The Rosetta Stone of Commercial Operations
CEO India|January 2020
Winning sales organisations excel at these five essential capabilities
Chris Dent, Greg Callahan And Thomas Whiteley
In most companies, the sales operations function has failed to keep up with an increasingly complex selling environment. This group has traditionally focused on activities such as forecasting and incentive management, but with the proliferation of digital tools, digital engagement models and multichannel selling motions, sales operations must evolve. That’s why more business-to-business (B2B) companies have been transforming these operations. The reconfigured “commercial operations” function now performs new activities and has a broader, more strategic mandate.

In their search to define this new commercial operations function, sales executives often want to tinker with organisational design. But, in fact, success is less about where the capabilities reside and more about tightly linking the capabilities to the sales and marketing organisations.

Bain & Company and Dynata research on 200 B2B companies in the US, combined with our experience working with hundreds of sales organisations, find that 14 capabilities underpin the commercial operations group (see Figure 1).

Sales operations groups have traditionally covered some of these capabilities, such as the three capabilities in the category of sales and marketing execution. Now, for the first time, commercial operations groups are taking up some of the other capabilities, such as those under the commercial strategy and planning category.

While investing in all capabilities might be ideal, sales leaders with finite budgets and tight time frames rarely have that luxury. They look instead for indicators about where they can get the highest return on investment (ROI). Our data analysis, again, reinforced by long experience working with sales organisations, identifies five capabilities that are fundamental table stakes for all B2B companies:

1. Market opportunity definition

2. Go-to-market strategy and design

3. Incentives and goal setting

4. Pipeline and forecast support

5. Sales enablement and training

Our analysis finds that leading companies (defined as the top 15 per cent in revenue and market share growth) are 50 per cent more likely than laggards (defined as the bottom 15 per cent in revenue and market share growth), on average, to have best-inclass capabilities. And the fastest-growing companies are four times more likely than laggards, on average, to have best-in-class performance on these five foundational capabilities. Let’s explore each in turn.

FIVE CAPABILITIES FORM THE FOUNDATION

1. Market opportunity definition.

Identifying target customers and their relative importance is easy. Digging deeper, though, few companies know the total spending or lifetime value of each customer. They should ask, do we know the potential of each sales representative’s account portfolio? Is most of the value concentrated in a few representatives’ portfolios, where customers are not adequately served, or have we spread it out to ensure that each account gets the requisite amount of attention to maximise value?

Leading sales organisations do not leave opportunity definition to chance. They build a commercial operations group that owns the account and prospect database, composed of internal and external data, and keeps it up to date. Their algorithms and heuristics shape the data into an estimate of each customer’s total opportunity. A medical device company might rely on, among other things, procedural data, such as how many angiograms each hospital performs, to estimate potential demand and measure current share. An office supplies company could track demand catalysts, such as how many whitecollar workers are employed at each location of a customer.

2. Go-to-market strategy and design.

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