Sales Operations Overview

Sales Operations is a vital function within a company that supports the sales team, optimizes sales processes, and is often the main driver of your CRM. Through streamlined operations, the analysis of performance metrics, and the valuable insights they share, Sales Operations plays a crucial role to help drive revenue growth and improve the effectiveness of the sales organization.

Let’s take a look at the specific tasks that Sales Operations handles, and how it relates to your CRM.

Table of Contents

1. Sales strategy
2. Territory Planning
3. CPQ (Configure, Price, & Quote)
4. Compensation Plans
5. Lead Management
6. CRM Automation
7. Data Analysis

1. Sales strategy

What is it?

Sales strategy is a well-defined plan and approach that a company implements to achieve its sales objectives. This involves your methodology to position products or services in the market, sales process, target market identification, customer segmentation, pricing strategies, sales force structure, and sales ready messaging to name a few.

Sales strategy can vary based on industry, market conditions, overall business goals, and more. A well-executed sales strategy can lead to higher opportunity close rates, increased market share, improved customer satisfaction, and sustainable long-term success for your organization.

How it relates to your CRM:

Your CRM is meant to be the place where your sales process lives. It needs to be set up in a way that aligns to your sales strategy. Below are 4 processes and 1 playbook to show how your sales strategy can live in your CRM.

Target Companies and Contacts

Be specific about the industries that you want to target with your offering. Furthermore, figure out who the key contact roles are within those industries. For example, if you offer marketing services where your expertise is banking, you may want to target banks (obviously), wealth management companies, investment firms, and financial technology companies. The key contacts that you may want to reach out to are bank presidents and vice presidents & above at non-banks. Figure out your targets, segment data in your CRM accordingly, and work with marketing. This leads into:

Leads Become Contacts

Time is precious, which means you likely don’t have time to reach out to everyone via phone. I would recommend that you work with your marketing team, if you have one, to set up email outreach campaigns to cold leads in order to warm them up. Leads then become contacts through lead scoring in your CRM; a topic we’ll cover in a bit more below and in a future post.

Contact into a Deal

Once a contact shows interest in your offering, there is a chance they may become a deal. Create an exact criteria that denotes when a contact with interest in your offering becomes an opportunity. A simple way to qualify a deal: it is not a first meeting, but it is a deal after the first meeting if the contact expresses an interest. The key is for your Sales and Sales Operations teams to work together to decide that criteria, disseminate this information to the wider team, and then audit those early stage deals in your CRM to ensure they are legitimate.

Deal Becomes Qualified Out

Once you have a deal, reps need to continuously qualify buyer interest and their potential to purchase. We do not want to waste 3 months on a deal for it to go nowhere. Sales and Sales Operations need to come up with a sales process and methodology that involves a specific set of criteria to understand when a deal is qualified out (i.e. no longer a viable deal, which you need to walk away from). It’s vital to mark deals as qualified out and not just as lost in your CRM. See our previous post for details on lost vs. qualified out deals.

Sales Playbook

Sales strategy, process, and methodology are essential to success. However, they are useless if no one uses them. A number of CRMs enable users to capture the aforementioned in a sales playbook. This is a digital collection of how your team is meant to operate. This can include initial questions to ask your warmed up contacts, when a contact is considered a deal, how and when to qualify out deals, and more.

2. Territory Planning

What is it?

Your sales organization should be organized into territories, if you have more than just a couple of sales reps, so they don’t accidentally work on the same accounts. Territories can be set up in a variety of ways based on how your company is structured. This breakout can be done by country, state, product, industry, company size, and more. 

Your specific territory plan should depend on how your business operates, what your goals are, and how many reps you have. You want to ensure a fairly even distribution of opportunity to all reps lest you cause a litany of complaints that sound something like, “I have a terrible territory.” “Why does he have a better territory?” “I may have more companies than everyone else, but I’ve already qualified most of these out.” Sales Operations team leaders should consider as many factors as possible and work with sales to craft the best possible territory for everyone to succeed. 

How it relates to your CRM:

You can use your CRM to help you execute your territory plans via data that should already exist in your system. Remember that you can use field data such as country and state to filter, create groupings, and run reports. This data can help you to craft your team’s territories much quicker than if everything sits in a program such as Excel. 

Once you decide on the territory assignments, you need to put that data into your system. I would recommend that you capture territories as a field on the company object in your CRM. While you also want to have reps assigned to those territories, you may run into an issue with this alone. A rep may accidentally assign themselves to an account in someone else’s territory. However, you would have to know all of the companies and which territory they are part of off hand in order to audit that data. However, when you have territories and company owners assigned, it gives your team a clear cut view of who is in charge of which accounts.

