I recently interviewed Christopher Fris, an executive sales operations leader who knows how to enable revenue growth in a meaningful way. Today’s topic is focused on how Sales Operations enables the sales plan. During our discussion, Chris and I leverage leveraged the annual workbook for our conversation. Flip to the Sales Operations phase on page 314 of the PDF.
As the Vice President of Global Sales Strategy and Operations at Ryder, Chris demonstrates how to improve the efficiency of the sales team. Chris has served as the head of sales operations the past seven years at Ryder and before that led sales operations for DHL Express for fourteen years.
The sales leadership team is working on the business every day to make the number. But if you’re only working ‘in’ the business and not ‘on’ the business, sometimes you’ll get stuck on the expectations treadmill. Every month, every quarter, every year, you’re running a little faster uphill each month to try to hit the number.
The strategic function known as Sales Operations can make sure that while you’re running on the treadmill, you’re also working on the business so things don’t have to be so hard. These include both tactical and strategic initiatives. The strategic focus of the sales operations team becomes focused on the programs that allow you to achieve the sales plan.
Why this topic on this day? Sales ops has become a catch all phrase. The sales ops leader gets assigned all the work no one else wants to do. Often underfunded and understaffed, sales operations leaders fail to deliver a meaningful revenue contribution. Yet, the best growth executives understand that sales ops are the most strategic sales function in the entire company. They understand that when deployed correctly, sales ops can impact revenue growth in a very meaningful way. Do not starve this vital department. If you do you’re going to miss your revenue goal.
I have included the full transcript of my conversation with Chris, or if you prefer, listen to the full interview through an audio podcast.
What are the business outcomes the sales operation team is charged to deliver?
The purpose of sales enablement is to achieve the sales plan. As you put it, make your number. But it’s more than that, it’s setting the strategy that enables the sales team to be more efficient. That probably would take it into our charters to advance their approach, advance their learning, recommend direction, and push pieces in front of them that will enable them to be more efficient.
Chris, could you share with the audience a little bit about some of your strategic focus areas?
Yes, after strategically focusing on getting funded and getting some staffing, we’re all challenged with that same challenge you put up front. But, I think our driver is around sales effectiveness and you had set up the discussion today around sales efficiency, and I think that efficiency is a primary element that drives you into being more effective.
When we think about areas like channel execution, we think about areas trying to advance the understanding of our sales team around keeping focused and keeping abreast of buying trends. How do you have a customer-focused conversation in the new world of sales that stays away from the features and benefits, and drive deeper dialogue into the prospects business.
A lot of our strategic focus of late has been around those areas. Certainly you know, we’re always paying attention to the pipeline, and other metrics that I’m sure anybody else is paying attention to in business today. But I think there’s other elements along that strategic front, particularly as it relates to customers and relates to how you go about attacking them with your channel, that are more important strategically.
There are some people reading this that do not have sales operations or maybe they have it and it’s understaffed. You’ve been doing this for a long time so I’m going to ask you a question about the organizational chart. And I’m asking it because I want those that might work outside this discipline to think about how sales operations are really at the nexus of so many interlock points across the company. Describe your sales ops org chart, and particularly the working relationships that it has with several stakeholder groups, and I’ll spell those out for you. Executive leadership, which isn’t just sales leadership, but the executive team across the board. Product management, sales leadership themselves, the finance department, the marketing team, HR, and increasingly, information technology.
Yes, I think before I even go into those detailed relationships, Greg, it’s critical to understand sales operations and the multiple elements of it. Even when people say they have it, what do they really have? I think that the most critical mistake to avoid is that your sales operations people are purely a reporting function. If they’re going to be purely a reporting function, you might as well leave that with finance and save yourself the headache. If you don’t have a team that’s aligns to sales and sales only objectives, which typically the finance team is not, I think you do miss a key piece of moving the business forward.
And those relationships are critical I should point out. I, fortunately, here have an executive who my group reports directly to, so I report directly to the CSO, which I would also highly recommend in any organization that decides to launch sales ops or has one today. I am an executive leader that understands it, gets it, and treats it as a strategic function.
