Challenges of Scaling Sales Ops
Anyone with experience in a high growth startup can instantly name the one team they could not live without: Sales Ops. Without a high functioning sales ops (or Rev. Ops) team, every aspect of sales breaks down, becomes stuck in bottlenecks and is tormented by numerous re-work. Boston Consulting Group highlights the importance of this function noting that companies deploying sales/rev ops are seeing:
100% to 200% increases in digital marketing ROI
- 10% to 20% increases in sales productivity
- 10% increases in lead acceptance
- 15% to 20% increases in internal customer satisfaction
- 30% reductions in GTM expenses[i]
However, sales-ops has one of the most challenging roles for startups as their connective function is filled with many time-sensitive responsibilities and tasks. Even more challenging, the hats sales ops teams wear often change, and urgency is always front and center. Modern sales ops teams not only help provide the systems, tools and processes for account executives to source, close and manage clients, but frequently in startups these same teams are responsible for many critical internal functions including salesperson on-boarding/offboarding, compensation and data for forecasting. Such a demanding function can feel overwhelming for many employees and create friction between go-to-market teams.
In the past, startups would scale their sales-ops function through hiring. But, due to the current macro-economic environment this is likely not feasible as organizations aim to conserve cash. This raises and important question: How can a startup continue to support it’s revenue growth by maintaining a high-functioning sales ops organization while keeping costs low?
Grow, Conserve Cash and Drive Towards Profitability ASAP
The recent crash in valuations of growth stocks and current macro-economic environment ended the “Blitzscaling” or pure growth focus strategy of many startups. Instead, prominent venture capital firms are giving tough advice to their portfolio companies encouraging a focus on limiting expenses and driving towards profitability sooner than previously planned.
“We are just beginning to see how the increasing cost of money flows through to impact the real economy. If you’re stepping back and thinking twice, it’s not just you. Belt tightening and priority reassessment will have second- and third-order effects, as one company’s costs represent someone else’s revenue or purchasing power…” – Sequoia [ii]
Additionally, founders are being warned that the ability to raise capital may be delayed, making cash a priority. But, despite this, growth targets haven’t diminished. This then creates a conundrum for executives and sales-ops leaders: How do we continue to support growth while conserving cash and limiting cost increases?
Traditional approaches for sales-ops won’t work in this environment. Hiring extra staff will increase overhead and be an immediate drain on much needed cash. Implementing new, revenue focused software may help, but also could be prohibitively expensive for earlier stage companies. Even if a startup can afford these technologies they may not deliver the short-term ROI desired to help drive towards profitability as noted by Bain:
“Every major B2B company invests millions each year in sales technologies, yet 62% of 167 companies surveyed recently by Bain & Company said the return on their investment fell short of expectations.”[iii]
What other options does a Sales-Ops team have?
Why Hasn’t Automation Proliferated in Sales Ops?
If you consider the type of tasks Sales Ops performs on a day-day basis, automation seems like a natural candidate. Teams move data between systems, handle lots of documentation and orders (either paper or digital), drive insights etc. These are the bread and butter applications for automation. If that’s the case, why then hasn’t automation been used more for sales-ops in startups and why is much of the work still done manually? A few key reasons:
- Startup Sales Processes Change:In high growth organizations processes change frequently. The cost of implementing legacy automation technologies prices many sales-ops processes out. No executive wants to pay a significant amount to automate a process that may be obsolete in 6 months.
- Exception Handling:Very few processes performed by sales-ops are identical. Often these processes have many different exceptions depending on the sales person, sales team or customer. Again, the cost of implementing RPA or other automation technologies in high exception situations prices out a lot of processes.
- Expensive Up-FrontCost: Startups are often cash-strapped, especially in macro-economic environments with a high cost of capital. Because of this, many startups cannot afford automation that has a high-up front cost. High up front costs can derive from extensive services costs to implement, and/or traditional licensing models.
A New Approach to Automating Sales Ops and Supporting Growth
Thankfully, a new way to automate has arrived, eliminating much of the up-front cost and dramatically reducing the services costs of implementing and managing automation. Because of this, automating many sales ops functions is now a prime way for startups to support growth while limiting costs. Kognitos’s NLP based automation places this tool in the hands of sales ops employees. Because Kognitos enables people to automate in plain English, simply typing natural business commands to automate their processes, sales-ops can now quickly remove much of the manual work in their day to day and focus on higher value activities.
At an aggregate level this has many benefits for a startup beyond limiting or reducing cost including:
- Better Employee Retention:Both sales and sales-ops team members will be able to focus on higher value work and have greater satisfaction in their jobs.
- Increased Sales Efficiency: Account executives can spend more time with customers and less time on internal “to-dos”.
- Improved Forecasting:Clean, on-demand data will help improve the ability of sales and executive leadership to forecast revenue and plan for growth.
- Higher Customer Satisfaction: With more orders on time, easier customer onboarding and greater support, customers will be more satisfied and more likely to increase spend.
- Deeper Insight for Product Development: Up-to-Date information on product purchases, and responsiveness to sales can help guide product development on where to invest further R&D and how to navigate the competitive market.
Empowering Sales Ops to Support Growth
In the current conditions, one of the best ways that startups can handle a potential slowdown on fundraising and need to drive towards profitability is by maximizing the effectiveness of their teams. This is especially true in the function of Sales-Ops, a highly connective group that helps ensure sales, marketing, finance and support are all able to address customer needs. While traditional methods of increased hiring and the implementation of expensive, revenue specific software may not be feasible, Kognitos new approach to automation, automating in plain English, empowers companies to not only limit costs but drive growth sustainably.
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[ii] Shivani Shinde, Business Standard, “Sequoia asks founder ecosystem to tighten belt, focus on profitability”, 25 May 2022, https://www.business-standard.com/article/companies/sequoia-asks-founder-ecosystem-to-tighten-belt-focus-on-profitability-122052501492_1.html
[iii] Harvard Business Review, “The Sales Playbook of Successful B2B Teams”, 25 August 2021, https://hbr.org/2021/08/the-sales-playbook-of-successful-b2b-teams