Dec 04, 2014 By Joe Galvin

Sales Operations Needs to Step Up

Among other activities at Dreamforce '14, I joined a panel discussion, led by Salesforce Chief Adoption Officer Polly Sumner, on the subject of sales leadership and best practices for sales organizations. Some highlights from that dialogue are captured on video on Salesforce TV.

When we think about the field of sales performance improvement, it’s natural to want to focus on the skills of the individual sales professional; because no matter what else happens in the organization, revenue makes the world turn, and revenue depends on the salesperson’s ability to win business.

Of course, individual performance is not the whole story. Sales operations continues to grow in importance as a vital contributor to the ultimate success of the enterprise. Through the strategic framework of sales performance management, the operations role has evolved into an active participant in improving sales productivity.

In B2B solutions sales, buyer requirements are trending toward greater complexity and higher levels of customization. That means sales professionals need more expertise than ever, and they need more sophisticated support than ever. Sales operations now goes beyond its traditional responsibilities and combines financial, sales force automation and incentive compensation data to create a multidimensional analysis of sales performance. The result is a framework that enables the sales organization to measure, predict and influence sales performance:

1. Measure

Metrics for sales and margin contribution, sales performance, territory/product/customer revenue and other key data points are tracked, reported and analyzed. It’s a tactical mistake, though, to implement new measurement practices until stakeholders like the marketing and finance teams have agreed on exactly what the important metrics are.

2. Predict

Monthly and quarterly sales forecasts rely on data from the sales funnel, and accurate forecasts are one of the distinguishing characteristics of a world-class sales organization. As the sales ops function matures sales leaders should expect to see funnel integrity and forecast accuracy improving. And from a broader perspective, funnel integrity must be high before any benefits of predictive analysis will be achieved.

3. Influence

How and where should a salesperson spend their time? Territory assignments, compensation plans and quotas (for either named accounts or territories) influence the answer. Territory assignment determines where the salesperson will operate, the compensation plan determines how they will be paid and the quota establishes how much they will be paid. When these three factors are aligned and balanced with the overall sales strategy, they influence the salesperson to perform in accordance with company objectives.

Territory management is a subject worth highlighting in the context of sales performance management. It isn’t simply a matter of who sells where. An effective territory management system will:

Assign accounts to territories and maintain account ownership
Define and rank territory categories (e.g., districts, regions, vertical markets)
Reconfigure territories (typically at the beginning of the year)
Maintain territory master data and allow for modeling and analysis of customer segments

Joe Galvin leads the MHI Research Institute, formerly known as Miller Heiman Research Institute, as Chief Research Officer. (Miller Heiman has joined with four other companies to form MHI Global.) His mission is to continuously research, measure, and analyze the best practices, innovations, and emerging trends for complex B2B sales organizations to provide clients with the insights required to make strategic decisions.