With product management, they obviously do their own sets of reports and metrics around each one of their products, and what they’re moving, and what’s not, and how their end results are. But often they don’t get at where and why things are not in the pipeline and aren’t being approached, and the dialogues are not being had at the point of sales.
So, we feed them the information that they need, in advance of their year and months quarter closing, around where the products are going. In sales leadership, the critical piece there is, I think, to be a support role. Both in terms of: they do need metrics and we provide several of them. But also, we try and refine what we give them, and use our intelligence to work on what’s going to be the most effective metrics. Because dashboarding has become king and unfortunately, on my dashboard, I pay attention to the speed my car is going and that’s about it. That’s easy for me, that way I’m paying attention to the road, and I think it’s just critical with dashboards and with reports. So, I think keeping sales leadership informed but keeping it focused.
On the finance department side, we try and mitigate what they try and measure. I think it’s important that finance often measures what finance wants to see, not necessarily how are you going to get there and what’s the supportive metric. We try and focus on not just the result of how many beans got produced at the end of the day, but how are we going to get there? How do we support our team with the data they need so that, at the end of the day, the finance team gets the numbers they want.
I think the only other thing I would point out in finance is pricing. Pricing is not within my group, so we do a lot of interface with the pricing team around trying to get them to understand market based pricing, rather than cost plus pricing.
On the marketing team, we have a close relationship with the marketing team, forged over time I would say. It’s not a perfect world and it never is but I think it’s important for sales operations to play that role because, as you well know, there’s often a rift between sales and marketing. I try and be the Switzerland of that rift, if you will.
With respect to HR and IT, again, very critical involvement. HR handles the comp plans, many times comp is under sales ops which are not in my organization at Ryder, nor are incentives involved there. So, training and incentives are very critical pieces. We drive what needs to be trained, we drive the core strategic elements of the sales comp plans, so very tight relationship there with HR.
And IT, obviously data is king these days, so we need to stay very abreast with the IT guys, and even with our own systems, like CRM and the other enabling tools we have, IT support is critical.
Greg Response: Through that explanation, you can see how strategic sales ops really is, because you must interface and connect with and work with and collaborate with all these different people within your company to be successful. And if you’re not that, as a sales ops leader, then you just get reduced to somebody who runs reports, which I know is not anything that we want to be reduced to.
Christopher, I want to get to analytics, which seems to be all the rage these days. Specifically, what we’re seeing out there is this continuum of analytics and let me just briefly describe this for the benefit of the audience, and I’ll get your commentary on this.
Analytics has four steps to it. There’s descriptive analytics that says, “This is what has happened in the past. I am accurately describing the past.”, which sounds easy but it isn’t easy. It’s tough to describe the past. Diagnostics says why did it happen. So, “Yes, I understand what happened in the past, but why did that take place?” Predictive says, “If everything stays the same, I’m going to predict the outcome at some point in the future.” And prescriptive, which is really advanced, is “Okay, I’m predicting the future, I don’t like the outcome. I want to change the outcome before it happens, so I’m prescribing a set of activities to alter the future.”
This all requires systems, methodologies, data, talent, and continuous improvement. So, when you hear that kind of four step continuum from left to right, share with me where you are on your analytics journey.
Yes, so we’re dabbling into prescriptive, but I would say that a fair amount of it is still in the diagnostic and predictive stage. I’d love to have more time to talk about prescriptive with you, Greg, because I think there’s a lot of these predictive analytics that are out there now, in terms of big data and the ability to trace people’s actions backwards, reverse engineering them and predict what the future could be, and even, as you point out, alter the future. There’s fascinating work going on in the big data space.
But, I’ll stay with where we’re at today and maybe a lot of organizations are, which is along the lines of one of the things that we dive deeply into, win-loss analysis, because I think it is critical to look at why you won and why you lost, and ensure that you just don’t count the score at the end of the game, but analyze each inning and determine what it was that you could have done differently, what you might have done better, and how you take what you did do well and repeat it again. We also do the same around product specific performance, so we go deep into the diagnostics there around what are we selling, what are we not selling, and why. What are customers buying and not buying, and why do we believe they’re not buying? Is it an approach, is it the price, is it the product itself?
