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Sales Compensation Focus

Sales Operations: Revenue Driver or Dumping Ground?
By Mark Donnolo and Collette Parker, SalesGlobe

Sales operations is the most consistently inconsistent function in sales. Approaches to sales operations can differ dramatically across companies and between business-to-business and business-to-consumer companies. Often cobbled together rather than built by design, sales operations can become the dumping ground for any task that sits outside of core selling roles. For companies that step into this trap, sales operations falls short of enabling true sales productivity.

Sales operations usually comes into play in midsized to large companies, rather than very small companies, as the sales organization becomes more sophisticated and can no longer handle a range of nonselling and sales support activities (e.g., customer support and territory planning). In high-performing companies, sales operations is a critical function. It enables sales to generate profitable growth and support the sales strategy. When sales operations is well-designed it helps decontaminate sales roles to maximize their sales time while keeping its own functions pure, with bias toward high return-on-investment projects rather than administrative tasks.

Sales Operations Focus
Sales operations usually leads one set of roles and supports other departments such as marketing, human resources and finance. Of the top 12 lead roles and top 12 support roles, the top combined lead and support roles include some key sales productivity levers: performance analytics, sales process definition, customer relationship management (CRM) development, sales tool design and sales compensation design, according to the “Structuring Sales Operations Survey” conducted in 2012 by the authors’ company.

Top Sales Operations Roles Lead Role Support Role
Performance Analytics 76% 37% (dual role)
Sales Process Definition 76% 24%
CRM Development 71% 27%
Sales Tool Design 64% 27%
Sales Compensation Design 55% 37%

These sales productivity levers come into play when the company maximizes focus on the ones that will provide the greatest return for the business and reduces focus on the perfunctory roles that can drain resources.

5 Imperatives for Successful Sales Operations
While the sales organizations in the “Structuring Sales Operations Survey” range from 100 to 5,000 sales reps, sales operations in most companies (79%) have fewer than 50 people on staff, with some at more than 200. There is surprisingly little correlation between sales organization headcount and sales operations headcount. Rather than simply adding staff, the highest productivity sales operations do the following:

  1. Determine the mission of sales operations: While it’s tempting to ask sales operations to handle practically anything that comes along, its true purpose is to enable the productivity of the sales team. Set a clear mission for sales operations and position it in a way that reflects its importance to the company.

  2. Define roles that align with the mission: Sales operations roles should flow from the mission of the company and should define not only what sales operations will do but also what it will not do. Whether you’re improving how sales operations works or building your sales operations team, prioritize the roles and projects that have a well-defined revenue or profit impact. To potentially save years of trial and error, consider partnering to outsource areas that require specific expertise for ongoing support while your team builds its capabilities.

  3. Build a center of excellence close to the field: Sales operations needs to respond to the customer and the sales organization. Housing the team just at the home office can separate it from the needs of the company. Creating a center of excellence that is connected to sales leadership but also operates in the field can help the sales operations team concentrate its knowledge base while being responsive at the front line.

  4. Manage to the metrics and publicize success: Ill-defined measures of success can leave the performance of sales operations subject to the interpretations of the company. Set measurable objectives for sales operations and develop a dashboard that can be tracked on a regular basis. Publicize sales operations successes broadly to the company to support its mission and value to the business.

  5. Invest in sales operations: Sales and sales operations work as a team. If the sales organization plays the quarterback, running backs and receivers, then sales operations plays the offensive line that enables the sales stars to perform. Many would-be all-star sales organizations have been weakened by a lack of investment in the supporting blocking and tackling. Know what you expect from sales operations, and make the investment to get it.

Case Study: Creating a Respected Sales Operations Team
The authors recently worked with a telecommunications company that had placed sales operations under the finance department where, unfortunately, it became too much of a reporting function. The sales operations people spent their time analyzing and measuring sales activities, rather than helping sales be productive day-to-day.

The company put sales operations back under sales, and established a mission for sales operations: to drive productivity of the sales organization. It also determined the most important functions for sales operations, including compensation design and quota setting; territory and market planning; CRM and sales tool development; and reporting and forecasting. The company decided what sales operations would do and what it would not do, in order to prevent it from becoming a dumping ground. And, because sales operations under finance had been a backwater division tucked away in a corner, the company created new career paths and worked hard to attract top talent to sales operations. It then created a system of rewards and recognition for the hard-working people in sales operations, who had previously shouldered the burden without being recognized.

Almost a year after beginning the restructuring, the company had created a highly regarded sales operations team.

Conclusion
As you build or enhance sales operations at your company, understand your performance and challenges, determine your mission and focus areas, and establish a clear set of metrics to celebrate success. Remember that sales operations can be your strongest partner in helping sales grow the business. 


About the Authors

Mark Donnolo is managing partner with SalesGlobe in Atlanta and author of “What Your CEO Needs to Know about Sales Compensation,” to be published in January 2013. He can be reached at mdonnolo@salesglobe.com.

Collette Parker is director of content and communications with SalesGlobe in Atlanta. She can be reached at cparker@salesglobe.com.


Read the July 2012 edition of Sales Compensation Focus.

Contents © 2012 WorldatWork. No part of this article may be reproduced, excerpted or redistributed in any form without express written permission from WorldatWork.


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