Sales Operations: The Ultimate Guide to Making it a Success
If you ask ten sales leaders to define what sales operations is and does, what answers would you get? You’ll likely receive ten very different answers.
Some may say sales operations are a function that handles forecasting and reporting. Other sales leaders may say they are a strategic function who manage the entire sales system.
We aim to clear up much of this confusion in this guide. Discover what sales operations is, the benefits, and how to make it a success so your sales function flies.
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Table of Contents:
- What is Sales Operations?
- Core Functions of a Sales Operations Team
- CRM Adoption and a Formalized Sales Process
- A Career in Sales Operations
What is Sales Operations?
The 1970s is famous for the releases of such movie classics as ‘Jaws’, ‘The Godfather’, and ‘Star Wars’. But it was also when the term ‘Sales operations’ first emerged.
Xerox established a sales operations group nearly fifty years ago. It was responsible for managing sales planning, compensation, forecasting and territory design. The group was set up to take on “all the nasty number things that you don’t want to do, but need to do to make a great sales force”. These were the words of the group leader J. Patrick Kelly.
Since then, the importance of sales operations has rocketed. The function now makes or breaks sales teams within businesses big and small.
A Modern Definition
Fast forward to 2019, and how sales operations is defined has come a long way. CSO Insights provides this up-to-date definition:
“A strategic function designed to provide a platform for sales productivity and performance by providing integrated methods, processes, tools, technologies and analytics for the entire sales force and senior executives.”
The focus of sales operations is designing and operating the sales system itself. Through training, technology, and engagement techniques, they provide a strategic framework for selling. This is the foundation that the sales force at large depends on to be both effective and productive.
Alex Rynne describes the relationship between sales and sales operations in a great way.
She proposes thinking of sales professionals as a team of thoroughbred racehorses. Though they may be powerful and experienced, their ability and efficiency to perform will be limited without the guidance of a jockey aka the sales operations manager.
Once sales ops has created the foundation to support a more productive sales function, what next? Who then picks up the mantle?
Enter sales enablement.
Sales Operations vs Sales Enablement
Forrester defines sales enablement as:
“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.”
In a nutshell, sales enablement is a lot more than sales training. Sales enablement teams equip all salespeople, and their managers, with effective enablement services.
Top sales enablement blogger, Ben Cotton highlights that 59.2% of companies now have a dedicated sales enablement function (up from 32.7%). While 8.5% of companies have plans to create one in the coming year. These stats show that more businesses are realizing that the function is no longer a ‘nice to have’. Rather, it is as a ‘must’ for driving revenue.
Sales Enablement Services
The sales enablement team is likely to be more involved in the earlier stages of selling. Services provided by them can include:
These services aim to increase the value of salespeople in all customer interactions. They equip them with the tools and information needed to guide the buyer through the process. This means that their focus is really on the buyer rather than the salesperson.
Collaboration vs Conflict
In recent years, many companies built sales enablement teams to assist sales operations. Both teams function to increase the productivity of sales and drive profit increase.
Though there is some overlap between the two functions, it is likely that sales operations and sales enablement will continue to specialize in their services. This is often the case with emerging roles.
Considering the similarity in purpose, the responsibilities of each team must be clear. It is crucial they align and understand the importance of working together. This ensures there is no disconnect between sales method and sales process. Key technologies should be adopted as expected.
To help this collaboration, an alignment framework is useful. Mindtickle provides the below:
Sales operations is typically involved in creating the strategic framework, forecasting and analysis. They also own and manage sales automation processes that underpin sales efficiencies.
Common tasks of each function
- Assign accounts and plan sales territories
- Manage contracts & proposals
- Determine sales incentives and compensation
- Manage sales systems and data e.g. the CRM
- Own sales reporting and forecasting
- Provide sales training on products and processes
- Report on sales performance data
- Communicate with the sales staff directly
- Use tools and analyze data to help engage customers
What are the Benefits of Sales Operations?
Though often under-appreciated, a successful sales operations department provides many benefits.
Companies are able to forecast future revenue by managing the sales pipeline. This allows them to stay on track to meet their company goals. When sales operations is not in place to analyze the data coming from the pipeline, companies often struggle to forecast revenue accurately. Accurate forecasting allows companies to dispatch resources where they are most needed.
