In many businesses, sales ops still functions as a tactical department whose sole role is to support the sales leadership team. That’s certainly not the case at Rackspace, a managed cloud company based in San Antonio, Texas. There, Scott White, Vice President of Sales Operations, defines his team’s mission more expansively. White has transformed his group into sales leadership’s strategic partner, offering the team insights they may never have arrived at on their own. His secret weapon? Standardized sales and marketing reports.
“I’ve earned myself a seat at the table in our sales and marketing leadership team, and for operations that can be sometimes unique,” White says, who joined Rackspace in 2002, right after graduation from the University of Texas at San Antonio and rose to his current post in January 2014. “And that’s really because of the functions that we’ve built in the team. The fact that we’re not just report runners is very purposeful because we’ve built a team to do lots more.”
Sales operations means different things to different people, concedes White. “At Rackspace, we’ve defined sales operations as a full-service team to not only identify what we’re doing well and what we could do better, but to take that and go improve sales and marketing operations on a daily basis.”
Done right, standard reports measure exactly what the executive team wants sales to measure, when they want it measured — month-to-month and quarter-to-quarter. Not just that: they can tell the executives what they need to know even before they know they need to know it.
“One thing that we try to do is we try not to report the news; we try to make the news,” says White. “If we report the news, it’s already happened and it’s old, and the reality is, in our markets, things change very, very fast.”
White says that effectively using the data gleaned from standardized reporting has helped Rackspace increase its productivity by 20 percent over the past 18 months.
For example, lead volume is a critical number, but sometimes the sales leaders don’t give it sufficient attention. The sales ops team can trend that volume over time and spot potential revenue shortfalls before they happen and forecast their impact down the road, based on insufficient opportunities in the pipeline, White explains.
Sales op’s strategic role becomes most evident in the monthly operating review process, which involves a series of meetings, starting at the very top. First, the CEO and the head of sales meet to go over the standard sales metrics, provided by White’s team. Then the head of sales meets with his direct reports in various market segments to look at standardized metrics. Then the sales VPs meet with their sales directors, and they look at a different set of metrics that are more activity-based, such as number of sales calls made or emails sent. Lastly, the directors call a monthly operating meeting with their managers to review the metrics that matter most to them. No one gets bogged down in data, because each group reviews the metrics that are most relevant to them.
One reason the monthly operating meetings work so well is that they are entirely nonjudgmental, says White. His sales op analysts show up with the answers to “what is happening,” based on key metrics, and then they work with the sales leadership group to understand “why” it’s happening. Once they have the answer to both questions, they can decide jointly on a direction. “That results in sales ops team being strategic rather than just tactical,” White says.
“We’re analyzing what they’ve accomplished and analyzing a lot of leading indicators that tell us, ‘In three months, what are the things we need to concentrate on and what should we do now to adjust?”
For example, the sales reporting team might see that in the third quarter of this year, there’s a very low pipeline for a certain team or even a segment of Rackspace’s business. Having that information in hand allows White’s team to interact with marketing to boost the production of leads and opportunities for that segment. “If we were ‘reporting the news,’ we would wait until Q3 to say, ‘We don’t have enough pipeline,’ and we probably wouldn’t be successful,” White notes.
Rackspace focuses on 10 key metrics, such as the number of sales opportunities created and how much pipeline each rep is generating, as well as the conversion rate of leads to opportunities and bookings attainment.
Sales reporting content needs are always evolving, and it’s critical to keep that content relevant. “I see many companies try to focus on too many. We’re always working to uncover new metrics that really matter in our business. Our business changes, and our team has to evolve with that,” he adds.
Standardized reporting can also help with reaching internal training goals. In 2014, Rackspace introduced new messaging and a new strategy and vision for its 300,000 customers. White had to get his 400 frontline sales reps up to speed fast. “We needed to retrain all of our sales and marketing ‘Rackers’ how to speak this language really effectively,” White says.
So, White devised a sales-certification reporting program — with 100, 200 and 300 certification levels, much like college courses, which not only helped fulfill Rackspace’s “Fanatical Support” pledge to customers but kept executives abreast of the reps’ progress.
“One of our important metrics for the quarter was to measure certification of our ‘Rackers,’” White says, using the company’s internal term for Rackspace employees. “So one of the standard reports we built at the manager level showed what reps were certified and what reps were yet to be certified. As a team, we worked through, week by week, progress on certification to make sure we hit our targets.” Eventually, 100 percent of the reps received training.
The reports filed by White and his seven sales reporting team members reflect a strategic quality: the ability to stay dynamic. “One of the things that makes standard reporting relevant is frequent updating,” White says. “Sometimes things will drop off and sometimes we add new things. When we finished the managed-cloud certification in the second quarter of the year, that metric fell off our dashboard.”
The dashboard helps Rackspace organize its sales reporting content and make it accessible across all levels of employees and leadership. “There’s still a lot of ad hoc reporting — just to be transparent — but the sales op team has gained wide agreement on the things we want to measure and are able to deliver it on a daily basis to the people who need to review the content,” White says.
Scott and his team distinguish themselves from other sales ops teams in that they start with questioning the strategic value of the measurement,” says Greg Alexander, CEO of SBI. “Every sales force has dashboards, but are the dashboards measuring what matters?”
In addition, Scott understands that the standard reports required by the Chief Revenue Officer (CRO) are different than the ones that are needed by VPs, directors, managers and reps, in both the sales and marketing team. That’s how Scott went from being just an employee to a true strategist, the right hand of the Chief Revenue Officer, Alexander says.
Most sales teams struggle with the “garbage in, garbage out” syndrome. If sales reps don’t know what metrics matter, they are bound to collect bad, and useless, data. White has eliminated that problem by tailoring the metrics to define success for each individual salesperson. That way, the salesperson is entering high-quality data that can really make a difference.
“My peers and our senior leadership team have a high level of confidence in my ability to measure and manage the business,” White says. “So that was definitely a contributing factor in my ability to standardize the reports.”
His ability to standardize, and do it well, produced those selected metrics that assess what makes a sales rep successful. “We got agreement with my peers on the sales and marketing leadership team that these things drove the strongest correlation to success, and we limited what we were going to measure,” White says.
Rackspace’s net revenue grew 15.8 percent in the fourth quarter of 2014 to $472 million, compared with the year-ago quarter, while net income surged 77 percent to $36.9 million. White is proving that standardized reporting can make a big difference at the company, which trades on the New York Stock Exchange.
A case in point: When White’s team found that “Rackers” couldn’t find content fast enough to answer customers’ online questions about products and services, White utilized a content management resource called KnowledgeTree, which lets reps log in specific information about customers — what they’re buying and where they are in the sales process, and receive back proactive, customized content.
“We reduced the time that it takes to find content for our reps dramatically,” White says. “So that’s an example of how we took data, implemented that in a very regular cadence, and discovered a deficiency in the business, then went and not only told somebody ‘there’s a problem,’ but recommended solutions.”
Delivering and helping to drive results is White’s goal for his team. “It’s not to generate reports, it’s not to train people. We measure ourselves on how efficient and how effective our sales reps are, and that means many things. We have lots of missions to accomplish, and we have a large contribution to the business — that’s what separates us from being just report runners.”
The New Buyer's DNA Decoded
In this edition, we present practical advice from CEOs, heads of sales, marketing, finance and HR. We take a look at how to adjust the hiring profile, demand generation programs, forecast and pipeline management process, sales management coaching cadence, sales methodology and the big deal inspection process.