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Understanding your business model is essential for a successful Revenue Operations (RevOps) strategy. RevOps is all about streamlining processes, enhancing collaboration, and driving sustainable growth. But without a clear understanding of your core business model, it's difficult to determine the right strategies that will make a meaningful impact.
In this blog post, we'll introduce you to the RevOps Business Model Analyser—a simple yet powerful tool that helps you define your business model in a way that aligns well with RevOps best practices. By the end of this post, you'll have a clearer understanding of your business model and how it can be optimised to kickstart your RevOps journey and boost your revenue growth.
The RevOps Business Model Analyser is a visual framework developed by our team at SpotDev. It categorises businesses based on two core elements of their operations—customer commitment and sales model. By understanding these components, we can map your product or service offerings on a 2x2 matrix, which will help you make key decisions in your RevOps strategy. This process will empower you to align your business operations effectively and maximise revenue growth opportunities.
How to Draw the RevOps Business Model Analyser
At SpotDev, we use the RevOps Business Model Analyser to categorise businesses based on two key factors:
Customer Commitment
Are your products or services purchased as a one-off or on a recurring basis?
One-off transactions: Examples of one-off transactions include purchasing a brand-new Mini Cooper (where the customer will keep the same car for a few years) or investing in a website design project (where they're unlikely to change the overall design for at least three years). These purchases are typically significant and do not happen frequently, so businesses need to ensure that customers have a seamless and informative buying experience.
Recurring transactions: Recurring transactions refer to situations where customers purchase the same product repeatedly. This might include subscribing to Netflix (where they're making a monthly purchase for access to the same video library each month) or purchasing Gillette razor blades (where they're committed to purchasing the same blades because they bought a specific razor handle). For these businesses, maintaining consistent value and ensuring customer satisfaction is crucial to encourage long-term retention. Customer loyalty (or 'lock-in') is vital for a recurring transaction business.
Sales Model
Is your business sales-led (requiring human interaction) or self-serve (where customers complete the transaction themselves)?
Sales-led: Sales-led models are typically necessary for high-value or complex purchases where customers need additional information or assurance. For example, when buying that Mini Cooper, you're likely to speak to a salesperson (the self-serve market for cars does exist, but it's still a predominantly sales-led environment). Sophisticated enterprise business software is often a sales-led process—buyers expect a demo, a price negotiation, and assurance that the long-term commitment will meet their business needs.
Self-serve: In self-serve models, customers complete the buying process independently without interacting with a salesperson. That Netflix purchase isn't going to involve an on-site visit from a salesperson to measure your living room—you'll use an online signup form. You're not going to ask a Gillette salesperson to join you on Zoom for an hour-long demo—you'll put it in your Amazon basket or pop it into your trolley at Tesco. Self-serve models support buyers who expect a transactional relationship with the vendor—they rarely want an account manager to call when things go wrong.
Plotting Your Business on the RevOps Business Model Analyser
Once you understand how your business fits into each of these two extremes, you can plot where you sit on a simple 2x2 matrix that we call the RevOps Business Model Analyser.
Your business may have multiple products and services, and that's fine. If so, then plot where each offering sits. For the purposes of this exercise, think in extremes. Don't worry about the extent to which your business is self-serve or sales-led—just pick a quadrant. You can tackle those nuances during other RevOps processes. Our goal at this point is to think at a high level.
Categorising Your Business
With your business (or specific products/services) mapped into the matrix, you can now categorise your business. At this point, don't worry about the specific names—if you find that you're a 'Shop' but don't have a physical premises, that's not a problem. These are just terms to broadly categorise your current model.
The categories are:
- Shop (One-off, Sales-Led)
- Service (Recurring, Sales-Led)
- Dispenser (One-off, Self-Serve)
- Subscription (Recurring, Self-Serve).
The RevOps Implications of Being a 'Shop' (One-Off, Sales-Led Offerings)
The Shop category applies to businesses that provide one-off products requiring a sales-led interaction, such as buying a car or a custom-built website.
For example, the Mini dealership we mentioned earlier would be classified as a Shop. The car purchase is significant, and customers typically do not make such a purchase frequently. Therefore, the focus here is on ensuring a seamless and informative buying experience.