Sales ops manages the data coming from your sales pipeline. This means you can better plan for the future by providing an accurate forecast.
Faster company growth
Companies with a formal sales process generate more revenue. Those that spend at least three hours a month analyzing sales rep pipelines, grow 11% more than those that don’t. This shows that pipeline management is a large component of revenue growth. It is a key responsibility of sales ops.
As mentioned earlier, sales operations assist in revenue forecasting so sales leaders can divide resources where they are most needed.
However, the data analyzed by them covers much more than just forecasting. It includes metrics about all aspects of the sales team, funnel and sales reps’ individual performance. Having this data available enables leadership to make more data-driven decisions. This would be a near impossible if sales operations wasn’t in place.
Formal sales processes
Sales operations provide detailed metrics and reporting for sales managers. They check to make sure sales reps are populating required data fields and are following up with qualified leads at the appropriate times.
Ultimately, they ensure sales reps are accountable and follow a formal sales process. That is something we discuss a little further down.
By helping reps follow a formalized sales process, sales operations makes it easier to scale the sales team. This is particularly important during company growth, when the company must adjust its’ processes to aid that growth.
Sales operations helps manage and define sales territories. This involves adjusting territory mapping to account for customer base growth and new sales reps.
Finally, sales ops administers systems that are used for managing sales data. This results in healthier data as the company expands.
Cultivating new talent
Sales operations need to understand every aspect of the roles that sales plays in the customer journey. They often influence or are involved in hiring these roles. This arms them with valuable insight into the entire sales process. This inevitably makes them “sales process experts”, which is particularly useful when it comes to training or hiring new salespeople.
Sales operations is often drafted in to help combat the high turnover trend that is often synonymous with sales. Typically, they will:
- Vet applicants for roles
- Put together an effective onboarding program
- Train new talent on a company’s various sales processes
- Educate on new hires on your specific market
Key Metrics for Sales Operations
Data matters a lot in the world of sales operations. In fact, data handling can often be their sole focus in organizations with a lesser developed function.
As data in a sales organization is typically owned by sales operations, they are often inundated with requests to produce ad-hoc reports.
To avoid becoming a purely reactive function, it’s important that they clearly define which data matters and who in the organization it matters to.
Some of the metrics they track relate to the sales process, sales pipeline and some financial data.
Sales operations must take ownership of the sales process to operate from a proactive instead of reactive position.
The following metrics are useful for measuring the existing sales process and identifying any frictions or inefficiencies that can be improved upon.
- Sales stages used – this tracks the sales stages used during an opportunity. By monitoring which stages are being used by reps and which aren’t, sales operations can change the sales process to reduce any friction.
- Lead response time – this tracks the time it takes for your sales team to respond to leads passed on by marketing. Ideally, leads should be responded to as quickly as possible.
- Time spent selling – this tracks the amount of time your reps’ spend selling,. This is measured against time spent on administrative tasks or attending internal meetings. Keeping track of this allow sales operations to put in place processes that can increase sales time and decrease overhead time.
- Amount accuracy – this measures how accurately your sales reps estimate the value amount of your opportunities.
- Number of open opportunities – this represents all the active deals that your sales team currently has a chance of closing
- Win rate – This represents how many opportunities convert into a won deal. It should be tracked by both the number amount and the value amount.
- Pipeline forecast – This is the expected value of the entire sales pipeline. It should be made each quarter but updated at least once a week.
- Average Won Amount – Represents the average monetary value of all won opportunities. Combining this with the win rate and open opportunities metrics allows you to determine the gross pipeline value.
- Lifetime Value – This metric represents the total value of a customer over time
- Customer Acquisition Cost – This is the total cost of acquiring a new customer. It includes the cost of the sales and marketing, as well as any additional overhead.
- Customer Churn Rate – this metric tells you how many customers of those that initially buy your service decide to renew.
What are the Common Pitfalls to Avoid
So far, we’ve looked at how beneficial sales operations can be for sales and the wider organization.
But, there are some common pitfalls that sales operations leaders should be aware of and try to avoid:
Losing sight of the day-to-day
For many sales ops pros, the thought of spending even more time with the sales reps may be a step too far, but it is necessary. Working more closely with sales opens the door to join up more strategically to achieve business goals.