Those are probably a couple big ones on the diagnostic line. Along the predictive line, there’s kind of the long-term and the short-term. The short-term predictive, often it’s looking at the pipeline stats, looking at the velocity, looking at the mix, trying to look at what our risk metrics are as they relate to retention and what do companies and customers look like when they’ve stayed with us and renewed, and what do they look like in advance of leaving. So, a little bit of reverse engineering there to look at what other customer’s in that same state now and trying to put some predictive analytics around which ones we need to pay a little more attention to in the latter stage of their contracts.
With the long-term ones, we do a lot of market analysis. We have a long and varied history to rely on, which many organizations unfortunately do not, but I think market can still use market analysis as a proxy for historic. But we use a lot of historic, we use a lot of sales feedback from the street. We also have a sales advisory board which we staff with members of the sales force across different roles and across different channels, and have regular meetings to convene and get information back from the street around what’s working and why.
I don’t know if I can give any call outs to any of your peer companies out there, so I won’t name any names, but I do spend a lot of time as a student of the game, out looking at what’s going on in the universe.
You mentioned win-loss to do a diagnostic analytical approach to sales, and it sounds like you have a pretty robust win-loss program. Tell the audience a little bit about how that works. Do you do it on every deal, do you do it on a subset of deals, do you do it yourself, do you have an objective third party, do it? Tell me about your win-loss program.
Yes, so we collect data on every deal with a series of questions that we pose, many of which are interactive with other questions along the line when they close the deal. So, when you close an opportunity in our CRM it opens a dialogue box of questions that talk about who the competition was, what the reasons were that you believe that you won or lost, giving us at least some high-level data to help us track against certain competitors, whether it’s price or service related. Both on the buying front and the product, both on the buying as well as the losing side of things.
We then take a subset of those and go deeper dive in them. We do them internally, which probably I would say is not necessarily the best practice, but we do it with and external group so we do it with a marketing group that kind of sets themselves up as Ryder, you know, we’re not secret shopping, I would say, with our own internal people. We do use our own internal people to literally make calls to a subset of customers as well, more along the loss front but even along the winning front as well, so we can get direct feedback.
Because often, customers won’t share 100% with their sales rep. I know this because a lot of the time I’m in the enviable position of being a buyer instead of a seller.
Yes, very good. So, audience members, this is a great way to really expand into diagnostic analytics if you’re just at the descriptive stage right now. I have found this with my clients to be highly effective. I do agree with Chris, that it needs to be an objective party. Now that could be another department, as it is in Ryder’s case, such as the marketing department, or it could be and independent third party and there’s lots of firms out there, we’re one of them that does that. But, by understanding why you won, why you lost, you’re really answering the question of why, and what you’ll see over time is that there will be recurring patterns and trends and that’s when you really can get into the predictive and prescriptive sides, which is “If we’re losing very often and this is the common reason why we’re losing, what are we going to do about it?”
In our last segment, we’re going to talk about three specific processes. The pipeline management process, the territory design process, and the quota setting process. And the reason why I cherry picked these three is because these are three things that we know that sales ops leaders that have obtained the title of vice president, these are three core processes that they really focus on, because they can really move the needle.
Chris, I’m going to give it over to you, if you could maybe describe for the audience your pipeline management process, your territory design process, and your quota setting process, that would be great.
Yes, sure, Greg. I think critical, obviously pipeline management. I don’t think I need to speak to any of your audience members unless they just joined sales today in a leadership role, as to how important pipeline management is. I think the critical piece though, is to ensure that you feel comfortable that you are operating under a buyer-centric sales process. One of the things that we did, with SBI’s help when I first came over to Ryder a few years back, was to work on a redesign of our sales process, which was very Ryder-centric at the time. And because of the Ryder-centric sales process, the Ryder-centric sales process gets defined into the pipeline stages and whether and where the customer was in the buying journey was really a lot different often than where Ryder felt Ryder was, or felt the customer was in.