As a Shop, you need to ensure that the buying experience itself is pleasant and supports the buyer in making a very considered purchase. The car dealership might only become aware of the customer when they step onto the forecourt, but how can you build experiences that help users see your sales process as highly supportive and enjoyable?
I went on a Land Rover off-road driving experience last year. They had all my information, and I had a great day driving a beautiful new Land Rover Defender through a dedicated track. But nothing happened after that. What a missed opportunity to engage me with pre-edited video clips of the day, ready for me to share on social media. Where was the reminder 12 months later that I'd had a fantastic day, with a photograph of a huge smile on my face at the wheel of a brand-new car? Why wasn't I invited to my local Land Rover dealership to chat with others about my experience and hear a talk from a famous rally driver?
A Shop has to make the buying process an experience. It has to leverage the data it has to keep you coming back to the Shop, where you'll eventually make the purchase. You want your buyers to feel at home in the (physical or virtual) environment where that transaction will eventually happen.
The RevOps Implications of Being a 'Service' (Recurring, Sales-Led)
If your business offers recurring services that require human interaction, you fall under the Service category.
A cleaning company, for example, will send someone to your home on a regular basis. Yes, that person's there to clean your house, but they're representing your brand the whole time. This human-led interaction is a huge opportunity for your business but also a huge risk—you increase the number of interactions, which increases the chances of a misstep. One poorly judged joke from the cleaner, and you've lost that recurring revenue.
Equally, a marketing agency will meet with the client's CMO on a regular basis. Week in and week out, they'll discuss strategies to win more business. When the agency's consultant misses a deadline or says something that shows they don't understand the client's business, the trust is quickly broken, and the retainer is put at risk.
As a RevOps professional, you're thinking about all these interactions. You're looking for ways to ensure that the data you have from all those interactions is stored and actioned. How are you capturing the promises made by the marketing consultant and ensuring they're delivered upon? How are you tracking that the cleaner turned up on time and cleaned the rooms the customer wanted cleaned?
Capturing this data, surfacing it for the right team members, and using it to build trust is at the centre of a RevOps strategy for a Service.
The RevOps Implications of Being a 'Dispenser' (One-Off, Self-Serve Offerings)
Businesses that provide products in a one-off, self-serve manner are categorised as Dispensers. Think of Amazon's fulfilment of a single product purchase or a vending machine—these are classic examples of Dispenser models.
When buying from a Dispenser, customers want a purchasing experience that they'll forget. As soon as your buyer has to think about the sales process, they will get frustrated and may walk away.
Your buyer might land on an e-commerce product page where the product is out of stock. They'll go back to Google and find someone else who has it. A RevOps professional will want to surface alternative offerings on the product page or hide out-of-stock offerings from listing pages.
If they're using a vending machine and can't easily see the contactless card reader, they'll walk away unless they have a bunch of coins in their pocket. A RevOps professional will be looking at purchase rates from machines with contactless readers compared to those that just take coins and will look to move the best machines to the locations with the highest footfall.
For a Dispenser, a RevOps professional is looking for easy ways to capture and use data. If that e-commerce page is out of stock, make it easy to sign up for a notification when it's back in stock.
The RevOps Implications of Being a 'Subscription' (Recurring, Self-Serve Offerings)
Finally, Subscription businesses provide recurring services in a self-serve model.
When buying from a Subscription, customers want to quickly understand what they will get for their money. A Netflix customer might expect a seven-day trial, so they can get hooked on the latest season of Bridgerton but have to subscribe to get the second half next month. Harry's (a subscription-based retailer for shaving products) lets you purchase a razor for just the cost of delivery (£3.95 at the time of writing), but you're also signing up to a recurring subscription of their razor blades. The user gets the razor, has the experience of shaving with it for a few days, and will get their first replacement blades just before they need them.
A RevOps professional at a Subscription business is looking for ways to convert trial and first-time users into loyal customers. They'll send heavily-tested emails to users on a frequent basis during the first days of their trial. They'll look for data that shows what worked with similar customers and use that information to create social proof ('3 people on your street signed up to Harry's this month') or increase the likelihood that the customer will continue subscribing ('people who watched all episodes of Bridgerton in one week also enjoyed Downton Abbey').
