you know, people can do more now than they ever could, but the problem is the volume doesn't translate to results. So they have all this information they can start using, but in fact, it's actually having the opposite effect. It's impacting brand, it's impacting deliverability, and it's detracting people as opposed to attracting them to said product or service.

What's one system you thought would fail, but actually worked?

May I answer it a little bit differently? Like an application that I was skeptical of that I love—it is like conversational intelligence. Like we use Gong a lot. But, you know, insert whatever—

Ask Elephant, Gong, whatever it may be. The power of a tool like that is actually quite exceptional. If you set it up properly, because you can things like keywords, you can monitor for—yeah, could be for an upgrade for your business, could be for a cross-sell for your business, it could be a customer experience that you want to capture. It could be sales training. I would say that of things that have been hyped up, I would say that one has actually lived up to the hype.

Last one: dream vacation destination. Ooh. My family—so I have three little kids. We do like experiences, I guess is the short comment. And then so we'll do national parks the week of Memorial Day. So like this year we're going to Banff in Canada. And we did Zion last year and Grand Canyon. So I mean I have little kids that are active and it's a lot of fun. So that's our dream vacation. We just did Zion as a company.

Oh, nice.

Yeah, it was fun. A lot of fun.

Zion and I'm doing Whistler in a couple weeks with my kiddo.

Oh, that's great. So we are all about experiences as well.

Brendan, where could people learn more about y'all, more about your services? Pitch it.

Look at you using y'all. I like being with some southern folks. So we are—I mean, really two places are where you can find us. I mean, LinkedIn—we're pretty loud. And so you can find Red Partners there or me. I don't even know my handle, but Brendan Tallison is my name, so find me there. And then, you know, if you're on HubSpot or you're considering Clay and you're looking for some support, we'd be happy to give you some guidance or thoughts on the best way to set up your system to scale. So I'd say LinkedIn's the best place for me.

Cool, man. We appreciate it. Thanks for joining the show.

Thank you. Thanks, y'all.