Categories Articles, Sales and Marketing
0
3

In 2016, the best athletes are nothing without data. Take Tom Brady, the New England Patriots QB: he analyzes every movement of his body using motion tracking, looking for the “most nuanced movements,” just to improve his symmetry. These small optimizations, only available through precise data tracking, make him the best version of himself. From that comes power, and from that comes speed, and from that comes winning.

Like pro athletes, sales reps are only made better through data. The better understanding they have of the overall sales process they are involved in, and their own, personal sales techniques and characteristics, the better able they are to give prospective customers what they want and close out opportunities.

Yet, collecting and collating data isn’t exactly at the forefront of their minds. They don’t want to be updating their CRM, and they definitely don’t want to be tracking their progress in an Excel spreadsheet—they want to be on the phone, making deals, and earning revenue. Data collection is a chore for sales reps.

But if they could see the value of the data they are recording, they might change their minds. That’s where sales operations come in.

In the words of Steve McKenzie, VP of Sales at InsightSquared, “Sales enablement is the process by which we turn our reps into the best versions of themselves.”

Through the process of sales enablement, the ops team can help connect the dots for sales teams between the overall process and more closed won deals. Sales ops plays a crucial role in empowering sales teams with the information they need to make informed decisions, and focus their energy where it counts. Once reps can see how optimizing conversion rates, optimizing quotas, and managing their pipeline effectively are the key to their personal success, as well as the success of the company, then buy-in will be 100%.

Empowering Sales with Data

Increasing Conversion And Win Rates To Close More Deals

One of the most important jobs for sales ops is defining the funnel. With the data at hand, they can determine the correct number of stages in your funnel, find the right exit criteria, and determine the right shape.

Each individual sales reps will have their own funnel, and sales ops should work to understand the stages where they are losing the most opportunities. This can tell the rep whether their process is well matched to the buyer, and help identify pitfalls that are leading to lower conversion rates.

This information can show reps that even small optimizations of their funnel can help them close more deals. Typically, when looking for more opportunities to increase their win rate, sales reps will look at the bottom of the funnel for improvements. Having put in so much work, they will want to take more prospects over the line from Fulfill to Deal.

But looking at the funnel below, it’s obvious that if they concentrate on improving the “leakiest part of the funnel” from Qualifying to Evaluation, they could move more opportunities along and close more deals at the end.

Optimize Conversion Rates

Activity_salesfunnel (1)

If we were to change each of these stages by 10 percentage points, you can see how this cascades through the funnel. For example, a 10 percent point increase from Qualifying to Evaluation has a much bigger impact than a 10 percentage point increase from Fulfill to Deal:

Opportunity Count Increases

Untitled_spreadsheet_-_Google_Sheets 2

A 10 percentage point increase from Fulfill to Deal would result in 29 more deals, but a 10 percentage point increase from Qualifying to Evaluation, where they are losing the most opportunities, would result in 48 more deals closed, without any other optimizations.

But, of course, with more opportunities further up the funnel, you now have more to work with at each stage. With incremental optimizations at each following stage—10% Qual:Eval, 5% Eval:Proc, 3% Proc:Fulfill, and 2%Fulfill:Deal—your final funnel could look like this:

Incremental Increases in Each Funnel Stage

Untitled_spreadsheet_-_Google_Sheets

Through sales funnel optimizations, you now have 96 more deals—a 36% increase.

That’s easier said than done though. Sales ops should be in a position to not only present the data to reps and leaders, but also to make actionable recommendations about how they can improve to be better. In the case of the sales funnel, sales ops should be drilling down into the specific steps needed to increase conversions between each stage.

For instance, increasing sale coaching to:

  • qualify leads better to save time further down the funnel
  • emphasize clear value propositions during the evaluation stage to engage prospects immediately
  • communicate with key stakeholders early to lock-in enthusiasm during buyer procurement

Each rep is going to be different, but it’s only with this data will sales ops be able to uncover these differences and then work on individual process changes to address the problem areas.

Identifying the small changes that reps can make that, together, will have a massive impact on them individually and on the team should always be a priority for sales ops. Each of these incremental improvements that the reps are making can help them hone their skills.

Optimizing Quota To Help Reps Hit Their Targets

This is the most important number to any rep, and optimizing quota is paramount if they want to truly thrive at the organization as well as collect their bonus. Sales compensation is one of the biggest motivators of high sales performance in an organization. But, in order to have compensation drive employees like it should, effective quotas need to be set. This is where sales ops comes in.

Sales ops has historically played a big part in setting the quota and compensation for sales reps. This is done by analyzing historical win rates and the current pipeline to set an achievable, but not easy, goals:

  • Historical win rate: By looking at win rates, sales ops can see what each rep wins and loses, and their previous win percentage. Through these numbers, sales ops can set a challenging, but realistic, personalized quota attainment for each rep.
  • Current pipeline: Using your pipeline, you can see which deals are far down the funnel and set to close within the next month. This data, combined with personal insights about each rep, allow sales ops to make an informed decision about what is the likelihood of different quotas being achieved for each rep, choosing the maximum quota that will get the best for the company and the individual rep.

