Sales and Operations Planning (S&OP)

Sales operations as a function started around the 1970s when it solely focused on analyzing data to provide insights and guidance to field sales representatives. One of the first known sales operations teams was established by the Xerox Company in the 1970s. Once known only for number crunching, today, sales operations professionals are in charge of a range of tasks and behind-the-scenes activities.

The scope of sales operations is much wider due to reshaped priorities that include supporting and enabling the front-line sales team to sell better and more effectively by providing strategic direction and automating the sales process. Besides, the importance of sales operations has increased due to extended buying cycles and sophisticated sales technologies. What started mainly as a fire-fighting operation has quickly gained the prominence of being strategic and proactive in preventing problems even before they arise.

What is Sales Operations?

Although the definition of sales operation does vary according to organizations, the sole purpose of the practice is to serve as a critical link between the development and execution of sales strategy and the go-to-market strategy. A major objective is to streamline sales operations management allowing sales representatives to focus on selling and enhance the experience of prospects to build trust towards the company/ brand. In the majority of cases, it is about helping increase the productivity and effectiveness of the sales team. It means to imagine your sales team as being elite runners who would not achieve their peak performance without the guidance from their coach in this case ‘sales operations’. Overall, it is about evaluating options and making sales decisions.

Advantages Associated with Sales Operations

These are the crucial advantages of having a sales operations team in your organization:

  • Increases overall sales to improve the bottom line & smoothen the sales process
  •  Increased productivity due to strategic sales service models and territory planning.
  • Streamlines repetitive tasks allowing sales representatives to focus on selling.
  • Improved recruiting and hiring practices with effective on-boarding and employee training programs
  • Data-led approach to strategies and decision-making

Importance of Sales Operations

There are many components to sales operations and understanding its importance can make the overall picture much clearer. These include:

  • Need for Strategy: Your sales team is good with sales but that in no way means that it would be equally good at devising strategy. Sales operations can make the difference between success and failure through a well-define selling strategy.
  • Non-Sales Activities: The sales team should remain focused on generating sales and non-sales activities such as generating leads, running reports and managing CRM must be done by sales operations.
  • Crunching Data: Often salespeople do not come with the skill sets to analyze the sizable amount of data produced by modern organizations to devise actionable insights. This is where sales operations are becoming increasingly relevant in organizations.
  •  Quick Technology Changes: Technology changes quickly with frequent upgrades and sales operations play an important link in getting sales reps to remain updated on the latest in sales technology.
  •  Inter-departmental decision-making: Analyzed data with actionable insights from sales operations can influence decisions in different departments within the organization. Sales operation is well-positioned to share vital data across the organization.
  • Finalizing Pricing: There are many contenders within the organization who believe they should be in charge of pricing but in reality, it remains a sales issue. And sales ops are best equipped at formulating a price structure to maximize closing rate.  

Critical Processes Associated with Sales Operations

Although the scope of sales operations is quite wide, we would like to throw light on the critical processes that make sales operations, these are:

I) Lead Management

Lead management is the process of tracking and managing potential customers and it generally consists of a 4-stage process:

  • Lead Generation: Businesses create interest among the audience and generate leads through a variety of marketing tactics. This includes social media, PR campaigns and advertisements.
  • Customer Inquiry: Influenced by the marketing tactic, a potential customer contacts a company creating a sales lead.
  • Grading Leads: The leads that come in are sorted according to validity and prioritized according to the likelihood of converting into a customer and is dispersed among the sales reps to be contacted.
  • Lead Nurturing: Contacted prospects are followed up through phone calls or through a drip marketing campaign.

II) Deal Management

It is a strategy of executing deal workflows by establishing deal parameters. These parameters include customer history, product status, discount level, operational constraints, and team member roles, and so on. It encompasses all the steps in the deal-making process and can include everything from a cold call to a formal pitch to closing the deal. Basically, it is about converting a qualified lead until it becomes a customer.

III) Forecasting and Strategy

Sales forecasting is fundamental to sales operations and the entire organization. The inability to forecast sales will prevent the company from taking any decision on supply, finances, and recommendations on improving profitability. An organization that is not able to forecast demand for products or services will base all its future actions on plain guesswork without any foresight. This makes sales forecasting integral to sales operations.

IV) Sales Data Management

 This pertains to the evaluation and analysis of sales data from across the organization to determine the effectiveness of a product, campaign, and sales process. With precise data management, sales ops are able to determine and validate the success of a product or service to affect revenue generation. Alternatively, they can devise and implement a new sales plan or process if the data is showing results on the downside.

