Operations

Sales Development
Sales Development Jonathan Poland

Sales development is a crucial part of the sales process that involves identifying potential buyers and developing qualified leads. This typically involves conducting research and planning, as well as networking and outreach efforts. By taking a proactive approach to identifying potential customers and building relationships with them, sales development professionals are able to help their companies generate new business and drive revenue growth.

Target Market
Defining your target market.

Sales Planning
A set of plans, targets and measurements for the sales process. Sales development objectives are primarily defined in terms of qualified leads that may be broken down by factors such as region, product, customer type and qualification score.

Research
Discovering information about your potential customers. Who are they? What are their needs? What is their financial position? Are they currently engaged by the competition? Who is buying right now?

Research Partners
Services that provide market and competitive intelligence. For example, an industry research organization that can provide a list of customers that are currently in the market for construction materials.

Data
Developing data and knowledge about customers, markets and competitors.

Technology
Development systems and tools to improve the efficiency and quality of the sales development process. For example, systems that automatically pull in financial information for leads.

Promotion
Marketing communication such as advertising designed to discover leads.

Promotion Partners
Developing and managing partners that can engage customers and generate leads.

Prospecting
The process of contacting potential buyers to generate leads.

Cultivation
In order to qualify leads, a sales development representative may require a fair amount of information. This may require carefully cultivating a relationship in a way that is helpful to closing the sale.

Needs Analysis
The sales development representative often begins the process of needs analysis.

Lead Qualification
Researching the needs, finances, reputation, budget and authority of leads to filter out those leads that are unlikely to close.

Handoff
Presenting everything you know about the customer and the competitive situation to the account executive who will handle closing.

Opportunities
The sales development representative may be involved in the first few meetings with the opportunity to transition the relationship. This is particularly common in complex B2B sales.

Post Sales
Post Sales Jonathan Poland

After a sale is made, post-sales processes kick in to fulfill the customer’s expectations and strengthen the relationship. This can include a range of activities, such as delivering the product or service, following up with the customer to ensure their satisfaction, and implementing marketing and sales strategies to retain the customer and potentially upsell in the future. Post-sales efforts are crucial for maintaining a positive reputation and fostering long-term customer loyalty.

Order Fulfillment
Delivering products and/or activating services. In many cases, a salesperson acts as a single point of contact for order delivery.

Billing & Collections
Billing the customer for orders and collecting revenue.

Cancellation & Changes
The process of configuring, changing or canceling an order. In many cases, a customer has a right to cancel an order for a period of time after a sale is completed. This is a delicate time that requires careful relationship management.

Returns
Processing return requests and the reverse logistics required to accept a return.

Complaints
Handling customer complaints including feedback that flows to you and posts to review sites and social media. For example, a fashion company that offers to replace a shirt for free with a different size when a customer complains in a review that the shirt doesn’t fit. The customer will then be likely to update their review to indicate they received a more satisfactory item.

Support
Providing support to help the customer get the most out of their purchase. This may include a number a customer can call and a website that provides information and tools.

Service Delivery
The day-do-day process of delivering a service. For example, the process of providing a software platform for customers.

Incident Management
Incident management is a component of service delivery that involves investigating and resolving issues with a service. It is common for salespeople to be involved in this process for high value accounts. For example, a business customer that is playing a million dollars a month to a telecom provider will expect their sales representative to be on top of any problems with the service.

Relationship Management
The general process of building and sustaining the relationship with the customer. For example, a salesperson who calls a customer to offer them tickets to an industry conference to build out a relationship.

Upselling & Cross Selling
The ongoing process of convincing a customer to upgrade or make new purchases.

Customer Referrals
Encouraging satisfied customers to refer business to you such as parent companies, sister companies, partners, friends and family.

Maintenance & Supplies
The delivery of maintenance services and supplies.

End-of-life
Helping a customer deal with the end-of-support and end-of-life of products and services.

Customer Needs Anlaysis
Customer Needs Anlaysis Jonathan Poland

Customer needs analysis is the process of identifying and understanding the needs and wants of customers in order to develop products and services that effectively address them. By engaging with customers and gaining a deep understanding of their requirements, companies can create products and services that are tailored to meet their needs and increase the chances of success in the market. This process is often the first step in product development or sales, as it provides a foundation for companies to build upon and ensure that they are meeting the needs of their target audience.

Business Needs Analysis
Analysis of business needs such as a firm that needs to increase the efficiency of a production line.

User Needs Analysis
Discovering the needs of end-users. For example, users that require an easy to use screen to complete a common task that they perform hundreds of times a week.

