Why Sales Ops is the Key to Revenue Growth
0

A few years ago, Selling Power asked Price Burlington, a longtime sales leader at SAP, to summarize the role of the modern Sales Operations team. Sales Ops is notoriously difficult to sum up, but Burlington nailed it.

“Everyone is concerned with driving revenue, which often comes down to finding a way to improve productivity without hiring more salespeople,” he told Selling Power. “The question has become, how do we make the sales process more efficient without just adding more bodies?”

Burlington’s definition of Sales Ops — centralizing tasks and strategy to make individual reps more productive — is actually important in two ways: 1) it succinctly describes why sales teams of a certain size add a Sales Ops function and 2) it challenges a persistent myth that has dogged Sales Ops for years.

Since Sales Ops has emerged as a common feature of the modern sales team — roughly the 1980s — it has been fighting a stigma. Viewed as the behind-the-scenes (read: glamorless) sales function that everyone needs but no one wants to think about, Sales Ops is thought to do the dirty work that allows sales reps to bring in revenue. Like the line cooks in a fine-dining kitchen, Sales Ops keeps everything organized and on track so that the “real stars” can work their magic.

Or, as Barry Trailer of CSO Insights puts it in the same article, “[The traditional Sales Ops role has been expected to] forecast travel expense or monitor how well sales were doing versus projected estimates.”

Glamorous stuff!

But that stigma is changing. The last few years have seen a rapid evolution in (and elevation of) the role of Sales Ops.

Back to Trailer: “But from these humble beginnings, the role has evolved. Now the VP of Sales looks to the Sales Ops Manager, not just to give the numbers, but to help interpret research.”

Suddenly, it seems, everyone’s coming to the same conclusion: Sales Ops isn’t just about doing the dirty work to free up the real sales stars. Sales Ops is about turning strategy into revenue.

Now the VP of Sales looks to the Sales Ops Manager, not just to give the numbers, but to help interpret research.”

Identifying the Destination

Before we go deeper into the specific ways the Sales Ops function has changed, let’s step back and talk about how startups typically function, from the top down.

Once startups make it to the expansion stage (those that are lucky enough to make it there at all), they start to really think hard about sales execution. Their product is in good shape, the team is growing, and now it’s time to start selling some software.

Pasted image at 2016_03_22 02_31 PM

At this point, board room discussions start to follow a fairly familiar pattern. “Here’s how much we need to increase revenue this year, here’s the market we’re going after, and here’s how much we’re going to spend on sales and marketing to get there.”

From here, the startup’s founders and executives have a destination marked on their maps, and now it’s time for them and their team to figure out how to get there.

Charting the Course

And this is where Sales Ops comes in. Sales Ops is, in many ways, the bridge between the broader go-to-market strategy determined by the management team and the specific tactics used by the sales team to push forward to that goal.

How should we set quotas? What’s the best way to segment our sales team? What tools can we implement to make our sales team operate more efficiently? How can we repair breakage in our sales process to execute as effectively as possible? 

In this post, we’ll help answer these questions and explore the 3 components of Sales Ops’ mission to turn strategy into revenue.

Section 1

Setting the Bookings Goal

Section 2

Measuring Performance

Section 3

Ensuring Success

Turning Strategy Into Revenue

Setting the Bookings Goal

The bookings goal is the cornerstone of a startup’s go-to-market strategy. It determines how they build their teams, divvy up their budgets, and focus their resources.

The problem is that the bookings goal is inherently a balance — a balance between reaching ambitious growth goals and the capacity of the teams in question.

Sales Ops plays a crucial role in aligning these realities. In the best companies, Sales Ops doesn’t simply react to a bookings number determined in the board room, but instead provides crucial input to root this number in data.

The Right Input

No one is in a better position to use data to determine what the sales team, at full capacity and fully resourced, can achieve than Sales Ops. This information is a crucial ingredient (perhaps the most crucial one) in how the executive team and board set revenue goals that are sufficiently ambitious while still being attainable. 

Once the bookings goal is set, it’s time to move on to the next step in the process: designing the sales process to achieve that number. This is where the true work of Sales Ops comes in: taking the bookings goal and designing the sales process that will get the sales team there.

