What Is Sales Operations And Why Is It So Important?

February 9, 2016 Richard Bayston

A group of individuals who all do what they like might bring in some killer deals, but while the top performers will be okay, the team as a whole will suffer. Without a concrete plan, most reps will fail to hit quota, and impulse will trump data in the decision-making process.

Now in walks sales operations, whose goal is to increase sales output by removing friction and replicating the knowledge and performance of the company's best sales reps.

CSO Insights’ Barry Trailer looks at the problem like this:

"Think of how people used to go to a bank and interact with a teller in order to cash a check. Now everyone uses an ATM because we've learned that transactions that are rapid, repetitive, and routine are at the bottom of the pyramid and don't need the human touch."

When sales ops look at the sales process, their aim is to address the big picture - to build structured processes that help the average rep succeed and drive growth and revenue. Sales ops staff take up the challenge of building sales processes that drive the whole sales department forward.

How?
 

Elevate The Average

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There’s Nothing Wrong With Your Team...

When you leave the very best performers to themselves, they’ll typically excel irrespective of their circumstances. On average, you’ll have about 20% in any given team who fit into this category. Then there’s usually about another 20% who are beyond rescue - they’re in the wrong role, and they’re just unsuited to what they’re trying to do, so no amount of guidance, support, education or incentives will get them up to numbers.

They should be managed out as quickly as possible, for their own good as much as anyone else’s. But in the middle of that bell curve is a huge hump of people who will do as well as their organization. If they’re backed by great organization they can blow expectations out of the water and perform indistinguishably from the top 20%-ers. How good are we at this? Well, 54% of sales reps won’t hit quota this year, so you tell me.

Chuck Schaeffer addresses the differing motivations of these groups: the middle 60% are often motivated by a desire to not be in the bottom 20%, rather than to make it into the top 20%. They’re okay with being average, and that’s unlikely to change. What sales ops can do is implement strategies that change what average means. That’s the job of sales ops from a sales team’s viewpoint: to elevate the average.

Qvidian’s report on the subject, ‘Moving the Middle,’ goes into more depth: while managers typically expect that they should concentrate on improving the performance of their high-flying top-20%-ers, even minor improvement in the middle bloc actually have bigger revenue impacts. Boost the middle 60%’s performance by just 5% and the difference in revenue is greater than the same performance boost in the top 20% of the sales force - by an eye-opening 91%.

So rather than wish everyone in sales could be like Julie who consistently crushes quota, doesn’t need her hand held, manages up when she has to - who ‘just gets it,’ in fact - managers need to accept: there’s nothing wrong with your team (probably, anyway). The problem is strategy: managers need to move that middle.
 

Generate Data-Based Strategy And Tactics

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Repeatability Is The Key

What kind of systems should we be using to move the middle? The keys are deal quality and repeatability. The typical split between high flyers and the middle block isn’t just that the top performers actually hit their quotas. It’s that they have the nerve to chase good deals, because they have confidence that they’ll be able to land them. That was the situation Datahug’s Ray Smith was in when he landed a series of six-figure deals with a tiny, geographically-dispersed crew.

‘A month later,’ Smith recalls, ‘we realized deals weren’t just going to keep falling in our lap. We hadn’t thought about repeatability.’

The middle block have different needs from the high flyers. They don’t have the kind of unshakeable self-confidence that lets sales reps at tiny start-ups dial McDonald's and expect to get a meeting. Their quota isn’t something they glimpse as it flashes by; it’s a bar they consistently struggle to make. And under pressure to generate more revenue, more sales, managers raise the bar - and raise it, until most sales staff can’t reach it.

Those that can are only hitting it by cheating themselves. They’re getting deals - but they’re not great deals. They’re offering discounts, they’re signing unsuitable customers, because in their heads, they’ve got to keep ahead of that ravenous quota that’s always nipping at their heels. That quota doesn’t measure deal quality, and it doesn’t reward the kinds of actions that lead to deal quality. In fact, if you think about it, it doesn’t reward actions… at all.

Don Otvos points out that startups often don’t have solid numbers to base quotas on - but more established forms are often flying nearly as blind. And even that doesn’t address the problem that rewarding or punishing people for things outside their control teaches them helplessness - and generates increasing anxiety and compulsion to chase the rewards. You want a sales rep, not a lab rat, right? Instead, says Otvos, ‘you want to tie as much of people’s compensation as you can to things like ‘meetings set’ or ‘demos given’ — actual activities.’

Rewarding sales staff for results is putting the cart before the horse. Instead, reward reps for things that are actually under their control, and build processes that mean if a rep gets X meetings, places Y calls and sends Z emails, they’ll probably make the right number of sales. This will need constant tweaking, but reps shouldn’t be left alone without structure or leadership to do it themselves. Because between half and four-fifths of them won’t manage it.
 

Spend More Time Selling

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The Average Sales Rep Spends A Minority Of Their Time Selling.

That’s crazy. Part of the process of providing reps with the knowledge and support they need to succeed is maximizing the amount of time in their working day that they’re spending doing their job. A sales rep is expensive; if they’re wasting their time, you’re wasting your money.

Sales operations should mean a managed, structured sales process where the majority of clerical work doesn’t fall on reps’ shoulders so they’re free to sell. The stats indicate that this is one of those bizarre areas in business where everyone agrees the ship is leaking, but no-one is working to plug the holes. Docurated’s study shows 84% of respondents agreeing that finding and sorting data from SDRs and marketing is the number one area where their organization could improve sales productivity. But… only 35% of them are working on fixing it.

As Price Burlingtion, director of field operations for SAP America, says:

‘People in sales often say, “When things calm down, I'm going to take a look at all that.” But they're so busy with the ongoing pressure of meeting quotas that they let the big-picture stuff drop.’

I believe this is a situation where ‘what’s everybody’s responsibility is nobody’s job’: there’s no-one specifically tasked with addressing those issues, so, again, the majority of folks just get overwhelmed by the urgent; the important gets left for tomorrow. We’re too busy bailing to plug the leak. Sales reps spend about 30% of their time creating or searching for content, and 20% doing CRM-related tasks. A fifth of the day spent bookkeeping?

The tools exist to slice away the vast majority of this fat and gristle in a rep’s day. No-one should be making manual entries into CRM; internal file sharing should be fast, simple, universal and searchable. Make that work and you’ve freed up 50% of the rep’s day. But budgetary concerns, the high-churn, high pressure nature of the sales working environment and paralysis by analysis in a crowded business IT/tech marketplace conspire to prevent appropriate tools being selected and implemented.

Enter sales ops. Because streamlining, focussing and supporting sales reps’ efforts to actually sell is sales ops’ job. The day to day of a sales op team is composed of selecting, evaluating and implementing strategies and technologies that plug the gaping productivity gaps in ad-hoc sales processes. As such, they’re part of a switch to facilitative managing: sales ops don’t deliver buzz words, team-building retreats or an extra layer of mid-managers between leadership and the trenches.

They deliver what reps want: more time spent selling.
 

Conclusion

The future belongs to sales organizations that can effectively leverage new technologies to increase efficiency and productivity. That’s what sales ops staff are there to do, and the increasing emphasis on program and structure might feel like they’re fencing in the open range to some sales pros, but for the company’s revenue, the stability of the sales force and the buyer’s experience, it’s a massive step forward.

Download our Sales Operations Playbook for more information on how Sales Ops can boost your sales team's performance.

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