Sales Operations

Recently, I took the responsibility for developing a sales-operations department. Naturally, I started with the question, “what, exactly, is ‘sales operations'”?

It turns out, there are quite a few people asking this question. The reason for that is as recently as a decade ago, there really wasn’t any such thing as sales operations. Over the course of the last decade, a few companies implemented sales-operations departments; and in the last two years, many companies have started to move in this direction. The reason is pretty straightforward. Sales operations has one goal, and one goal only: to accelerate revenue. And it does it by doing things that the sales and marketing departments are ill suited to do on their own. At a high level, there are three things that a sales op’s department must do:

  • Reduce non-selling activities in all channels
  • Implement the “science of sales”
  • Provide training and development for field talent

The first I should think is the most self-explanatory and clear, but just in case it isn’t: the sales team has one job — to sell. Anything that keeps your sales team from being in front of the prospective customer should ultimately be moved to sales operations. Don’t let your sales team waste its time on forecasting, proposal writing, quote-to-order operations, pricing, or anything other than actually selling.

The second is, depending on the size and stage of your company, arguably the most important; and is certainly the most common function of any sales operations team. This is also the point where additional skills are most obviously valuable. If you have even a medium sized sales team, then you’re undoubtedly carrying multiple products. If you have more than a handful of sales people — if you have enough to create a reasonable bell curve of performance (e.g., 20 or 30 sales people or channels) — then it’s time to start employing math. With a group that size, you undoubtedly have some superstars, some under performers, and a bunch of “regular” sales people. “Moving the middle” (i.e., getting your regular sales people to be even marginally more productive) can have a much bigger impact on your business than getting one of your superstars to add one more deal, or replacing one of your under performers with another superstar. The analytics of sales can lead to an optimized, more successful sales process; and can help make sure the right information is in the right place at the right time. More than anything else, a sales operations team needs a statistician or analyst.

Last, but certainly not least (and again, if you have more than a handful of sales people), providing training and development for your field talent is critical. Sales training has two initial, tactical goals: disseminating organizational knowledge (best practices); and reducing the ramp-up time for new sales’ team members. Is your European distributor selling 1.1x what your U.S. distributor is selling? Well, it’s the job of the analytics team to answer the question of “why” that is. But assuming it isn’t some uncorrectible market dynamic, ultimately, you’ll want to train your U.s. distributor to be that 10% better. That’s a huge contribution to your top-line growth, and can’t happen without sharing knowledge throughout your organization. Did you just hire a new account manager for the southwest? Of course the person you hired is an experienced, good sales rep, with active contacts in your industry. Nevertheless, it will take a while before he fully understands your products enough to sell them effectively. Depending on your industry, the difference between selling effectively in 1 month and selling effectively in 3 can easily mean millions of dollars. These two things combined easily suffice to justify a full-time training manager — and it’s an easy decision to move training from marketing (where it would historically sit in a well organized company) or sales (where it may sit in a smaller, less developed organization), into sales operations, where it naturally fits in even a small-to-mid sized company taking the step to create such an organization.

Given the above three priorities, my recommendation is that any sales-operations organization start with the following structure:

But of course, as with any organization, over time you’re going to want your sales-ops team to do more and more. So the question naturally arises, what else can or will they do? As I mentioned, there still aren’t many companies with stand-alone sales-operations organizations. But a survey of some of the larger companies that do have such organizations reveals the following:

In the above diagram, the dark blue lines represent activities which are the primary responsibility of the sales-operations team, and the light blue lines are activities where the sales-operations team provides a supporting function.

I don’t know that I, personally, would ever make, for example, customer support a primary responsibility of sales operations. But hopefully the one thing this chart makes obvious is that there are a lot of activities which don’t properly fit elsewhere in an organization, and which — in the interest of removing all non-selling activities from the sales team — should be removed from the sales team proper.

The last thought with which I’ll leave you is that, while I personally have become a big believer in the importance of sales operations, you will need to make it an integral part of your business if it’s going to be successful. I think that importance of importance is why 70% of sales operations teams are headed by a VP or higher level executive. If you do this part way; if the senior executives don’t buy into it, it will not be a success. Sales operations is still a new field, but if you look at the tasks in the above chart, I think it quickly becomes obvious how much time your organization is spending on non-core activities which are nevertheless important to its success.

Good luck, and good selling!
Chris

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Chris Richardson has strong opinions on just about everything. Just ask.