Pain Points
A needs analysis may build requirements from the ground up. However, it is common to start with pain points with the current situation. For example, a software salesperson might start with the problems a firm is experiencing their current software and business processes.

Goals & Objectives
Listing out the goals and objectives of an organization related to the analysis. For example, a firm might be purchasing solar panels to reduce costs or to reduce their impact on the environment.

Use Cases
Use cases and similar techniques such as user stories that document requirements from the user perspective.

Edge Cases
Identify customer use cases at the extremes of possibilities. For example, a customer usually processes 1 million transactions a day but on rare occasions has processed as many as 44 million. Edge cases are a common source of unique selling propositions.

Functions
Listing out the things that the customer wants to accomplish.

Expectations
Discovering basic expectations that the customer assumes are always included in a product or service. For example, a customer may feel its obvious that sales software serves as a customer database. Such unstated assumptions can lead to customer rejection of products and services as they are generally unhappy when an expectation isn’t met.

Perceptions
Capturing perceptions of products, services and experiences. For example, a customer who perceives chemical ingredients in food products as unhealthy or unattractive.

Quality
Listing the things that define quality in the eyes of the customer.

Reverse Quality
Things that are commonly added to products, services or experiences that customers don’t want. For example, a navigation system that displays a legal disclaimer every time you use it.

Unstated Needs
If you ask customers to list their needs, they often miss standard functions, obvious needs and popular features. As such, it is helpful to use a list of common needs in the problem space to validate against. For example, a software salesperson might have a list of the 100 most commonly demanded functions and features that they reference throughout needs analysis with a customer. If you point to something that the customer misses they will often agree it is an important requirement.

Conflicting Needs
Different representatives of the customer may list needs that are seemingly contradictory. For example, one representative of the customer may require that a solar system fit in a small area while another may require that it have 100 megawatt of capacity. Needs analysis doesn’t tackle inconsistencies and leaves them intact. Inconsistencies are often useful in design or in structuring customer choices.

Secret Needs
Needs that customers don’t want to talk about but need nonetheless. If a business is purchasing software, employees will typically state needs related to business functions. However, they may secretly evaluate software according to the likelihood its implementation will cause them extra overtime work.

Delight Needs
Most customer needs are basic expectations that don’t impress the customer much when they are met. Delight needs are the small set of needs that customers can get excited about such that they significantly influence the customer. A customer purchasing a house may be relatively unexcited about architecture, interiors and equipment but delighted at the prospect of living in an area that’s considered posh.

Pre-Sales
Pre-Sales Jonathan Poland

The term “pre-sales” can refer to a range of different things depending on the industry in which it is used. In some cases, it might refer to business processes or organizational structures that are focused on preparing for and supporting the sales process. In other industries, it might refer to specific product testing techniques or direct sales methods that are used to generate leads and engage potential customers. Overall, the term pre-sales typically refers to activities or practices that are focused on supporting and advancing the sales process, whether that involves preparing for sales meetings, conducting product demos, or developing marketing materials.

Here are a few examples of what the term “pre-sales” might refer to in different industries:

  1. In the software industry, pre-sales might refer to activities such as conducting product demonstrations, preparing proposal documents, and providing technical support to sales teams as they engage with potential customers.
  2. In the automotive industry, pre-sales might refer to the process of testing and evaluating new vehicles before they are released to the market. This could include activities such as road testing, crash testing, and conducting durability and reliability tests.
  3. In the real estate industry, pre-sales might refer to the process of marketing and selling new development projects before they are completed. This could include activities such as conducting market research, developing marketing materials, and hosting sales events to attract potential buyers.
  4. In the retail industry, pre-sales might refer to the process of promoting and selling products before they are available for purchase. This could include activities such as pre-order campaigns, limited-time offers, and special promotions for early adopters.

Revenue Operations
Revenue Operations Jonathan Poland

Revenue operations, also known as RevOps, is the practice of overseeing and optimizing an organization’s core sales processes. This includes managing and coordinating all activities related to the sales team, as well as integrating sales efforts with marketing and business operations. By taking a holistic approach to managing sales processes, companies can improve efficiency, increase revenue, and drive growth.

Effective revenue operations involves implementing strategies and technologies that streamline and automate sales processes, as well as provide real-time insights and data-driven decision making. This allows organizations to optimize their sales efforts, identify opportunities for growth, and quickly respond to market changes.

In addition to improving sales performance, revenue operations can also enhance collaboration and communication within an organization. By bringing together various functional areas and providing a clear framework for sales activities, RevOps can help teams work together more effectively and achieve their goals.

