Building a Sales Operations (SalesOps) team: A Guide to Structure and Metrics
by Mohammed Shehu
Every sales organization needs to strengthen its sales force, but achieving this goal is often challenging. Sales operations (or SalesOps) is an area that many sales leaders struggle with, especially when it comes to building the right team structure and tracking the right metrics.
When done right, a sales operations team can dramatically improve your sales performance and boost revenue growth. This article will explore what SalesOps is, how SaaS companies can build a winning sales operations team, and 7 key metrics to track.
Let’s get started.
What is SalesOps and why is it important?
SalesOps is the organization, coordination, and facilitation of activities that support the selling process. It includes all activities that take place before and after a deal is made.
SalesOps includes many areas such as:
- Lead generation & demand generation: Generating interest in your product, creating leads, and nurturing these into sales.
- Sales enablement: Training & educating every salesperson on your team on how to sell the product, its usage, and its features.
- Account planning and sales management: Planning the key strategies and tactics to sell to an account. This is particularly important if you target complex accounts with large budgets. It also involves managing and tracking existing accounts, billing, etc.
- Sales performance: Measuring the sales effectiveness of your team and product.
- Lead routing and grooming: Deciding which leads are ready for a salesperson to engage with and assigning those leads to specific reps in your sales department.
- Data quality management: Ensuring the relevance and accuracy of your sales & marketing data.
- Reporting and forecasting: Using data to forecast the growth of your SaaS pipeline and deriving insights into the ROI of various sales activities.
- Quoting and order processing: Creating quotes and processing orders for different accounts.
- Customer service management: Managing customer escalations and support tickets.
Simply put, a sales operations team is responsible for helping sales professionals to sell better and more cost-effectively to achieve revenue growth. Its end goal is to help your sales department be more productive by reducing any friction they face.
Your sales ops team structure and strategy are both important to get right because they touch on every department in your company such as marketing, product management & development, business development, and customer support functions.
Sales operations team structure: Roles & responsibilities
It is crucial for growing B2B companies to build effective sales operations teams. A good SalesOps team leads to revenue growth and faster scaling.
A typical sales ops unit is optimized for 3 things: strategy, insights, and execution. This is reflected in the kinds of SalesOps hires B2B companies can expect to make, including:
- Sales operations leader (Head or Manager level)
- Sales operations analyst
- Deal desk analyst
Let’s look at each role in turn.
Sales Operations Leader (Head or Manager level)
A sales operations leader is responsible for developing and leading the sales ops team. This includes overseeing the strategy, e.g., what data to capture, how to categorize it, with whom to share it, etc., in addition to driving execution. They are also responsible for sales training and managing the onboarding of new reps & analysts.
Ultimately, the sales operations leader is accountable for the sales ops unit achieving and exceeding its goals. This includes setting & tracking quarterly plans, KPIs, and sales forecasting. They are guided by (and in turn influence) the team’s sales methodology.
What to look for when hiring a sales operations leader
When hiring for this key sales operations role, the ideal candidate is someone with a combination of technical and analytical skills, strong business acumen, and leadership qualities. You ideally want a sales leader who knows the value of data and can support their sellers’ needs with an eye on their long-term growth.
Sales Operations Analyst
A sales operations analyst analyzes captured data points to help sales leadership derive insights & drive decision-making. They are responsible for prioritizing which data points to capture, assessing how well different data sources align with one another (i.e. identifying gaps, data quality issues, etc.), as well as determining how to use data to drive better outcomes.
What to look for when hiring a sales operations analyst
For this key sales operations role, a candidate should have a strong understanding of data & its application to decision-making. Ideally, they have experience running queries and formulas and working with sales leadership to identify data gaps to fill. Naturally, they should be adept at pulling data from your different martech and sales tools (such as your CRM, customer support dashboard, etc.).
Deal Desk Analyst
A deal desk analyst acts as a sales-facing subject matter expert on process, policy, and pricing related matters. They help sales teams to create complex orders and liaise with other key stakeholders in Accounting, Legal, and Product to structure enterprise deals.
Reporting to the Sales Ops Manager, a deal desk analyst escalates key issues where necessary and tracks deal progress in your team’s CRM. This includes things like a deal’s stage, probability, and booking amount.
What to look for when hiring a Deal Desk Analyst
You’re looking for a highly adaptable candidate with previous sales experience who can structure complex proposals, quotes, and contracts. Because this role requires liaising with different teams, hire a team player with great communication and collaboration skills. They should also have experience with CRM and sales coordination tools.
SalesOps metrics to track
As you begin to optimize your strategy and team structure, it’s important to evaluate how well your SalesOps unit is performing relative to its goals. Because sales operations teams encompass both strategy and execution, there are several key metrics within each of these categories to keep an eye on. Following are 7 common SalesOps metrics that every sales manager should track.
#1: Win rate
Your win rate is the percentage of total leads who become customers. It’s a “win” if the lead signs a contract and a “loss” otherwise.
There are two ways to improve your win rate:
- Generate more leads to close more deals (“increasing your activity”)
- Do a better job converting existing leads into sales (“increasing conversion”)
You can increase your conversion rate by adjusting lead scoring and sales qualification criteria so that you are only pursuing truly qualified leads.
Here’s how to calculate your win rate:
- Count the number of paid customers you have right now, on average, per period (e.g., 10/month).
