Sales Operations: What They Do and Why They Matter

imtmphoto/iStock/GettyImages

Having a dedicated sales operations department is crucial to business success. As a startup or small business, you may not have a sales ops team. However, as your business grows, it's essential to allocate more resources to this function. With the rise of digital technology and big data, sales operations have become essential for any company looking to achieve sustainable growth.

TL;DR (Too Long; Didn't Read)

Sales operations include activities, processes and systems that ensure the efficiency and performance of your sales team. Their role is to streamline the sales process and drive business growth.

What Are Sales Operations?

Sales operations, or sales ops, encompass all business activities required for the smooth functioning of a sales organization. In general, large companies form sales ops departments that track sales activities and outcomes, analyze data and support operational effectiveness. They also process sales compensation, manage sales territories and perform data analysis, all to achieve process optimization and sales productivity. Sales managers work with other departments in the organization to establish strategic goals, identify risks and make data-driven decisions.

These business activities have the role of improving sales performance and decision making. Simply put, they bring a system to selling by providing strategic direction. At the same time, they reduce friction in the sales process, leading to higher revenue and productivity. Nearly 75% of high-performing companies have strong marketing and sales alignment, according to a survey by Aberdeen.

Sales operations departments have been around since the '70s, when Xerox formed a sales ops team to manage sales planning, forecasting and other critical sales functions. Data analytics tools, enterprise technology and other trends have contributed to the rise of sales operations. However, many companies, especially small businesses, find these processes challenging.

Perhaps the best way to understand the role of sales ops is to think of it as a team of engineers and architects who build a house. They make sure the foundation is strong and that all of the major systems are working properly. A sales ops team has similar responsibilities. It defines the stages of the sales process and builds the foundation of a successful sales system by using established methods, technologies and tools.

Sales Operations Activities

The CSO Insights 2018 Sales Operations Optimization Study has identified 16 sales operations functions that can be broken down into four main categories. Strategic planning support, the first category, includes customer analysis and reporting, compensation and territory modeling, channel definition and other activities.

The second category, sales performance analysis, encompasses data-driven operations and processes, such as forecast management and sales performance metrics. The information collected by sales ops teams is converted into insights and is communicated to the company's sales leaders.

Sales readiness, the third category, includes sales enablement, quote management and proposal management, encompassing activities related to product pricing, discounts, nonstandard deals and more. Technology management, the fourth category, includes sales activities that use marketing automation, customer relationship management and other key technologies.

Consider Your Business Needs

The extent to which organizations implement these practices varies from one business to another. Generally, sales ops departments handle both strategic and tactical activities.

Depending on the organization, they may be in charge of territory design, define buyer personas or help sales leaders develop appropriate compensation plans. A sales operations team may also implement systems and processes that allow for accurate forecasts, manage lead generation and help salespeople become more efficient.

All in all, sales ops departments have a broad range of responsibilities. According to the study, most organizations focus heavily on customer relationship management, sales forecasting and the management of sales tools and technologies.

Nearly 64% of the companies surveyed had a dedicated sales operations team. About 36% spread these activities across multiple teams, such as marketing, sales, IT and HR. Technology companies and those with at least $250 million in annual revenue are the most likely to have dedicated sales departments.

Sales Operations vs. Sales Enablement

Sales operations include a large variety of activities, including sales enablement. In some companies, these are separate functions. Both sales ops and sales enablement share a common goal: to make the sales team more productive and drive business growth. However, they use different sales tools and methodologies to achieve this objective.

Only 19% of the companies surveyed by CSO Insights had a dedicated sales enablement person or function, yet this activity is just as important as sales ops. After all, these are two sides of the same coin. Sales operations ensure the smooth functioning of your organization, while sales enablement assists with the creation of content for salespeople.

Enablement encompasses the activities aimed to improve marketing and sales force efficacy. Those holding this role provide training and content services to sales managers and their teams. Their role is to ensure that your sales team has access to the information it needs to get the job done. They work closely with the marketing department to create webinars, reports, product sheets and other relevant materials.

The content provided by a company's enablement team helps salespeople market their products and assist buyers. These resources enhance customer interaction while empowering sales ops teams to do their job better. In some organizations, this department is also responsible for sales onboarding and training, marketing and sales alignment, sales tools and more.

Role of Sales Operations

This function is more important than ever before due to two factors: the economic turndown and the rise of technology. In this digital era, sales teams are empowered by data and technology solutions. Companies use advanced analytics and automation tools to track the customer journey and deliver personalized experiences. Sales ops managers leverage the latest technology to collect data, turn it into insights and drive revenue growth.

