Sales BenchmarkingLet’s be honest about how things work in many large, traditional companies.  Operations leaders often have a disproportionate amount of influence over Sales functions.  This is especially true in Business Services companies and other more mature business models. Why?  Simple.  In these organizations, Ops controls most of the employees, expenses, and data.  Most key leaders “grew up” in Operations.  Sales executives, by contrast, are often viewed as wanting to take foolish risks.  Ops says Sales doesn’t understand the business.  Sometimes this observation is accurate.

 

In this environment, validated data is essential for the sales organization to prevail. It’s crucial for quantifying appropriate sales risks. It’s indispensable for fighting the status quo and accelerating revenue growth. In fact: In the absence of crystal clear data, the Sales VP loses the strategic negotiation.  Data is the most effective way to influence strategy, especially against political headwinds. 

 

If you’d like to learn more after reading this article, click here.

 

The Story of the New Sales VP

At 34, Robert was younger than most of his counterparts.  He had only been VP of Sales for 6 months.  It was clear he deserved the job.  He rose from junior sales associate to become his division’s top rep.  Then, as sales manager, he turned around a struggling team.  He promoted 5 reps in 6 years.  Then he spent a year in Marketing.  He was a rising star.

 

In Robert’s company, Sales VPs reported to the CSO.  Their counterparts were the VPs of Operations, who reported to the COO.  Both C-suite executives reported to the CEO.

 

Robert’s sales organization loved him.  He had a ton of credibility.  He embodied the company’s self-proclaimed penchant for “promotion from within.”

 

There was only one wrinkle: Robert’s business relationship with Operations.  He struggled to get Ops leaders to accept his team’s deals.  Ops managers insisted on “helping” interview prospective sales reps.  They complained endlessly about the dollars spent on Lead Gen efforts.    

 

Sales Compensation was a particularly thorny issue.  The COO’s policy required both Sales and Ops VPs in regions to approve large commissions.  Ops managers thought sales reps were overpaid.  Every month Robert spent days negotiating with his regional Ops VP around large commissions.

 

Robert felt like all his battles were internal.  He missed the days when he devoted his energy towards destroying competitors.  Yes, the wagons were circled.  But instead of shooting at the competition, everyone was aiming at each other.

 

Politics and Fear Kill Speed and Growth

Robert’s story rings true to many sales leaders in Business Services industries.  The CEO says he wants to know when Sales and Ops don’t agree.  Do the VPs call him up?  NO WAY.  Life is like kindergarten: no one wants to be a tattletale.  The COO and CSO believe their policies ensure Sales/Ops collaboration.  In reality, field managers use “policy” to obstruct deals they don’t agree with. 

 

In this way, a thousand small negotiations unfold every day.  And over time, companies forget what great performance looks like.  The “position power” prized by middle managers in bureaucracies ensures mediocrity instead.  In the absence of data, risks aren’t taken.  Inertia wins.     

 

What Can Robert DO?

There are leaders like Robert in most large companies.  If this story sounds familiar, here’s how you can make a difference.  If you decide to try, act quickly.  There are only eight weeks left in the year, and change takes time.

 

#1 – Start the conversation.  This is the hardest part.  One exec told me, “You can’t make your career by speaking up.  But you can sure end it.”  Use this article as a starting point.  Forward it to your counterparts.  Ask two questions:

 

  1. “Do you think we have a problem here?”
  2. “Do you think the boss (or shareholders) notices?”

 

In most organizations, this act requires a fair degree of bravery.  Why?  Because if you start this conversation, you will immediately encounter the status quo.

 

#2 – Get the data you need to minimize the influence of power and politics on the conversation.  This is where you build credibility as an executive.  Remember the bias against sales executives?  Prove it’s wrong.  Conduct a Sales Productivity Benchmark.  This is a comprehensive review of your organization.  If you engage an outside firm for this, be sure they complete robust discovery.  For example, SBI’s Discovery includes:

 

  • Sales Rep “DILO”s (Day in the Life Of):  We ride with your field sales force.  We observe the moment of truth when they engage your customers.  When you ride with them, they put on a show for the boss.  When we do it, we see things as they really are.
  • Mystery Shop:  We engage your competitors.  We observe how their understanding of the Buyer’s Journey compares to yours.
  • Benchmarking:  We review your sales metrics against your competitors AND those outside your peer group.  For example, think about the compensation battle I mention above.  An SPB can show if your comp leads or lags v. your peer group.

 

Sales Productivity Benchmark

 

Convince your company to base decisions on metrics.  Don’t base them on whose will is stronger or who has more “stroke.”  Get “Sales v. Ops” out of the equation by using benchmarking data and solid Discovery.  Use a Sales Productivity Benchmark as a starting point.  If you want to try to accomplish this internally, contact me for some best ideas.