Overall, revenue operations is a crucial component of any successful sales organization. By implementing effective RevOps strategies and technologies, companies can improve their sales processes, increase revenue, and drive growth. The following are common elements of revenue operations.

Sales Strategy

Development of a strategy to achieve revenue targets in an environment of competition and constraints.

Sales Planning

Sales planning is the process of implementing sales strategy.

Sales Processes

The administration and improvement of sales processes such as quote-to-cash.

Sales Technology

Sales processes are completely tied to systems and applications such as CRM and sales force automation. As such, it is common for revenue operations to administer systems from a business perspective and to sponsor projects to improve sales technology.

Training

Training for sales, marketing and operations employees in areas such as sales processes and technology.

Product Development

In many cases, revenue operations is involved in product development. Sales is often viewed as a key stakeholder in product development efforts as they can evaluate if a product is likely to sell.

Go-to-Market

Go-to-market is the process of launching and selling a new or improved product or service.

Quota Management

Setting targets for sales teams and sales representatives.

Compensation Management

Developing, communicating and administering sales incentive plans.

Campaign Management

The development of sales campaigns. This may involve coordination with marketing teams and operations. For example, a sales campaign may have promotional support and require increased production or stock levels.

Sales Forecasting

Forecasting sales volumes and revenue.

Measures & Metrics

Measuring sales using techniques such as management accounting and sales metrics. For example, measuring customer lifetime value and churn rate to evaluate efforts to improve customer satisfaction.

Reporting

Communicating appropriate sales metrics on a regular interval to executive management, sales teams and other stakeholders such as business units.

Alignment

Revenue operations works to align the goals, strategy, systems, processes, measurements, actions, projects and communications of the sales team with marketing, business units, business operations and executive management.

Sales & Operations Planning

Sales and operations planning is the process of aligning sales with production. For example, an internet company that forecasts sales of 20,000 internet connections next month that works with network operations to plan to install these services in a timely manner.

Lead Management

The generation, scoring and assignment of sales leads.

Proposal Management

The development of proposals that meet customer needs and have an attractive revenue structure.

Opportunity Management

Managing the process of engaging customers, discovering their needs, developing proposals, pitching deals, negotiating and closing.

Sales Pipeline

Managing the end-to-end sales pipeline from lead generation to close.

Contact Management

Ensuring that sales people enter their contacts in your sales systems so that the firm retains this information when the sales person leaves.

Deal Desk

Structuring deals and setting prices. For example, an approvals process for high revenue low margin deals.

Post Sales

Post sales is the process of delivering your obligations to the customer after closing. Sales is often heavily involved in areas such as order fulfillment and customer service in order to reduce churn and to identify new opportunities for upselling and cross-selling.

Order Management

The process of delivering the order to the customer.

Relationship Management

The process of developing and sustaining relationships with customers. For example, salespeople may remain the primary contact for customers after the order has been delivered to build out the relationship.

Sales and Operations Planning
Sales and Operations Planning Jonathan Poland

Sales and operations planning (S&OP) is a process used by companies to effectively align their sales plans with their operational capabilities. It involves the integration of various functional areas of the business, including sales, marketing, finance, and operations, in order to develop a cohesive plan that aligns with the company’s overall strategic objectives.

The goal of S&OP is to ensure that the company has the right amount of resources, such as raw materials, labor, and equipment, in place to meet the demand for its products or services. By identifying potential issues and bottlenecks in the supply chain, companies can take steps to mitigate them and ensure that they can meet customer demand.

S&OP is typically carried out on a monthly or quarterly basis, with regular meetings held between the various functional areas of the business to review the current sales forecast and assess the impact on operations. This process allows the company to make any necessary adjustments to the plan in order to meet the changing needs of the business.

There are several benefits to implementing an S&OP process, including:

  • Improved forecasting accuracy, which can help the company better align its production and inventory levels with customer demand.
  • Increased efficiency, as the S&OP process helps the company identify and address potential bottlenecks in the supply chain.
  • Better communication and collaboration between functional areas of the business, which can lead to improved decision-making and more effective use of resources.
  • Increased customer satisfaction, as the S&OP process helps the company ensure that it can meet customer demand in a timely and efficient manner.

Overall, Sales and operations planning is a crucial process for companies looking to effectively align their sales and operational capabilities in order to achieve their strategic objectives. By using S&OP, companies can improve their forecasting accuracy, increase efficiency, and enhance collaboration between functional areas of the business, ultimately leading to better decision-making and improved customer satisfaction.