Most organizations develop a sales ops team consisting of people with different backgrounds and skills. Sales operations analysts, for instance, are responsible for analyzing and processing data to generate deeper customer insight. Their role is strategic rather than tactical. Sales ops managers, on the other hand, are in charge of tactical planning, sales processes, pipeline management and more.

These professionals work together to ensure customer success and improve business performance. Their role is to optimize the sales process and increase efficiency. In many organizations, sales ops teams are also responsible for hiring and training sales reps, drafting contracts and following up on leads. Their responsibilities are evolving just as the sales industry is evolving.

As a small business, you may not have the budget and resources to create a dedicated sales ops team. However, you can hire or outsource key functions and invest in affordable sales automation tools. In fact, you might already be handling data management and customer relationship management, order tracking, lead generation, sales training and other sales ops activities. The next step is to structure and optimize these activities in alignment with your sales strategy.

Building a Sales Ops Team

There are several ways to structure a sales ops department depending on your budget and human capital. A large company, for example, may have dedicated teams for territory planning, business development, sales enablement and other key functions, with each team member specializing in a different role. This organizational structure, which is commonly referred to as the assembly line, may not be ideal for small businesses because it requires at least four team members.

The island sales team structure model, on the other hand, is easier to implement and manage within small organizations. Companies that choose this model have one ops manager who oversees the sales ops team. Each team member can wear multiple hats, from data analytics and territory design to customer relationship management. This way of structuring a sales ops team is widely used by real estate agencies, sales organizations and financial companies.

With this model, each team member can develop his own style and processes, leading to greater employee autonomy. The downside is that tracking sales metrics can become more difficult. On top of that, your employee may end up competing for promotion and recognition, which may create a toxic company culture and drive workplace conflicts.

A third option is the pod, which works similarly to the assembly line. Each team member plays a specific role, working as part of a small group within the sales ops team. A pod, or group, can be organized by product, territory and other criteria. This structure is increasingly popular in modern sales organizations and may lead to better communication within the team.

Invest in Technology

Sales operations can help you gain a better understanding of your target market, prospect more efficiently and increase revenue. The key is to set clear, measurable goals for your sales ops team and provide the tools they need to excel in their roles.

Automation tools, for example, help eliminate manual tasks and reduce human error, streamlining the sales process. These may include software programs like HubSpot, Pega Sales Automation, Prospect.io, Outreach and others.

In addition to sales automation software, your sales team may use online tools for task management, process mapping, analytics, reporting and project management. Advanced customer relationship management platforms, such as Freshsales, incorporate many of these tools and can increase sales force efficiency. Familiarize your sales team with these products and their features so they can use them to the fullest extent.

Sales Ops Best Practices

As a leader, it's your responsibility to define the mission of your sales team and establish common practices. Develop key metrics for sales operations, such as forecast accuracy, deal size, win rate, sales quote achievement rate, customer lifetime value and more.

The whole point is to define your processes and reporting practices, communicate them to your team members and ensure they know what's expected of them. Provide ongoing training and development opportunities to help your employees thrive in their roles.

Another aspect to consider is placing your customers first rather than trying to sell as many products or services as possible. In this digital age, consumers expect companies to know and address their current and future needs. Therefore, it's essential to make sure your sales operations revolve around the customer experience.

Leverage Cross-Functional Teams

Sales ops teams rely heavily on the insights they get from other departments, such as marketing, HR and sales enablement. As a leader, you can invest in communication tools and hold regular meetings to get them working together more efficiently. Team-building activities may help too.

Leveraging cross-functional teams can improve workflow processes and employee communication by bringing together people with different skill sets. This approach enables quicker decision making and healthy competition. Furthermore, it makes it easier for your team members to determine what works and what doesn't, to brainstorm ideas and to find solutions, all from different perspectives.

The key to successful cross-functional collaboration is to ensure that both teams are on the same page. Marketing and sales ops departments, for example, should fully understand the current objectives, roles, limitations and expectations of each team. This will help prevent friction between teams and maximize productivity.

References

Resources

About the Author

Andra Picincu is a digital marketing consultant with over 10 years of experience. She works closely with small businesses and large organizations alike to help them grow and increase brand awareness. She holds a BA in Marketing and International Business and a BA in Psychology. Over the past decade, she has turned her passion for marketing and writing into a successful business with an international audience. Current and former clients include The HOTH, Bisnode Sverige, Nutracelle, CLICK - The Coffee Lover's Protein Drink, InstaCuppa, Marketgoo, GoHarvey, Internet Brands, and more. In her daily life, Ms. Picincu provides digital marketing consulting and copywriting services. Her goal is to help businesses understand and reach their target audience in new, creative ways.