How RevOps Professionals Grow Revenue by Moving to Adjacent Quadrants
As you may have noticed, highly capable RevOps professionals can find opportunities to grow revenue by designing customer journeys that move customers from one quadrant to an adjacent one. A Self-Serve business might find an opportunity that is Sales-Led (or vice versa). A Recurring business might explore opportunities that are One-Off.
This adjacent movement in the quadrant can help unlock revenue that is easily won due to the context and knowledge that you have about your existing customers.
Let's look at the car dealership example again. Your customer purchased their Mini Cooper during a pleasant, supportive, and engaging Shop-model experience. If you've ever purchased a car, you know that all manner of upsell occurs right at the end of the journey. But, even if they don't purchase the add-ons, a RevOps professional can leverage data to create a powerful adjacent move from 'Shop' to 'Service'.
You know when the car is next due for an oil change. Using that data, you can automatically follow up with opportunities to sign up for a recurring service package. A month before the oil change is due, you can automate a task for the same salesperson to phone the buyer, invite them back to the showroom to test drive a different vehicle while their car is given a free oil change—provided that they sign up for your service subscription. They've moved horizontally across the matrix from Shop to Service.
Alternatively, a Subscription might look to become a Service, which is a very common movement in enterprise SaaS offerings. A single department might sign up to the 'Professional' tier of your software. Once the users reach a certain level of engagement and activation, with positive NPS scores, a salesperson might reach out to the most engaged senior user and ask about other departments within the business—'why not sign up to our flagship Enterprise offering, and we'll give you all these extra features to use across the whole business'? They've moved vertically from Subscription to Service.
Don't Annoy Your Customers by Trying to Move Across the Diagonals
This movement from one quadrant to another only works with adjacent movement—moving horizontally or vertically. Generally speaking, you can frustrate your customers by trying to move across the diagonal. It's just too disconcerting a change.
Extending our exploration of car dealerships, I had an interesting experience after my Land Rover day. They'd failed to get me back after my off-road experience, so I found myself at a BMW showroom. I was reasonably far down the route of buying a new car when the salesperson explained the heated seats to me.
At first, I was surprised why heated seats were a topic that needed explanation. Surely, I just press the button, and the seats start heating. That's true, the salesperson explained, but only as long as my heated seat subscription is active. I was so surprised by this that my trust was broken, and I soon left the showroom without making a purchase.
I couldn't understand why a company would expect me to buy a car with heaters physically in the seats and then expect me to pay a monthly subscription to keep that working. I'd already paid for everything that was required. On top of that, I couldn't sign up for that subscription there and then. I had to purchase the car, sign up for an online service, and then purchase the heated seats subscription.
They moved me across the diagonal. I was purchasing in a One-Off/Sales-Led 'Shop' experience. The subscription to heated seats was moving me horizontally over to Recurring, and the need to do it from the online store pushed me vertically to Self-Serve. I'd gone from purchasing from a Shop to purchasing from both a Shop and a Subscription at the same time.
It made no sense to me. So I left and bought a second-hand car that had heated seats and no subscription.
Customers get confused when a company tries to move them across the diagonal in one movement. Move horizontally or move vertically. You can even move to one adjacent quadrant, wait a short while, and then move to another adjacent quadrant. But avoid doing both at once. Customers are disconcerted when you cross the diagonal.
The Key to Unlocking RevOps Success
Understanding your business model is the cornerstone of an effective RevOps strategy. By categorising your offerings with the RevOps Business Model Analyser, you can determine which automation, sales, and customer relationship tactics will drive sustainable growth. Whether your business is a Shop, Service, Dispenser, or Subscription, knowing where you stand enables you to craft customer experiences that increase retention, improve sales processes, and ultimately boost your revenue.
To kickstart your RevOps journey, take the time to plot your products or services on the Business Model Analyser. Once you have clarity on your model, you can implement RevOps initiatives that bring value to your customers while achieving your growth objectives. At SpotDev, we're here to support you every step of the way.
Get in touch today to learn more about how we can help maximise your revenue potential.