Sales Goals
Sales Goals Jonathan Poland

Sales goals are targets for the revenue or units sold that a sales team or individual is expected to achieve within a specific time period. These targets are often set by sales managers and are used to motivate and guide the sales team to perform at their best. Sales goals can be set at various levels, from individual sales representatives to the entire sales department or organization.

Setting effective sales goals involves a number of key steps. First, sales managers should assess the market conditions and the team’s capabilities to determine realistic and achievable targets. Next, they should break down the overall goal into smaller, more manageable targets for each member of the sales team. This can help to ensure that everyone is working towards the same goals and that their efforts are coordinated and aligned.

Sales goals should be specific, measurable, attainable, relevant, and time-bound (SMART). This means that they should be clear and well-defined, with specific targets and metrics for success. They should also be challenging but achievable, and should align with the overall goals and objectives of the business. Finally, they should have a specific time frame for completion, so that progress can be tracked and measured.

In summary, sales goals are an important tool for sales managers to motivate and guide their teams. By setting clear, measurable, and achievable goals, sales managers can help their teams to focus on the right activities and drive better sales performance for the business. The following are some examples.

Revenue

Revenue targets for products, teams and sales people. These are often incentivized with a system of sales quotas whereby commissions are higher for sales people who meet monthly, quarterly and annual targets. For example, a salesperson may have a base salary, a 2% regular commission rate and a 4% commission for each month they exceed a quota of $270,000 in revenue.

Monthly Recurring Revenue

Sales of services and subscriptions may have targets based on monthly recurring revenue (MRR). For example, a salesperson with a quota of $20,000 in monthly recurring revenue with a commission of 10% of MRR if they miss quota and commission of 50% of MRR if they hit quota.

Annual Contract Value

Recurring revenue or long term contracts may be converted to an annual measurement known as annual contract value for the purpose of targets and commissions. For example, a salesperson may have a monthly target of $400,000 in annual contract value. To convert monthly recurring revenue to annual contract value you multiply by 12. For example, $7000 in monthly recurring revenue represents an annual contract value of $84,000. One time sales such as an initial cost of $48,000 can simply be added to annual contract value. This allows targets to include both recurring and non-recurring revenue as a single number.

Units

Revenue goals may be stated in units. For example, a luxury car salesperson who is given a target to sell 20 vehicles in a quarter.

Margins

Where prices are negotiated, sales managers may be given gross margin targets. This requires the manager to balance revenue targets with the need for sales to be profitable. For example, a sales manager in an industrial equipment firm may be given an annual gross margin target of 40% together with a team sales target of $40 million.

Customer Acquisition Cost

Customer acquisition cost is the cost to close a deal with a customer including all marketing and sales costs that can be attributed to the deal. This may include all salaries and commissions paid to sales people and is a way to measure the cost of the end-to-end marketing and sales process. For example, a solar panel systems sales team that has a target average customer acquisition cost of $2400.

Customer Defection Rate

The percentage of your customers who cancel their service or fail to make a regular purchase. For example, a consulting sales team with a target to reduce monthly customer defections from 3% of customers to 2%.

Customer Lifetime Value

If a sales team are responsible for maintaining customer relationships it is common to give teams and salespeople a target for the estimated value of their accounts expressed as customer lifetime value. This captures initial sales, upselling, cross-selling and customer retention efforts in a single metric. For example, a telecom services sales team may target an 18% improvement in customer lifetime value by upselling new services and improving customer satisfaction to reduce cancellations.

Share of Wallet

The percentage of a customer’s total spend in a product category that goes to your products. For example, an IT services company may target an average of 7% share of wallet by building relationships at large firms to upsell. Share of wallet is also known as account penetration.

Win Rate

The percentage of opportunities, quotes or proposals that are closed. For example, a solution sales team may target at win rate of 30%.

Customer Satisfaction

If sales people are the primary contact point with customers such that they represent your product and brand they may be evaluated based on customer satisfaction. For example, a cloud software salesperson who is expected to be visible when customers have a question or problem to sustain customer relationships may have a target of 80% customer satisfaction.

Qualified Leads

The number of qualified leads generated in a quarter. Ensures a full pipeline of opportunities. It is also common to set a target for the average quality of leads. For example, a sales operations team with a target to generate 100 qualified leads a month with a score of at least 77% on a qualification scale.

Cycle Time

The average time it takes from lead-to-opportunity, opportunity-to-close or lead-to-close. For example, a sales team with a target opportunity-to-close of 3 weeks. This is a secondary metric that isn’t often taken too seriously but can indicate the amount of effort that is taken to move all opportunities forward.

Activities Per Month

The sales activities per month of a sales person or team. This may be all activities or specific types of activities. For example, a sales person with a target of 25 customer visits per month.

