In any large company, multiple stakeholders hold both interest in and influence on sales productivity. However, ownership and responsibility for sales productivity is frequently a hot potato…with sales, marketing, finance, HR and others all wanting input but not blame.
It turns out that we’re not even sure what we mean by sales productivity. And before we can properly identify ownership, we need to know what we’re talking about! When I interviewed clients years ago at IDC, most had a fuzzy notion, at best, of what they meant by sales productivity. Typical responses included:
- Revenue generation
- Profitable selling
- Quota attainment
- Number of calls per day
In response, we developed a formal definition of sales productivity, to include:
- Sales Effectiveness
- Sales Efficiency
- Sales Revenue
- Sales Volume
- Sales Profitability
These five components of sales productivity provide a strong measure of sales health and can be applied at the individual rep, group, or organization level. We then leveraged this definition to build the IDC Sales Productivity Framework (available on SlideShare.net here), which includes specific focus on people/organizations, processes, technology and data. The Framework highlights the various productivity levers that influence sales productivity.
- At the individual level, some of the key productivity levers include hiring/onboarding, training, first line manager coaching, and sales enablement.
- At the group or organization levels, key productivity levers include forecasting/quota setting, pipeline management, coverage model and channel strategy, etc.
Many of our clients adopted the IDC Sales Productivity Framework as a cornerstone for discussing sales investments across internal organizations. And it turns out that the people facilitating those conversations typically hold the title of sales operations or sales excellence. One client, a GM of Sales Excellence in Microsoft’s Enterprise business unit, likened his work across various corporate and field organizations to playing an enterprise version of tri-dimensional chess.
We found, not surprisingly, that the choice of levers depends on multiple factors, including organizational size and maturity, target customer firmographics/psychographics, stage of product life-cycle, market and competitive issues, time of fiscal year, and more. A company may invest more heavily in talent management as it is staffing up to focus on new markets. Or it may move investments to customer intelligence as it seeks to expand share of wallet in key accounts or to improve service or subscription renewal rates.
So…Who Owns Sales Productivity?
Managing sales productivity across an enterprise requires the following:
- Strong process orientation
- Ability to work across organizations and to facilitate/direct complex projects with multiple stakeholders
- Comfort with managing and interpreting multiple (and sometimes contradictory) data streams
- Ability to leverage technology to automate/extend the appropriate processes
- Long term investment view (rather than being held to monthly/quarterly/annual targets) combined with a pragmatic approach to measuring impact
Welcome to Sales Operations
While the role of sales operations initially focused tactical and administrative (managing contracts, territories, expense reimbursements), over the past twenty years it has matured into a strategic function. Sitting between sales management, marketing, finance and HR, sales operations is the glue that sticks these organizations together and facilitates the development and management of the processes underpinning sales productivity.
More often than not, the sales operations function lives inside the sales organization. Even when it doesn’t, it has strong ties to sales. When I ran sales operations at Phase Forward, I reported to the CMO…and spent most of my time in service to the sales organization.
When I engage with clients to help address sales or revenue issues, the root cause analysis invariably leads to conversations with sales operations executives. They have ownership of many of the processes and visibility on much of the relevant data. They also typically have strong working relationships across marketing, sales management, HR and finance, and can facilitate working sessions with multiple stakeholders to explore and address the specific issue.
Sales operations remains an emerging function, with an increasing focus on leveraging external data. It also plays a critical role in sales productivity…so if you went to Club last year, send a thank you note to your sales ops team!