I think it’s critical to have that framework. With the framework we have now, the weekly pipeline reviews that we encourage all our sales leadership and measure them on having with their reps, are always based around that buyer-centric view, as to where is the buyer in the process, not where you would like to feel the deal is.
We also encourage and have worked on a coaching based methodology for that, so that it’s not a beat down session, it’s not a “let me bring you in and grind through your deals and push you towards closing”, even though that’s obviously the long-term goal. But I think the critical piece is to look at it along the lines of, “okay, you need to define and stay focused on the short-term that’s going to bring you the money in the month, or whatever your measuring period is”, but also paying attention to the medium term and coaching along the lines of, “How do I get to understand exactly where the buyers are at in all these processes? How do I help you move those decisions along and how do I help you understand which one’s where if the buyer’s stuck, you need to get out of.”?
I think one of the most important pieces of effective pipeline management is not only moving deals along but moving deals out. So, let me, in the spirit of time, move on to territory design. Territory design for us, the critical element of it is opportunity based. We have a very good view of what the market is in out space and overtime we’ve collected data with respect to what the opportunities are out there. Obviously, it’s always being tweaked along the lines of “What industries are we being more successful in, what verticals do we want to focus on or do we have a new product to focus on?” But it’s always about looking at the opportunity out there first, and then determining the coverage capabilities within a certain territory.
We use a mapping software. I think it is critical to enable your team. If you’ve got a big sales force, you need to map out the territories to understand plot the opportunities within that mapped out territory and understand what the coverage capabilities are.
I think the other critical piece to that for us is all are not equal. You know, many times people want to split up the world perfectly because all my roles that are all called the same thing should all have the same size, and sometimes that works, and sometimes it doesn’t. Sometimes downtown Boston might be a territory for me that’s equal in opportunity to the states of Montana and Idaho. It is very dependent upon what is a reasonable amount of dirt to cover, but also making sure that the territories make sense to the opportunities within them.
Quota setting, it begins with a plan, because as you all know, you’re really the victim of the plan you get, so typically for us to try and parse that plan, we try and parse that plan between the elements of new and the elements of renewal. And then further parse the elements of new into that which we expect to get related to growth from our existing accounts and that which we expect to get from new logos.
We also have a retention piece in, because again, being in the contract business, we look at retention under a pretty fine microscope about what’s coming up for renewal but also about some of the tactics which are positive for us. The company, where the reps can bring forward deals into a current year, we try and take that into account as well, so that we make sure we give an effective quota to the sales reps.
Another benefit of sales operations is that often finance people will then acquiesce to quota being a sales function, because finance people will typically take the pie and divide it by X, and that’s what you get. I think considering not just what must be done with the plan, but how to divide the pie and who gets what slice of the pie and how big a slice of the pie can they consume, is critical to you being able to achieve the plans which are usually overstated, that you get tasked with.
The pipeline management process needs to be buyer-driven. So, your pipeline management system is accurate or inaccurate based on whether it’s driven by the buyer. Territory design process needs to be opportunity based. That’s a simple thing, but trust me, this is what I do for a living. I see a lot of territory design systems that are not opportunity based and because of that, you have imbalanced territories. Some reps have great territories, some reps have bad territories, et cetera, et cetera, so make it opportunity based.
And then the quota setting process, here’s the headline from Chris’s example. Do not let that be done by finance. I know my finance friends listening right now are going to be upset with me, but if you do that you’re going to have a peanut butter spread quota setting process. I have a $100M number and I have 100 reps, everybody gets a million-dollar quota. Well, that doesn’t work, the guy down town Manhattan is going to have more opportunity than the person in Mobile, Alabama. It must be well thought out and the way that you do that is you intelligently allocate it out, based on pipeline and territories, et cetera.
Chris, my friend, we are out of time. But I wanted to thank you on behalf of our audience, I know you’re a busy executive, and taking time out to come on the show today was not free. But your contribution back to our body of knowledge is helpful. Your peers learned from you today, so hopefully we can repay the favor in the future but thanks for coming on the show.
As a deeper resource, download our workbook, How to Make Your Number in 2017. Turn to the Sales Strategy section and flip to the Sales Operations phase on page 314 of the workbook.