More on Sales Ops

The Shifting Role of Sales Ops

Masters of Change Management

Getting the Most From Salesforce

Designing the Sales Process

The number is set, the resources marshaled — now it’s about the process. The one thing all sales philosophies agree on is that a formalized sales process is the cornerstone of (efficient, repeatable) revenue growth. In fact, the Sales Management Association, a leading institution in researching best-practice sales management, found that companies that have a structured sales process in place see 18% higher revenue growth over companies without one.

Your company’s sales process is the road that every buyer follows ‒ which means that the Sales Ops team must take these three steps to make it well-marked, closely regulated, and as smooth as possible:

Sales-Ops-3-step-Process

Measure Your Sales Process

Even with the perfect blueprint, the sales process can look very different in practice than it did on paper. The trap most companies fall into is rushing to implement their plans without putting in place a consistent method for tracking performance.

Why Sales Ops is the Key to Revenue Growth

The way to avoid this common trap is to make sure you’re regularly measuring sales performance and analyzing stage-to-stage conversion rates. Just as economists balance the models they make with what they observe in the real world, Sales Ops members must tweak and update their sales processes based on the data they’re seeing from the actual sales room floor.

Measuring Sales Performance

You can’t improve your sales process if you don’t know how well it’s performing. Because the sales operations team has to anticipate and neutralize obstacles in the sales process (and, consequently, the buyer’s journey), they need to see exactly what’s happening in order to optimize the sales team’s performance (and address its shortcomings).

Accurate KPIs that reflect the effectiveness of the sales team’s activities act as the leading indicators that the sales ops team needs. Perhaps the most fundamental aspect of this process is defining sales stages and tracking how opportunities progress through them.

Analyzing Conversion Rates

On paper, conversion rates are very straightforward ‒ they are simply the percentage of sales opportunities that progress from one stage in the sales process to the next. The hard part is determining the number of stages to use and setting appropriate exit criteria.

If your sales process doesn’t have the right number of stages, you’ll have a hard time getting any actionable information out of your conversion rates. The sweet spot for most companies is to create around 5-7 stages that accurately reflect the buyer’s journey and are easy for reps to record in their CRM system. (Our 2016 Sales Benchmarking Analysis pegged the average number of sales stages at 6.7.)

SaaS-Benchmarks-with-click

Interactive

SaaS Benchmarks

See how your company stacks up against others in your industry by exploring our filterable SaaS metrics.

Processes with fewer than 3 stages don’t offer enough data to allow for meaningful analysis, and processes with more than 8 stages become convoluted and unwieldy. 

Funnels with 5-7 stages off the clearest picture of what’s actually happening to the opportunities in your pipeline.

SalesLeaders_salesfunnel

Defining Stages

Once you’ve figured out how many stages to have in your sales process, you should focus on clearly defining those stages so that they are intuitive and non-overlapping.

Your stages should reflect the stages your buyers go through, but there is a pattern for how most B2B companies separate their stages. Here is a common framework that can help you start defining your own stages.

PrFi1rnWEALnyvCMNQsPKwy3qshIdK

Common Problems

The entrance and exit criteria that delineate each stage should come in the form of a timely action that pushes the buyer further down the funnel and is easy for sales reps to record.

Without clearly defined criteria in place, the stages of the sales process get blurred and, ultimately, become meaningless. The entrance and exit criteria provide borders that enable to show the progress and momentum of an opportunity.

When Sales Ops teams struggle to settle on the number of stages and exit criteria for the sales process, it’s usually for three reasons:

  1. The stages don’t accurately reflect the buying process
  2. The activities they track don’t correspond with action from buyers
  3. Sales reps don’t provide accurate data

These problems are common, but should not be ignored. They can really only be solved by regular and structured interactions between Sales Ops and the sales team.

Which means that the final piece of the strategy-to-revenue puzzle is working directly with the sales team to make sure that the process you’re putting in place is powerful, actionable and sustainable.

Ensuring Success

You have your blueprint in hand and data-driven method for tracking performance in place ‒ you’re finally ready to make the leap to turn strategic plans into new business.

There are two core pieces that ensure the success of this process: data-driven communication and sales enablement. In this section, we will look at how you can use these two components to take the final leap in turning strategy into revenue.

Communication

Even with clear, objective data in hand, you still have to create accountability in order to put solutions into action. The most effective structure for creating that accountability is old-fashioned, face-to-face meetings dedicated to putting resources in place that will iron out kinks in the sales process.