Sales Planning
Sales Planning Jonathan Poland

Sales planning is the process of setting revenue and unit targets for a sales team, and developing a plan to achieve those targets. This process is typically led by sales managers and involves analyzing market conditions, assessing the sales team’s capabilities, and identifying strategies and tactics to achieve the desired sales performance. By creating a detailed sales plan, businesses can ensure that their sales teams are focused on the right goals and activities, and that they have the resources and support needed to achieve those goals. This can help sales teams to be more effective and efficient in their efforts, and ultimately drive better sales performance for the business. Here are the elements.

Situation Analysis
Assessing the current situation with techniques such as a SWOT analysis.

Objectives & Goals
Developing targets.

Strategy
Determining how you will achieve targets. Includes details such as a sales incentive plan.

S&OP
Aligning your plan with operations. For examle, using initial sales forecasts to plan production.

Sales Budget
Developing a budget for the team based on the strategy.

Communicate & Engage
Engage sales teams to communicate strategy and build support for the plan. Make changes to strategy and incentive plan if the team isn’t behind it.

Controls & Monitoring
Implement the plan with controls such as weekly sales meetings and monitoring such as weekly sales reports.

Sales Quota
Sales Quota Jonathan Poland

A sales quota is a target for the revenue or units sold that a sales department, team, or individual is expected to achieve within a specific time period. These targets are often used to motivate sales teams and individuals to perform at their best and can be tied to incentives and commissions. Setting realistic and achievable sales quotas is an important part of sales management, as overly aggressive quotas can demotivate sales teams and decrease performance. It is important for sales managers to strike a balance between challenging their teams and setting achievable targets.

Here are a few examples of sales quotas:

  1. A sales representative is expected to generate $20,000 in revenue from new customer acquisitions within the next quarter.
  2. A sales team is expected to sell a total of 1,000 units of a particular product within the next month.
  3. A department is expected to achieve a minimum gross margin of 30% on all sales within the next quarter.
  4. A company is expected to generate $50 million in total revenue from all of its sales teams combined within the next year.
  5. An individual is expected to make a minimum of 10 sales calls per day and close at least two deals per week.

Sales Data
Sales Data Jonathan Poland

Sales data is a type of business intelligence that provides information about the performance of a company’s sales activities. This information can include the number of sales made, the value of those sales, the products or services that were sold, and the customer demographics of those who made purchases. Sales data is typically used by businesses to track and analyze the success of their sales efforts, identify trends and patterns in their sales, and make data-driven decisions to improve their sales performance.

Sales data can be collected in a variety of ways, including through point-of-sale systems, customer relationship management (CRM) software, and online sales platforms. This data is often stored in a database or spreadsheet, where it can be analyzed and visualized to help businesses understand their sales performance.

There are many different ways to analyze sales data, including by looking at overall sales trends over time, comparing sales performance across different products or services, and analyzing the effectiveness of different sales strategies and tactics. By doing this, businesses can gain valuable insights into their sales performance and make informed decisions about how to improve their sales efforts.

In summary, sales data is an important tool for businesses to track and understand the success of their sales activities. By analyzing this data, businesses can identify trends and patterns in their sales performance, compare their performance to that of their competitors, and make data-driven decisions to improve their sales efforts.

Market Data & Forecasts
Sales planning data such as market data that is used to generate sales forecasts.

Accounts
Customer details such as name and address.

Contacts
Contacts for each employee of the customer who is involved in decision making, purchasing, administration and technical solutions related to your products and services.

Leads
Potential customers including details related to their industry, financial statements and other data used to qualify leads.

Opportunities
Potential customers who you are actively pursuing.

Activities
Tracking meetings and other interactions with the customer.

Knowledge
Documents such as sales collaterals, request for proposals and proposals.

Quotes
Offers that are communicated to the customer including prices and terms.

Orders
Orders represent closed sales. Revenue is calculated using order data. Margins are calculated using order data and cost of sales data.

Campaigns
The details of sales campaigns such as promotional pricing events. Allows sales management to look at the historical and current results of campaigns.

Sales Teams
Data related to sales teams and salespeople that supports calculation of commissions and performance management. For example, each order may identify the salespeople who closed the deal.

Territories & Channels
Tracking sales territories and channels.

Products
A catalog of your products and services.

Services
Details of the customer’s current services.

Contracts
Contracts with customers such as an SLA.

Billing
Invoices and payments.

Customer Service
Customer service interactions with customers such as a complaint. Used to manage customer relationships to improve customer lifetime value.

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