On the surface it may seem wise to have lots of fields on forms and report. The more information the better right? Not always. Especially if some will never get filled in or have no benefit to the business. So why hang on to them? Delete and save your energy.
Staying in your comfort zone
Take some time talk to colleagues in a completely different department. Why? It provides the opportunity to uncover challenges they may be experiencing and allows sales operations a way to help resolve them.
Saying ‘no’ to change
Change needs to be embraced. Especially if that change comes in the shape of new tools and technologies that help automate processes and increase efficiencies.
Core Functions of a Sales Operations Team
Sales continues to evolve. What once was an art form based on charisma, intuition and instinct is slowly becoming a science. Something that can be objectively measured, analyzed and replicated. As this evolution unfolds, the role of sales operations expands, alongside new strategic and tactical activities becoming integrated into the function.
You could therefore say that almost any part of sales that includes a technology, a process or data should concern sales operations.
For simplicity, sales operations’ activities can be categorized into the following groups:
- Assisting Strategic Planning
- Analysing Sales Performance
- Sales Readiness/Sales Cycle Assistance
- Technology Management
- Resource Allocation
Strategic Planning Assistance
Sales leaders regularly take time to convert their organisation’s go-to-market strategy into sales initiatives. This normally happens in readiness for the beginning of the fiscal year.
Leaders decide approaches to territory assigning, target markets and channel coverage. Sales operations is often an essential planning collaborator in these discussions. This is because they are able to collect data, build models for testing and collate the necessary details to form the strategy.
Sales operations support strategic planning in many ways:
Customer Analysis and Reporting
Sales operations helps sales and marketing by adding markers to target customer segments. They can also determine the markers for optimal customer profiles. This tells the organization which customers prospecting efforts should focus on.
Defining the Sales Organization Structure
Sales operations can help answer a lot of the hypothetical questions leaders may have when it comes to organizational design.
Modeling: Sales Compensation
Modeling compensation strategies to determine the potential consequences of changes is a key way sales operations assists sales leaders. They suggest alternative options to adopt for optimal results. It is also often likely to be the team administering the plan.
Sales operations can create models to represent the impact of decisions involving territory design. Following this, the function is often responsible for territory balancing, account allocation and the administration of the territory management system.
Determining the way channels might play a role in the sales distribution model is another area Sales Operations is involved in. They also regulate how a combination of channel and direct sellers can provide sufficient coverage without creating needless channel conflict.
Analyzing Sales Performance
The following are areas where sales operations creates and manages data collection processes. They also support leaders in the implementation of sales strategies via data analysis.
Forecast Management and Pipeline Management
It is common for sales operations to own the systems, processes and tools for creating refined forecasts. Senior executives and stakeholders will use these. They are also responsible for working with sales leadership to make sure the forecast is accurate.
The metrics for seller performance are normally found in an array of sales systems. Sales operations uses these systems to build dashboards and reports. These give leaders much needed visibility into team and individual seller performance metrics. This allows leaders, managers and salespeople to make informed decisions for improving results.
Defining The Sales Process
Sales operations is in charge of creating a dynamic sales process. It considers the buying processes of targeted customers. These are then aligned with delineated and honed selling processes.
It is essential that analytics is used to regularly refine this process. The organization must commit to continually training and emphasizing this process. This is so it becomes second nature where selling is concerned.
Communicating With Leadership
Sales leaders depend on insights provided by sales operations. These insights help make data-driven decisions that help to execute the sales plan. Sales operations must also communicate these insights to the leaders regularly.
Sales Readiness / Sales Cycle Assistance
The below are some of the tasks that sales operations assist sellers in to move opportunities through the funnel effectively and efficiently.
Deal Desk Management
Deal desks can help with a number of deal components whether that is pricing and deciding discount amounts or calibrating solutions and moving deals through contracting processes.
Sales operations is responsible for defining the characteristics of candidate deals which can include value, strategic importance and complexity and defining the required inputs and results from the deal desk.
In CSO Insights 2017 ‘World Class Sales Practices’, 70% of sales leaders indicated that the rate of change in “competitive activity” and “customer expectations” was accelerating significantly or noticeably.
