A fine-tuned sales operations group can be just as crucial to success as a few top-performing sales representatives. This is not to say that sales reps are less important. Rather, a well-functioning sales ops team can have a greater impact on business results than a few really good salespeople.
Strong sales ops teams improve the effectiveness and efficiency of all salespeople. Many start-ups inherently understand this concept and make it a priority. They hire the most experienced sales ops leaders they can in Series A funding rounds.
Today’s top sales ops groups have a direct impact on decisions about how the organization goes to market, and what tools and systems are needed, and how they are deployed and used. Successful navigation of these complex expectations and opportunities positions the sales force for greater productivity. In this way, sales ops – once regarded as a mere administrative arm of the sales organization – has increasingly become a true business partner, even surpassing HR and Finance.
Core sales ops responsibilities range from tactical to strategic and high value-added, as shown in the chart below. While tactical tasks are still performed, progressive organizations use sales ops to drive sales planning and analysis, and to transform traditional sales organizations into highly effective go-to-market strategy implementation machines.
Four Ways Sales Ops Makes a Difference
Let’s look at some specific areas where Sales Operations can make a quantifiable impact: sales forecasting, sales and proposal processes, quota setting and sales recognition, and territory design.
1. Sales Forecasting
Pipeline management is enhanced when sales activities are tracked through CRM systems. The impact is further multiplied when these systems support and encourage team-based selling. Why? Because effective sales teams can have a greater impact than talented lone rangers.
Sales success now requires a distinct shift in culture. It starts with analyzing customer and prospect-level sales data to create sales forecasts. Historically, companies relied on sales reps to make these forecasts. Not surprisingly, these forecasts were consistently low. Naturally, sales reps are inclined to understate their pipeline. It’s hard to blame them, though. The traditional, top-down approach to quota setting tends to be highly optimistic, and often ends with unrealistic quotas being set for each level of the sales organization.
The better approach is for sales ops to define the addressable market for each salesperson using data from its own systems and publicly available information. They use this data to determine the best way to segment the market and forecast account penetration. The right mix of qualitative and quantitative data allows organizations to triangulate based on what’s possible. Account data is analyzed to determine if there are patterns related to where the company has had more success over the years and if changes have occurred more recently. Essentially, sales ops’ analyses can integrate top-down business plans wtih bottom-up forecasts to create realistic sales plans.
2. Sales and Proposal Process
Increasingly, sales ops is asked to establish CPQ (Configure, Price and Quote) tools and systems. Their day-to-day awareness of how salepeople work helps them make the sales and proposal process more efficient. They can also identify best sales practices and ensure they are communicated and deployed consistently across the sales organization. Going beyond the traditional CPQ system, the best sales ops teams now load sales presentations onto iPads that integrate customer data from CRM systems into demos and examples.
Sales and proposal process tools and systems should focus on:
- Deal authorizations to preserve margins
- Pricing guidelines and discount criteria
- Rules of engagement for sales crediting, including cross border and parent/subsidiary rules and conflict management
- Synthesizing RFPs and other corporate language
- Supporting the contracting process with legal, IT and systems requirements
3. Quota Setting and Sales Recognition
Once the annual operating plan is set, it must be translated into individual sales quotas. Team selling makes this quite complicated, because sales crediting can create double and triple credit for an individual sale, especially with strategic and global accounts. Sales ops must create double credit and split credit policies that ultimately align with the overall sales goal. This way everyone is ultimately working from the same playbook. Sales ops also needs a principles-based issue resolution process where conflicts are mediated by a committee. All of these tools can be reinforced and embedded into the fabric of the sales organization through training, development and improved hiring practices.
4. Territory Design
Sales ops can help ensure sales resources are aligned effectively with the go-to-market or sales and service model. Using an account service approach, roles are deployed to develop a sales organization segmented by geography. This work can also be done for other account types such as industry verticals. Territory design is primarily focused on identifying existing and inefficient territory sizes such as excessive drive times. The objective is to create equal territories where salespeople can call on clients/prospects efficiently and determine where to increase certain staff.
Client Example: Shifting from Tactical to Strategic
A fast-growing software company had been shortsighted about its need for new sales systems and tools to support sales growth driven by recent market shifts. The company failed to sufficiently scale-up sales operations resources needed to successfully achieve its priorities. The existing architecture worked well for sales through its direct channel, but sales growth now required a more disciplined approach through its indirect channel via alliances and strategic partners.
Upon hiring a new channel sales leader, the company discovered its entire sales function wasn’t organized efficiently. So, it took decisive action. First, it bolstered its sales ops team with additional hires. Second, it gave sales ops responsibility for sales incentives, quota setting, and rules of engagement among the various sales teams, and structuring the channel teams to handle proposals. The new team deployed sales reps into new roles to exploit channel and partner opportunities and rebalance territories.
The company was able to reduce churn of existing customers by 4% and build out the number of channel partners from a handful to more than 20 within a year. In time, the company improved operations, which led to more effective partnerships and channel growth. Looking back, the company realized it could have avoided several years of sub-optimal performance by more quickly realizing the value of a more forward-looking and strategic sales ops function.
How to Build a Great Sales Ops Team
Organizations wishing to use sales operations as a strategic, value-added resource must negotiate four critical challenges in their transition:
- Staff the sales ops team with the right capabilities and headcount.
- Use RACI principles (Responsible, Accountable, Consulted, and Informed) to clarify and define roles and responsibilities for all sales roles and sales teams.
- Prioritize two or three outcomes to achieve in the first year.
- Invest in technology. Think beyond CRM. Support data analytics, forecasting, quota setting, and dashboarding.
Once deployed, companies should continuously review the sales organization and assess its effectiveness and the value sales ops brings to the organization. Then, to sustain the gains, it must keep up with technology requirements and implement ahead of the curve to maintain growth and be ready for the future.