- Count the number of qualified leads you had in that same timeframe (e.g., 100/month). That’s your total qualified leads for that period, or TQLs.
- Divide the number of customers by TQLs: in this case, the win rate is 10%.
#2: Sales cycle length
Your sales cycle length is how long it takes a prospect to make a buying decision. The longer the sales cycle, the greater the time and resources involved in close new business.
Sales cycles vary across different products, industries, and companies. In some product categories, it can be as short as a few weeks; in others, it may take several months. Companies have sales cycles that are relatively short when they sell relatively easy-to-use products (or those with a self-service feature). On the other hand, companies can experience longer sales cycles if their product is complex and difficult to use or when dealing with a conservative target audience.
#3: Average sale value
Your ‘average sale value’ measures how much money you’ve made from each customer over a certain period. It is calculated by taking the total revenue for a period and dividing it by the number of sales within that period. Here’s an example:
- For the first quarter of the year, your business made $25,000 in total revenue.
- During that same quarter, there were 100 sales.
- The average sale value is thus $250.
Once you have this figure, you can use it to analyze whether your average deal size is growing or shrinking and take steps to improve the situation. One way to increase your average sale value is to raise your prices. If your customers are happy with your product, you can add functionality or features that cost more but deliver extra value. You could also keep your core offering as-is and offer a premium version of it for those willing to pay extra.
#4: Customer acquisition cost (CAC)
This is the total cost of acquiring a customer. This includes not just the cost per lead in terms of paid advertising but also the cost of things like customer service and support.
Your CAC lets you know if you’re acquiring new customers as efficiently as possible over a certain period, which channels to focus on for more efficient customer acquisition, and whether you’re making a profit on each new customer or losing money (compared to CLTV).
You can calculate your CAC by taking your total advertising, marketing, sales, and promotion expenses for a certain period and dividing the total by the number of customers you acquired during that period. This is known as your blended CAC and differs from your paid CAC, which only focuses on paid advertising costs and doesn’t factor in operational and personnel costs.
CAC = Total sales & marketing costs + Other operational costs / Number of customers acquired
So what are some of the factors that affect your total CAC?
- Cost of sales compensation: If you’re paying your sales professionals high salaries, this will increase your blended CAC.
- Cost of marketing & advertising: If you are running expensive and large advertising campaigns then this will also increase your CAC.
- Retention Rate: This is how many customers renew their subscriptions compared to customer churn. A higher retention rate means that your CAC reduces over time for that retained cohort.
Read more about CAC and other key SaaS metrics here.
#5: Customer lifetime value (LTV)
Customer lifetime value (LTV) is the total amount of revenue you expect to generate from a customer over their tenure with your company. It’s calculated by multiplying the average revenue per user (ARPU) by their total tenure period.
LTV is a forward-looking metric. It projects what your company will generate from a customer based on the assumptions you make about churn, retention, and growth. Armed with a forecast for this metric, you can accurately calculate the return on your marketing spend (aka CAC), evaluate acquisition efforts, and prioritize development projects.
Let’s say Customer A has a $50 ARPU and their total tenure period is 6 months.
In that 6-month period, Customer A earns you $50 x 6 = $300 total revenue
For the same time period, Customer B has a $40 ARPU and their tenure is 2 months:
In that 2-month period, Customer B earns you $40 x 2 = $80 total revenue
Check out this article on CLTV and other SaaS metrics to learn more.
#6: Pipeline Quality
The pipeline quality metric indicates the percentage of potential leads that are likely to convert into revenue. A high value shows that you are doing a good job of finding and qualifying opportunities.
For example, if you have $10MM in opportunities but only $1MM are above a set threshold (e.g., 80% close probability), then your pipeline quality would be 10%. You can improve your pipeline quality metric by qualifying and scoring leads better.
It is essential to look at trends over time as well. If your pipeline quality has gone down over several periods it may be a result of you changing something in your sales or prospecting process. You’d then need to pinpoint the start of the decline and see which activities or changes you carried out during that period to assess their impact.
#7 Lead Velocity Rate (or Lead Momentum)
Your lead velocity rate measures the increase in newly qualified leads from one period to the next. This metric gives you an idea of how fast your sales pipeline is growing and can help you forecast revenue and business growth.
You can calculate your lead velocity rate by taking the difference in new leads, dividing it by the number of leads in the previous period, and multiplying the total by 100 to get the percentage rate.
Lead Velocity Rate = ( ( Number of leads in this period - Number of leads last period ) / Number of leads last period ) * 100
Month 1: 60 leads
Month 2: 80 leads
Lead velocity rate = ( ( 80 - 60 ) / 60 ) * 100 = 33.3%
To maintain lead momentum, sales and marketing must work together to ensure adequate lead generation and qualification.
Nail your SalesOps strategy
Building a sales operations team is one of the most important steps in the enterprise sales cycle. When done well, it can improve sales productivity, customer engagement, and the quality of sales data. The SalesOps team at a B2B sales company is responsible for creating and maintaining metrics to measure the impact of their work.
A crucial aspect of SalesOps is using the right tools to automate and coordinate sales activity across different accounts. Momentum helps enterprise sales teams sync their Salesforce data between Slack to access the info they need, when they need it.
We built this software for savvy sales reps and their teams to leverage the power of Salesforce through the convenience of Slack. Here’s what Momentum looks like in action:
To see how Momentum can supercharge your sales process, sign up for a demo today!