In response to these concerns, sales leaders are looking to gain competitive advantage.
This has resulted in an explosion of sales productivity tools. These tend to use modern capabilities like predictive analytics and artificial intelligence. Businesses won’t blindly adopt these emerging technologies however. Instead, they rely on sales operations to decide which to use. and which will have the most impact.
They assess how the sales process can better complement the customer’s buying journey, or how to increase the productivity of the sales team.
Sales operations is responsible for managing technologies used by the sales team. These include virtual coaching tools, sales enablement content management tools and lead scoring tools to name a few. The data held within these systems and the integration between them is also part of their remit. When the sales organization wants to use technology specifically for sales, sales operations must be the first point of contact.
The activities in technology management that sales ops commonly lead include:
Defining and Updating the CRM
Ownership of the CRM normally belongs to sales operations. They decide when to update the CRM and how to maintain the data within it.
They also typically own the creation and management of the sales technology stack. As CRM adoption and productivity improvements from the CRM remain an issue for many sales team, this role in particular is a difficult one.
Managing Marketing Automation
Many businesses struggle with aligning sales and marketing. Creating a formal process that allows both departments to jointly nurture leads can be a challenge.
Sales operations defines marketing automation management. They oversee the lead flow processes that need to be in place between the CRM and the marketing automation system.
CRM Adoption and a Formal Sales Process
Inadequacies in systems and processes, rather than problems with personnel, often cause failure. Salespeople must have access to robust systems, sound processes and trustworthy data to excel in their roles. This is another area where sales operations comes into play.
There are a variety of tools that sales operations use to support salespeople.
One such tool is the much heralded CRM – one of the most popular sales tools today. It is almost unheard of for any sales team to not be using one to manage their sales funnel. It also manage such sales components as contacts, accounts and opportunities.
The Adoption Struggle
Despite its prevalence many companies struggle to successfully adopt the CRM post implementation. A 2018 study by the Alexander Group revealed that less than half of sales organizations boast a CRM adoption rate of more than the ideal 90%.
It is important to note however, that CRM adoption should not be the sole goal of sales operations. Why? Because researchers have still found a significant difference in the win and quota attainment rates when looking at different companies that all have a high CRM adoption rate. This difference can be attributed to having a formal sales process.
The numbers speak for themselves. According to research by the Sales Management Association, 90% of all companies using a formal, guided sales process are high performing. They typically enjoy a win and quota attainment rate of over 20% more than companies with informal sales processes.
One major issue with CRM adoption lies in the fact that most sales organizations have little confidence in the quality of the data in their CRMs.
Sales operations can offset this by using other tools to augment the flow of data into the CRM thus ensuring the accuracy of the information found in the CRM.
It’s important to remember that the CRM is just the foundation of the sales’ technology stack. And sales operations must build on it in order for the sales organization to successfully measure and improve sales performance.
Creating a formal sales process
Now how to actually create a formal sales process.
But first, some more stats to hammer home the importance of a formal sales process:
Your sales team’s win rate can increase by 24%, decrease your sales cycle length by 20% and raise your average sale price by 15%.
So clearly, it is not something that should be ignored.
Organizations need a way to replicate the approach of their top performing salespeople who meet sales quotas, close deals and bring in revenue – consistently. That’s what a sales process is.
Adopting a sales process in your organization equips sales representatives with the knowledge of what actions to take, the approach to take them with and the timing of it all during a sale. Basically, a good sales process helps sales reps take the most effective path of a sales cycle.
In addition, you can accurately track and measure sales performance and deal progression. This greatly benefits the sales managers.
Quick summary of the benefits of a sales process:
For the sales rep:
- Shortened length of the sales cycle
- Increased wins
- Increased productivity
- More leads obtained
- Higher percentage of met quotas achieved
- Customer interactions standardized
For sales management:
- Improved alignment with marketing
- Increased win size
- Better forecast accuracy
- More deals in the pipeline
- Greater visibility of the sales pipeline
- Able to scale successful revenue generation practices
But where to start when trying to put together a sales process?
Building a sales process comprises of three steps:
- Information gathering and design
Information gathering and design
Your first step in building a sales process should be to observe your sales reps.
