Sales coverage is not a meat and potatoes exercise. Can your SVP of Sales stand tall to the CEO and say “here is my coverage plan and it is optimized for our market?”

Sales operation needs to be in lock-step with your sales leader on your coverage plan exercise? Many sales operations leaders are stuck in tactical and daily activities. How can you elevate your sales operations team to think strategically? Sales operations will work with the CEO and SVP of Sales on the company’s coverage plan. This project will elevate the sales operation leader out of the doldrums of mundane activities.


Download our Top/Bottom Coverage Model to leverage a capacity calculator, and to identify Key areas of your Coverage Model that you need to work on. If you can only cover 40% of your Total Addressable Market (TAM) then you need other channels to cover the market.


Why Does Sales Operations Need to Be Involved?


Sales operations leaders are in the intersection of blending the company’s strategy with execution.  They are in the driver’s seat in helping the CEO and SVP of sales with the coverage model because they own the data. A coverage planning exercise needs data from across the organization. Moreover the net of the coverage exercise will affect most divisions once implemented.


In an SBI podcast, Chris Bittner, Sr. Director of WW Sales and Channel strategy at Auto Desk. You can listen here. Chris explains how he selects and optimizes channels at his organization.


What Are Sales Coverage Strategy Best Practices?


The core of any coverage strategy is allocating people, money, and time. Sales coverage is one of the most strategic decisions a CEO and Sales leader have to make. Knowing when customers prefer to buy directly or indirectly can make or break your revenue goals.


The exercise starts with understanding which channels your buyers want to buy through. Then determining what it costs to acquire a customer by segment or product, market and sales channel. And finally, understanding the lifetime value of each customer. The goal is to design a coverage plan that serves the needs of your customers and optimizes customer acquisition costs.


It’s difficult to grow revenue faster than your industry’s growth rate and faster than your competitors. Leverage the How to Make Your Number in 2018 Workbook to access a revenue growth methodology to hit your number quarter after quarter, and year after year.


Inward Out vs. Outward In


Too many companies are focused “inward-out” point of view, vs an “outward-in” point of view. ‘Inward-Out’ means you are using outdated coverage models. These outdated models may have worked in the past; however, they may not work for the future. A best practice is to make sure you are ‘outward-in’ focused by using a buyer survey or interviewing customers.


This should be a mix of current customers and prospects with the goal of understanding what is most important to them during their buying process. Sales operation leaders can play a vital role of determining the right customer and prospects to interview. Then develop the interview questions and interview them.


Account Segmentation


Account segmentation will help the SVP of sales understand which accounts in your market are going to generate the most revenue over the shortest period of time. Account potential is the estimated amount a prospect or current customer can spend with you. In most businesses, the executive team is provided revenue potential by market level only.


But they really need to know the revenue potential by account, product, and buyer. Sales operations is the owner of this data and will help develop the potential and Ideal Customer Profile (ICP). Understanding where your potential lies will allow you to over staff sales resources on your top accounts and under staff sales resources on your bottom accounts


Sales Capacity Calculations


One way to determine the right channel is by a tops-down and bottoms-up capacity process. The top-down approach takes the revenue goals and simply by dividing the average quota to calculate how many reps you need. The bottoms-up approach takes how much an individual rep can actual do per week and month.


It’s our perspective that salespeople have about 2000 hours of available selling time and that’s a simple calculation which is basically 40 hours a week times 50 weeks in a year. A benchmark for selling time is ~70%. That takes the hours down to 1,400 hours. Then calculate how many touches a customer needs.


Download our Top/Bottom Coverage Model to leverage a capacity calculator, and to identify Key areas of your Coverage Model that you need to work on. If you can only cover 40% of your Total Addressable Market (TAM) then you need other channels to cover the market.


Sales coverage is one of the most strategic decisions a sales leader needs to make. Selling to customers directly when they want to buy from partners is a surefire way to miss the revenue goal. Selling to customers through partners when they want a direct relationship with your company is equally devastating. Moreover, the best sales leaders understand that sales operations is mandatory for a sales coverage exercise.



Additional Resources


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As a guest of The Studio, you’ll get unlimited access to SBI’s CEO, Partners, and a handpicked team of experts. Together we’ll focus on developing an action plan for your needs by getting a month of work done in just eight hours. It’s an amplified experience that you can only get in one place: The Studio. I hope you join us.


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Scott McLeod

Helps clients make their number through advanced analytics, transforming organizations, and innovating go-to-market strategies.

Prior to joining SBI, Scott spent 15 years in the telecommunications and semiconductor industries, holding leadership roles in sales and marketing operations, business analysis, and sales engineer. Most notably, at TelePacific Communications he delivered results on projects that included sales and marketing strategy, CRM design and implementation, marketing automation, product development, market segmentation, pricing, and compensation planning. Scott also managed analysts focusing on driving revenue growth by collecting, analyzing, and applying data.


His work has proven invaluable for many SBI clients. For example, Scott oversaw compensation gap analysis, benchmarking, and redesign for a Fortune 500 Corporation in the heavy equipment industry which revealed gaps to best practices in design and the impact to operations and bottom line.


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