As a bonus, you might want to also consider regions as a level up from territories. This is especially true if you have multiple sales managers that overlook a set of reps. You could group multiple territories together to create a region. 

3. CPQ (Configure, Price, & Quote)

What is it?

CPQ refers to a software solution or a set of processes used by businesses to streamline and automate the sales quotation process for complex products or services. It enables sales teams to quickly and accurately generate quotes and proposals for customers based on their specific needs and requirements. This is something that Sales Operations can lead both from a process standpoint (i.e. how you run CQP) and from a technical standpoint (i.e. the system you run CPQ with).

How it relates to your CRM:

Some CRMs have a native CPQ while others integrate with third party software. Let’s assume the former below.

Configure

CPQ should be configured by Sales Operations under the guidance of sales management. Your system should allow you to customize products or services that you offer. 

Price

The CPQ in your CRM should enable you to incorporate pricing rules, discounts, and pricing variables, such as quantity, optional features, or special offers. Some or all of these features may be necessary for your team to provide your customers with a complete and accurate price. 

Quote

Once the products and services are configured, and the price is determined, your CPQ should enable you to generate a detailed sales quote or proposal. Your quote should automatically pull in data from your deal, company associated with the deal, associated contacts, and of course the pricing. This all helps to reduce the amount of manual work needed to create a quote.

Workflows & Approvals:

If you are in the midst of CRM or CPQ software selection, one thing to look out for are workflows and approvals. The configuration and pricing features may provide all the functionality you need, but without a workflow to get pricing approved, you stop your efficiency dead in its tracks. Your system should allow you to forward your pricing to get approval. On the same token, sales managers needs a way to approve pricing once it’s sent to them. 

Just as pricing may need an approval, so too may quotes. In an ideal world, your CPQ should enable you to do so.

4. Compensation Plans

What is it?

A compensation plan is a structured strategy that is created with Sales Operations, sales, and oftentimes, upper management. It outlines how sales representatives and other commissioned employees get rewarded financially for the achievement of specific sales goals and objectives. Compensation can come via a percentage of the deal value, as a flat fee for milestones hit, and more. It is a crucial component of the overall sales strategy and should be designed to motivate the sales team to perform at their best, drive revenue growth, and it must align sales efforts with your company’s business goals.

Example: If your company is in dire need of cash, you may want to incentivize your team to receive upfront annual payments instead of monthly payments. If your company is close to an acquisition by an investor that wants customers locked in for the long term with a high annual recurring revenue (ARR), you can incentivize longer term deals and ARR. 

How it relates to your CRM:

Take a look at the won deals in your CRM. What is the total average deal amount, ARR, and term length? What is that by each rep? How many total deals have they closed? If all else stays the same year over year, the answers to these questions can help you to understand how to compensate your team in the future. 

Let’s go back to the example above where your team needs more cash today, so you want to incentivize upfront annual payments instead of monthly payments. If your CRM captures payment cadence, you could then look at how many contracts are upfront vs. monthly. You may find that 90% of your contracts are already upfront, which means that an extra payment incentive to reps for upfront deals is likely a waste of money. You would want to look at other levers you could pull to get more cash upfront. 

Imagine a 3 year deal worth $10,000 in ARR. Perhaps you could incentivize the customer and your sales team to front load the ARR. If the rep can get the customer to pay two years upfront, then they could get the final year at half the price. If the customer signs this deal, you could give your rep a small bonus. I don’t necessarily recommend this exact action, but the point is that Sales Operations needs to look at and understand data in the CRM so they can plan and strategize for the future accordingly.

5. Lead Management

What is it?

Lead management refers to the process of capturing, tracking, and nurturing potential customers (leads) throughout their journey from initial contact to sales opportunity. It is a critical aspect of CRMs that helps businesses effectively manage their leads and maximize the chances to convert them into customers. This is a task that Sales Operations should undertake with both sales and marketing.

How it relates to your CRM:

Lead Capture

Leads can be captured from various sources, such as website forms, social media, email campaigns, tradeshows, and other marketing initiatives. This data should live in your CRM so it can continue along the process.

Lead Tracking and Segmentation

You can categorize leads in your CRM based on different criteria, such as their country, state, industry, level of engagement, and more. Segmentation enables sales and marketing to tailor their interactions and communications based on these attributes.

Lead Nurturing

This involves engagement with leads over time through relevant content such as emails, social media, and other touchpoints. The end goal is to turn these cold leads into warm contacts so they are ready for further sales engagement.