From there, it’s vital that sales ops continues to track quota attainment. One of the biggest challenges with quota setting is it’s often driven by the top of the organization, or investor expectations, and then falls onto reps with little consideration into the market opportunity or sales process. Sales ops needs to step in here to make sure quota setting is a cross-functional process, taking into account the many different factors that impact whether goals can be hit.

Nothing will rile a sales rep more than either missing their quota, or feeling that they could be doing more. By carefully tracking the performance of each sales rep against their goal, sales ops can drill down and see whether goals are set appropriately, as well as exactly who is underperforming or over performing, and why. A quota heat map makes it easy to see whether quotas are set too high or too low.

Quota Heatmap

Screenshot 2016-03-21 11.45.45

In an ideal scenario, every rep should make just over 100% of their quota. From this chart, you can see that 2 other scenarios can be common:

  • Andrea Matlin has been consistently above quota. In this case, sales ops can use this data to make the case that Andrea’s quota and compensation should be increased.
  • John Garfield has been consistently below quota. Sales ops can work with John to identify problems in his sales process and help him achieve quota.

In both these cases, there is a positive outcome for the sales rep. Either they are being challenged and compensated more, or they are learning about the correct process for them and given the opportunity to improve.

Sales ops should play in a big role in tracking the individual quota attainments of reps, and work to understand the reason behind underperformance and inconsistencies. By doing so, they can help reps feel more in control of their goals, which will lead to increased motivation and quota attainment.

Finding Push Rates To Increase Productivity

This is a subtle metric, but one that, when analyzed correctly, can have a big impact on the productivity of individual sales reps and the revenue of the organization.

Push Rates

Screenshot 2016-03-21 11.03.28

This is a measure of how many opportunities each rep is “pushing” to future months. If the close date of an opportunity was initially March, and then moved to April, that deal would be “pushed.”

This can have a big impact on revenue. In this case, revenue that was predicted to be booked this quarter is now pushed to the next. Now other calculations about revenue, spending, growth now have to be updated.

Taking the 68% push rate per employee from the graph above, we can see what this will do. There are ~150 opportunities available. If each opportunity is valued at $10,000, that means over $1M in deals are being pushed. This type of push rate means that over 2/3 of revenue expected this month is now pushed to next month. And this cascades:

The Effect of 68% Push Rate on Revenue

image (27)

Instead of booking $3.5M in Q1, a push rate of 68% causes you to only book $2.3M—a 34% decrease in your quarterly earnings, due solely to pushed deals. This is also the best case scenario. Obviously, as more revenue gets pushed to later months, reps will be under more pressure so the push rate is likely to increase.

Therefore it’s vital that sales ops get a true understanding of this problem to keep deals within their initial timeframe, and keep revenue consistently flowing. By identifying reps who push deals consistently, you are then able to identify issues with closing and with the pipeline. You can ask questions such as:

  • Which employees are pushing more opportunities than average this period? Is there a specific issue this month causing them to push? Sales ops can identify these one-off issues before they turn into trends.
  • How many days before the projected close date do my employees tend to push opportunities? Sales ops can identify if problems are creeping up on reps, and work with them to identify and resolve these issues sooner in the cycle.
  • How far into the future do they tend to move close dates? If reps are moving dates only a few days then it’s possible that these issues are minor and identifying them early could mean no push at all. If they are longer, then it’s likely a more systemic problem that the entire sales force might be facing.
  • Which employees are pushing close dates out the farthest? Sales ops can help these reps optimize their own cycle to stop this issue. They are likely not seeing problems early enough in the funnel, and sales ops can work with the leadership to improve sales coaching.

This is about improvement. Finding why Joe Smith is pushing so may opportunities gives you a chance to identify these issues and fix them, optimizing your entire process, and ultimately making Joe Smith a better sales rep.

In each of these cases, sales ops is using data to make reps “the best version of themselves.”

This is all about framing. Too often, sales ops’ reports are used to beat reps over the head, showing them the numbers they are not hitting, then leaving it up to the rep to figure out why, and how they can improve.

But if reps see this opportunity for what it truly is—a way for them to be more productive, more efficient, and ultimately more rewarded—then the buy-in will be absolute. Every sales rep wants to get better, and will look for every avenue to improve.

If reps see that sales ops want to help them succeed, they are far more likely to furnish them with the numbers they need to do their job. This will not only improve each of these individuals, but it will make the company and all the other members of the team better versions of themselves as well.

Andrew Tate
Andrew Tate is a UK-born, US-based writer. He spent 10 years working as a scientist in labs around the world and now specializes in using data to tell stories.
Recommended Posts
Showing 3 comments
  • Zombsio

    Very useful information for Salesmen. Thanks so much for this important knowledge!

  • Drawing

    Agree! current sales reps are only made better through data

  • Searl

    Nowadays, sport is very popular. And I really like that at schools and colleges are encouraged to play sports by creating teams for different kinds of sport and participating in competitions. But sportsmans also need to complete homework on time. Personally,https://an-essay.com always helps me, thanks to this service I have time for training.

Leave a Comment

Start typing and press Enter to search