Sales operations may not be terribly sexy. But it is terribly important.
While may not be considered the most glamorous aspect of sales management, but as business and technology have evolved, it’s widely acknowledged that getting sales operations right is imperative for a smoothly run, effective sales organisation. On his Chairman of the Institute of Sales Professionals, Andy Hough, recently described it as “...without doubt the most important and unsung hero for sales teams.”
“Sales operations needs to understand the heartbeat and rhythm of the company.”
Operations is the hub of sales organisation efficiency. It’s responsible for how activities and outcomes are tracked, and how information is communicated to management for decision making—all with the goal of maximising productivity.
That’s why sales op's is one of the most critical drivers of risk and performance when it comes to revenue creation and why it features so prominently in Telemetry's sales analytics. When we analyse a sales organisation’s operational effectiveness, there are six core foundational capabilities we always focus on.
The six cornerstones of effective sales operations
1. Data Quality
A clean and updated database is essential to sales success. At organizations of all sizes, sellers call names in the database that aren’t there, sellers don’t update their accounts and pipelines, and leads don’t get routed to sellers. A database can either enable selling success, or cripple it.
2. Analytics & Reporting
Most leaders want to know where success is happening, where failures are likely to crop up, and where the opportunities are to drive success. The foundation of a clean database starts this process. Analytics and reporting—the ability to make sense of it all—fuel decision making.
Eighty two percent of sales people at Tier 1 organisations and 56% of those at Tier 2's agree that their dashboards and reports help analyse sales situations, actions, and results effectively, compared to an average of only 34% across Tiers 3, 4 and 5.
3. Budgeting & Forecasting
Many businesses succeed or fail based on their outlook for sales in the next quarter or two. Without good forecasting, a business can either spend too much and lose margin, or spend too little and miss out on sales opportunities. Getting a handle on forecasting is not easy, but it is absolutely essential.
4. Pricing & Offer Support
Time kills sales. Buyers get fired or reassigned, leave their jobs, bring in competitors, and more. And then there’s the Law of Diminishing Intent: the longer someone waits to do something, the less likely they are to do it.
The faster sellers get help with pricing and proposals for important sales, the more sales they make. At Tier 1 companies, 75% of sellers adhere to established pricing guidelines, while only 56% at Tier 4 and 32% of Tier 5 do. Pricing and proposal support needs to be fast, accurate, helpful, and designed to cater to the most important sales first.
5. Quota Management
How high should you set quotas for various groups? It’s a question that many sales leaders grapple with. Quota-setting affects seller action planning, compensation expectations, turnover, motivation, and a host of other critical selling behaviours. It's one of those things that most organisations simply take for granted; set the target - press go. Yet so many sales organisations get it wrong, because they don't view it as an ongoing operational necessity.
6. Accountability & Responsibility
Perhaps one of the most common ailments of under-performing sales organizations is a lack of accountability. Tier 1 and 2 sales organisations are far more likely to address under-performance issues (73% and 56% respectively), while those at the other end of the spectrum are much less likely (average 31%).
Letting under-performers linger too long reduces revenue, increases costs, and drags down margins - and morale. It can have a huge negative impact on culture. This is an area where gains in effectiveness improve both revenue and culture. With less than 20% of Tier 1 and Tier 2 companies succeeding in this area, the potential for improvement is obvious.