Lead Scoring

This is a method used to rank and prioritize leads based on their level of interest, engagement, and potential to turn into a deal. You can configure your CRM to assign scores to leads based on specific actions or behaviors they take. All of this helps the sales team to focus on those who are most likely to become customers.

Sales Handoff

When a lead reaches a certain level of readiness as determined by lead scoring, Sales Operations can set up workflows so that your CRM automatically notifies the rep. This ensures that the sales team can pick up where marketing left off, continue the conversation with the lead in a well-informed manner, and all without delay because of automation. More on that below.

Performance Analytics

In order to understand the effectiveness of your lead management process, it’s vital to run analyses from time to time to get insights on lead performance, conversion rates, and the overall effectiveness of marketing and sales efforts. These metrics can help you to refine your strategies and optimize your lead management process.

6. CRM Automation

What is it?

Automation for CRMs refers to the use of technology and software to streamline and automate various tasks and processes. The goal is to enhance efficiency, productivity, and accuracy. The amount of automation that’s possible varies from system to system. Automation is often led by Sales Operations and can be executed in conjunction with sales, marketing, IT, finance, customer support, and any other team that has data in the CRM.

How it relates to your CRM:

Data Entry and Management

Automation reduces manual data entry as it captures and updates customer information automatically from various sources, such as website forms, email interactions, or social media. Be sure to set up workflows to ensure that form submissions, email replies, and social media responses get routed to the proper sales rep. You don’t want a potential opportunity to walk away because of poor or a complete lack of automation.

Lead Management

We discussed this topic in depth in the previous section, so we’ll keep this concise. We should aim to automate the capture, nurture, scoring, and handoff of data. To nurture, create marketing programs such as automated email campaigns. To score, most CRMs have built automation features; use it. For data handoff, set up workflows so data passes from marketing to sales without human interference.

Task and Activity Automation

Use workflows to automate repetitive tasks such as the need to follow-up on emails, schedule appointments, or update records. The more time Sales Operations can free up in your reps’ day, the more time they can spend on actual sales.

Sales Process Automation

We discussed the essentials of sales strategy and processes above, so just remember this: CRM automation can guide the sales team through their sales process, remind them of important tasks, and deadlines to ensure that nothing falls through the cracks.

Customer Support

If your CRM has a customer support module with automation, route customer inquiries to the right support agent, automate responses to common questions, and automatically pass off ticket information on high profile accounts to management.

Reporting and Analytics

A CRM wouldn’t be complete without reports. Many systems enable you to set up automated reports and dashboards that can be sent to your team on an ongoing basis. This helps to provide valuable insights into lead management, sales performance, customer behavior, and more. 

Sales Operations professionals should understand the benefits of automation and how to set it up in a CRM. Automation leads to optimized customer interactions, a reduction in manual errors, an increase in the speed of operations, improved overall customer satisfaction, and empowered sales, marketing, and support teams.

7. Data Analysis

What is it?

This is the process of Sales Operations’ examination and interpretation of data collected within a CRM. This is done to gain insights and to make informed business decisions. Data analysis involves the use of deal, company, and contact data to understand customers, sales performance, lead management, and other relevant information related to business performance.

How it relates to your CRM:

While there are countless reports and analyzes that can be run in a CRM, let’s stick to some of the highlights of what Sales Operations should be on the lookout for:

Number of New Leads and Contacts

Check to see how many Leads and Contacts were created in your CRM on a monthly basis. Look for trends and dig to find out why. Learn what works and repeat it. Learn what doesn’t work and make changes.

Lead to Contact Conversion Rates

It is vital to understand your conversion rates. Check your funnel to see which nurture activities help to turn your leads into contacts. Perhaps a certain email campaign sparked interest in a large number of leads. Maybe it was a tradeshow that got people excited. Whatever the results are, it’s important to understand why so you can improve and repeat. 

Campaign Conversion Rates

Conversion rates provide valuable insights into the effectiveness of marketing and sales efforts. These rates offer quantifiable data on how well campaigns help to turn leads into customers. 

Won Deals by Rep by Quarter (ARR – Annual Recurring Revenue & TCV – Total Contract Value)

It’s crucial to track performance because it’s the main way to understand sales’ performance. 

Other Deal Data

The list also includes deal close rate, average sales cycle, average deal size, number of new logos vs. upsells, renewal rate, and beyond! There are countless ways for Sales Operations to parse out CRM data. They help us understand our customers, optimize sales processes, and enhance overall sales performance all in an effort to help our organizations stay competitive, adapt to market changes, and ultimately drive revenue growth and business success.

To Be Continued – Sales Operations

This is just a taste of what Sales Operations does and how they can help to optimize your CRM. There is more to share on the topic. Stay tuned for part 2 coming next month.