A weekly “closed loop” meeting that pulls sales managers, the sales VP, members of the sales operations team, and the marketing VP into the same room is the most effective structure for identifying and communicating needs across the organization.

The Sales Ops team should be the organizers of these meetings. They need to be ready with reports about the health of the sales team, have an agenda on hand to discuss the most problematic obstacles the sales team faces, and most importantly, be ready to mediate discussions between members of other departments.

The frequency of these meetings is important — when there are longer intervals between each meeting, it’s more likely that data entry errors will go uncaught, cracks will form in between stages in the process, and problems with the sales process as a whole will go unaddressed.

Reliable sales data shed light on the immediate needs of the sales team, and closed loop meetings act as a forum to coordinate the response to them. These are the two components of a communications strategy that will enable you to implement and maintain an effective sales process.

With a well designed, measurable sales process in place and clear lines of communication set up, the last step to execute on a sales strategy is to put tools and workflows in place that will ensure long term success for your sales team.

Enablement

The point at which strategy turns into concrete projects that directly impact the top line is broadly known as sales enablement. There are a lot of different tools and services that fall under this umbrella – click-to-dial software, analytics, lead scoring, leaderboards, marketing content – everything in sales except the selling.

It’s instructive to look at several different definitions of sales enablement in order to carve out the role that sales operations teams play in it. The official definition from Forrester Research is:

A strategic, ongoing process that equips all client-facing employees with the ability to consistently and systematically have a valuable conversation with the right set of customer stakeholders at each stage of the customer’s problem-solving life cycle to optimize the return of investment of the selling system.”

Steve McKenzie, VP of Sales at InsightSquared, adheres to a more direct definition of sales enablement. In his words:

Sales enablement is the process by which we turn our reps into the best versions of themselves.”

The definition from Forrester is right in line with the strategic goals of the sales operations team – understanding the buyer’s journey, and putting tools and processes in place that empower the sales team to maximize the likelihood that prospects will continue down the path to becoming customers.

The second definition gets to the heart of the salesperson’s definition of sales enablement – “it consists of anything that will make me better at hitting my number.” Conceptually, the two definitions are the same. The role the sales operations team plays is to ensure that the strategic and operational definitions align in practice as well.

That’s why it’s important to build up to the point of being ready for sales enablement — if you don’t have a strategic plan in place with a functional bookings goal and a systematic process tailored to meet it, your sales enablement initiatives will be misaligned and doomed to failure.

When you have done the legwork involved in creating a viable sales process, it’s much easier to break sales enablement into incremental, actionable steps. In fact, the internal sales enablement process looks a lot like the sales process itself:

  1. Use sales data to identify needs
  2. Evaluate potential solutions (tools, workflow changes, etc.)
  3. Justify the cost and prove ROI
  4. Implement the solution

If you have a well-defined, clearly documented sales process, you can easily identify the sales team’s needs (both present and future), speed up the evaluation of new tools, argue your case for the team that has to approve the cost, and keep an eye on how well the solution is benefitting the sales team as a whole.

In short, by building the sales team’s needs into the wider company goals and creating a framework to keep

Conclusion: Welcome to the Golden Age

If ever there was a golden age of Sales Ops, we’re in it now. Nearly every tech company is adding or expanding the function to make their sales teams more efficient and effective. Through the steps outlined above, these sales teams can use Sales Ops functions to move from the high-level strategy that guides their company’s’ direction to the nuts and bolts of generating predictable revenue.

Average sales operations teams can perform effective post mortems on past sales performance and tell their leadership what went wrong. Good sales operations teams can perform analysis on the current trajectory of their sales team and warn them about what could go wrong.

The best sales operations teams combine historical data, current trends, and insights from the rest of the sales team to not only predict what will happen, but create a strategy to ensure that the bookings goal is always in reach.

Which brings us back around to our original point: the sales operations team holds more responsibility for hitting the bookings goal than anyone else in the company.

Sales teams that succeed today do so because they have support from operations teams that enable them to create sound strategies, arm their reps with the tools and training they need to win deals, and conduct the flow of useful information up and down the entire chain of command.

The best part is that there’s no reason that average sales operations teams can’t become great. In fact, you now know exactly what it takes to get there. If your company is falling behind its goals, step up, draw up a plan, put it into action, and get your team back on track.

Insight Squared
Recommended Posts