V) Sales Operations Team Structure

Sales operations are known to influence the structure and operations of the sales team to maximize efficiency and impact. Traditionally, the entire sales division would be divided into three blocks namely – sales operations, pure sales and account management. Out of this, the sales operations team would consist of a sales operation manager who would be handling sales operation reps and analysts. The manager would be directly reporting to the Sales-VP in the organization.

VI) Sales Analytics and KPI Mapping

Once the sales operation program is in play, it is vital to track associated KPIs to ensure everything is going as per schedule. Here are 6-metrics that allow you to gauge whether the sales operation model is working. These are:

  • Close Rate: It depicts the sales made divided by the number of people to whom the pitch was made. This spells out the effectiveness of the sales team.
  •  Customer Acquisition Cost: The amount of money spent on marketing and sales divided by the number of new customers acquired in a defined time frame. A lesser value is ideal.
  •  Customer Lifetime Value (LTV): This is the average revenue generated from a customer divided by the number of customers opting out.
  • Sales Pipeline Metrics: A variety of measurements that show how many leads and prospects are moving through the sales funnel and where they are.
  • Sales Cycle Length: Average time spent between contacting the prospect for the first time and closing the deal.
  • Time Spent Selling: The amount of time spent by the sales team in a meeting or phone call minus the time spent on administrative tasks.

How Sales Process Automation helps Business?

Sales process automation can really be a force multiplier for sales teams. Automation helps in streamlining manual, tedious and time-consuming tasks in the sales process, enabling sales teams to be more committed to the core focus area of selling. Some ways in which sales process automation can be done is as follows:

  • Automated Marketing: The first contact with a prospect is crucial for nurturing a business relationship, but doing it manually can be daunting. The easier way to do this is through automation of the first contact process by sending automated marketing needs assessments to prospective clients.
  • Automated Client Outreach: The follow-up correspondence with a client can be vital to the sustenance of the business relationship. By automating the process, it becomes more effective and without errors or lapses as against doing it through manual means.
  • Pipeline Management: Managing a sales pipeline and keeping it up-to-date through manual data entry is cumbersome. Automation can altogether eliminate the need for manual entry and provide a better avenue to manage and track opportunities in the pipeline with an automated dashboard.
  • Lead Tracking: It becomes entirely necessary to track your prospects’ every move and how they engage with your business. Such tracking can be enhanced through automation paving the way for the right opportunities for sales pitches and timing of business outreach.

How SOPs help the Sales Operations Team?

While SOPs can streamline sales operations tasks and reduce the challenges associated with sales operations. Key challenges which sales operations policies and procedures can help overcome are as follows:

  • Overlapping responsibilities: At times, within organizations, there are chances of overlap and duplication of efforts on account of vaguely defined responsibilities.
  • Tangled Sales Process: If the sales and operations execution process (s&op process) within the organization is not structured enough, it becomes a daunting proposition for sales operations to take charge and optimize it.
  • Undefined Reporting Structure: The amount of freedom given to the manager in a sales operation team becomes very restrictive on paper without the involvement of a higher designation like VP-Sales. This becomes an impediment for easy adoption and implementation of new ideas.
  • Collaboration Hindrances: For a sales operation team to function efficiently, it must have the freedom to collaborate with different departments within the organization which at times is not clearly defined.

Each of these factors has a role in streamlining the sales operations process flow unless standardized documented SOPs are articulated; it becomes difficult for the sales operation team from functioning smoothly to their full potential. With the sales department, standard operating procedures: responsibilities, reporting structures, and scope of the department becomes clearer enabling sales operation to bring in changes and visible results in a relatively quick time.

Why BPX for defining SOPs for Sales Operations Planning i.e. S&OP process?  

Business Process Xperts (BPX) comes with a history of being one of the leading firms for sales operation consulting and sales operation consulting firms. BPX has the expertise and knowledge for the sales and operation planning process, sales operation management, and SOP sales and operation planning. We are equipped at providing a standard operating procedure for the sales department, SOP for sales, SOP for the sales process, SOP for the sales department, Standard operating procedure for sales and marketing.

BPX comes with a history of having helped companies in developing and implementing SOPs across business functions. BPX experience with past clients gives the confidence for helping large, mid-size, and small business outfit in the most optimum manner with SOPs. Our structured methodology for developing SOPs comes from our experience of having dealt with a variety of clients across different industries.