article | February 21, 2017
Bust These Sales Operations Myths
Children believe in myths. Adults know better. When it comes to Sales Operations, it’s better to believe in fact over fiction. In SBI’s Annual Research Report we gathered facts about the best sales teams. We asked: “What are the top 10% of sales teams doing differently that is contributing to their outstanding performance?” One answer: strategy. The best teams deal with the world the way it is, not the way they wish it was. Said differently, they deal with the facts and don’t buy into the myths. Here are three common Sales Operations myths that will hold you back if you don’t knock them out.
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The Myth: By increasing quotas I’ll increase sales.
The Reality: Raising quotas will not necessarily ensure that sales will hit its number. An arbitrary quota setting process will have unpredictable results. Successful sales people expect their quota to increase every year. But doing so without regard for territory potential or other market factors is short-sighted.
There are other challenges that get in the way of setting effective quotas. An ambitious sales executive might commit their team to a big number. That top-down approach lacks consideration for the bottoms-up capability. The total potential in a territory may shift based on customer movement. When that happens, future quota attainment is at risk. Last year’s solid performance becomes next year’s impossible, or improbable, target.
Quotas that are unrealistic will demoralize your sales force and reduce your credibility. It can also cause unnecessary turnover. A high performer who gets tasked with an impossible quota will go elsewhere. Profitability and productivity will suffer as a result.
The Solution: Create sales quotas that reflect the potential of each territory by producing the following:
It’s difficult to grow revenue faster than your industry’s growth rate and faster than your competitors. The Revenue Growth Diagnostic interactive tool will help you determine if you are likely or unlikely to make your number.
The Myth: We have a CRM system so my forecasts will be accurate.
The Reality: Merely having a CRM does not ensure that your forecasts will be accurate at all. There are several challenges that organizations face when designing an accurate forecasting system. Sales reps may not have any personal accountability for the accuracy of their forecast. Additionally, they may lack sufficient awareness of all the moving parts of a deal.
The system-applied probabilities and closing ratios may not reflect actual pipeline behavior. As opportunities flow through the pipeline they get altered as the deal develops. Other roles, such as Sales Managers or Operations, adjust the numbers along the way. Deals that were supposed to close this quarter get pushed out to next quarter. Opportunities that were expected to amount to millions shrink to thousands. 500 unit forecasts result in 50 unit orders. These forecasting issues have a negative impact and can reduce Sales Operations’ credibility.
The Solution: Construct an accurate forecast methodology by creating the following:
The Myth: Our sales team’s training and development needs are fully satisfied by HR.
The Reality: HR’s training and development is usually too general to address all of sales’ needs. Your sales teams have specialized needs that can’t be addressed by general courseware alone.
Successful sales organizations rely on a comprehensive talent management program specifically tailored to them. Without it, sales leaders struggle to recruit top performers and onboard them effectively. Hiring criteria is often overly focused on metrics and accountabilities vs. role-based competencies. As a result, sales teams have a few ‘A’ players who make their number. The rest of the sales team struggles to achieve their goals. Sales leaders lack the tools to manage performance, coach their teams, and develop talent. They find it difficult to retain key talent and develop them into future leaders.
The Solution: Develop the talent required to execute the sales strategy by producing the following:
For additional insight on the on how to bust these, or other, myths that are holding you back, visit The Studio, SBI’s state-of-the-art executive briefing center. A visit to The Studio typically results in getting 3 months of work done in 3 days. The immersive sessions accelerate everything, dramatically reducing the time it takes to diagnose a problem, develop a solution, and create an implementation plan.
Header Photo Source: Shutterstock’s Stefan Holm.
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