Take a look at the last 10 deals that closed and try to identify the major steps that took place during the process.
Ask yourself the following questions:
- What touch points occurred with the customer?
- How long did the whole process take from prospecting through to close?
- How much time did each step take?
Once you identify the average steps and timeframe, you can successfully build a selling timeline that salespeople can expect to go through.
The more examples you can gather from the more people on your team, the better your timeline will be.
Consider the following.
If you’ve looked at 10 deals and 8 of them closed in around 5 weeks, then you can take a closer look to see which steps were shared across all 8 closed deals.
Taking an average of the steps could look something like this:
- Warm emails x 3
- Prospecting calls x 2
- Discovery call x 1
- Phone call x 1
- Demo given x 1
- Follow-ups x 4
- A week of deliberation before contract signing
Once you’ve grasped your current sales cycle, look for any patterns. Try to identify the more subtle driving forces or pain points that propelled each deal to closing.
- How did the sales reps leverage a pain point to sell the customer on the necessity of the product?
- How did prospects find your product?
Answering these questions should give you an idea of how to structure the sales process.
Defining your sales process
When defining the stages of your sales process, remember that each stage should be distinct.
There are five common stages:
Prospecting is the start. It is part of a rep’s normal workflow and involves sourcing early stage leads. These leads should match your buyer persona.
A buyer persona is a fictitious portrayal of your ideal customer who is experiencing problems that can be solved with your product. You should identify a unique set of pain points for each persona and determine how to solve them.
Prospecting can occur at industry events, conferences or online using sites like LinkedIn. Sales reps can also prospect by simply asking their network of associates, colleagues and clients for referrals.
At this stage, the salesperson will start contact with an early stage lead. Their aim is to learn more about them and assess their “fit” before moving forward.
There are many different types of qualifying techniques. These include MEDDIC, CHAMP, GPCT and more. The most common framework used by businesses is BANT, which stands for:
- Budget – What is the prospect’s budget?
- Authority – Does the prospect a decision-maker or influencer?
- Need – What need does the prospect have?
- Time – In what timeframe is the prospect looking to implement the solution?
Qualifying typically occurs using a “discovery” call where the salesperson can learn about the prospects pain points and business targets.
This involves learning more about the prospect and the prospect’s company. The sales rep may speak with other people from different departments of the prospect’s company to gain a better understanding of their business goals. Researching allows the rep to provide a more customized experience for the prospect, which increases the likelihood of closing a deal.
This is a time-consuming stage of the sales process. Typically, the service on offer is formally presented to well-qualified prospects only because it is often a resource-heavy task.
The demonstration should focus on the pain points and use case of the prospect. It’s not uncommon for engineers or executives to also attend the meeting. This allows the prospect to experience the service level that they can expect and have more technical questions answered.
This stage includes the late-stage activities that normally take place as a deal approaches it’s close. These activities can vary widely depending on your company, but can involve:
- Delivering a proposal
- Gaining buy-in of other stakeholders
Every sales rep works towards the closing stage. This involves a contract agreement that benefits both the prospect and the seller.
After closing, the representative receives a commission on the negotiated price. The Customer Success team or an Account Manager then manages the account going forward.
After a sales process is defined and implemented, by no means is the work complete.
As your business grows, or circumstances change, the sales process should be modified. Sales operations should be constantly analyzing it and seeing how it can be improved.
Bottlenecks are common in sales processes. Eliminating them is one of the easiest ways to improve the performance of the sales team
Technology for Sales Operations
Over the last few years, there has been a large amount of innovation in sales technology.
Below are the five main areas that the different types of sales tools fall under:
- Lead generation and conversion
- Activity and sales process management
- Content for sales enablement and training
- Seller productivity/efficiency
- General operations
Multiple platforms can easily overwhelm salespeople with their complexity.
Oftentimes what is initially intended as a solution can easily turn into a problem on the sales floor. This is why sales operations is needed. It manages the sales tech stack which allows sales reps to focus solely on selling.
- Integrating apps and tools
- Overseeing the adoption and customization of the CRM
- Guiding communications
- Managing data and reporting
- Automating tasks
According to Salesforce, sales teams only spend 34% of their time selling. On average, a salesperson uses 25% of their time on non-selling administrative tasks. Sales operations combat this inefficiency using their greatest weapon: automation.
