Sales Operations Is the Missing Link in Creating a World-Class Coverage Plan

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.

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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.

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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 ‘Inward-Out’ means you are using outdated coverage models. These outdated models may have worked in the past; however, they may not work for the future.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.

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