Your CRM should be a complete record of customer activity in your organization. But often the data is incomplete and unreliable. This is one of the major reasons that companies struggle with CRM adoption.
This leads to sales reps having to spend hours manually entering information on deals, customers and sales activities. This in turn takes valuable time away from their most important role: selling.
FunnelFox automates CRM data entry to drastically decrease the time sales reps spend in the CRM. The quality of the CRM data also increases greatly. It’s a win-win scenario.
Also, lead enrichment tools can eliminate the need for salespeople to manually research leads by auto-populating lead profiles with relevant information.
Scheduling a meeting with a lead normally requires sending multiple emails back and forth. This often means discussing different time slots until a suitable one is agreed upon.
This hassle can be erased completely by implementing a tool like Calendly. It allows you to forward a link to your calendar and show your available time slots. The lead can then choose a suitable time slot. This results in a calendar invite being sent to both parties.
Follow up tasks
- Only 2% of sales happen at first contact
- 80% of sales are made on the fifth to twelfth contact
- Only 10% of sales professionals follow up with leads more than three times
As the above shows, most sales professionals are missing out on most sales opportunities by not following-up.
Tools, like FunnelFox, can automate this process. They free sales reps from having to keep track of which clients they need to follow up with. Reminders are automatically created as to-do tasks in Salesforce. They are marked as complete once a rep has contacted the client in question.
A career in Sales Operations
Working in sales operations typically requires a mix of strategic and operational skills.
Strategy requires a ‘big picture’ approach as it involves considering long-term goals, high-level process design and team size. This means skills in design, analysis and problem solving are essential, alongside project management experience.
However, operations needs a more detail-orientated approach.
Strategic tasks need the approximate parameters of sales operations to be defined. But, operational experience executes the details.
Here are some of the different types of Sales Operations roles:
Sales Operations Representative
This is an entry-level sales operations position. This role requires 0-2 years of professional experiences and the rep should have great attention to detail, a good technical aptitude, excellent communication skills and be familiar with sales and marketing automation.
Sales Operations Analyst
This role requires 3 years in a sales operations role as a minimum.
Working cross-functionally across marketing, product, analytics, engineering etc is to be expected.
A sales operations analyst must have experience in data mining, data modeling and data quality management. This means a proactive approach and problem-solving skills are required. Though not necessary, knowledge of business intelligence tools and Excel is also extremely useful.
Senior Sales Operations Analyst
This role requires over 4 years experience in a sales operations position.
A senior sales operations analyst needs to be familiar with CRMs, data modeling, business intelligence platforms and Excel. As they will likely work with sales executives, good interpersonal skills are needed.
Sales Operations Manager
This role normally requires 5 years experience. Their primary responsibility is to supervise the sales operations specialists. This means sales ops knowledge and experience in leadership is ideal.
They should be familiar with sales methodologies, the impetus behind sales behaviour and how sales processes function. It is important for the sales operations manager to be able to model and analyze data.
VP of Sales Operations (or Senior Director of Sales Operations)
This role requires 10 years sales operations experience, including a number of successful leadership roles. The VP of sales operations will manage a team and work closely with senior leadership.
A technical Masters degree or MBA is usually required. Familiarity with CRMs and sales automation tools is a must.
The VP must be able to create complex financial and operational models using database software and spreadsheets. This means exceptional presentation and communication skills are needed.
You can find Sales Operations job listings near you here.
The sales operations function initially emerged as a way to introduce science and best practice into sales. It has now become an intrinsic part of the sales organization.
Sales ops roles and responsibilities vary greatly across different businesses. Many companies have some form of a sales operations function. As it continues to grow, it will have a much larger and more sustainable impact on sales performance outside of CRM management.
Are you in sales operations and looking for one solution to cover most of your team’s data needs? Give FunnelFox a try!
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Related articles of interest include:
- How to be a Successful Sales Operations Manager
- 5 Steps to Supercharge Your Sales Operations Career Path
- The Role of Sales Operations in a Productive Sales Team
- How to Scale Sales With Sales Operations