Primer: Sales Operations Analysis

Primer: Sales Operations Analysis

While the role of the sales operations analysts centers around reports sales modeling and spreadsheets in general there is a trend that is moving the job scope towards generating business insights.

Data visualization, such as dashboards, charts and PowerPoint slides are focused around a situation or issue and how the impact of that affects the organization. For example, a decline in sales in a certain territory or market segment may be due to a shift in customer preference towards a competitor or a new product. Such insight could lead to management deciding the best course of action to take to retain existing customers or whether refocusing their attention elsewhere might be a better course of action depending on business strategy. It is also the sales operations job to select the data to track what is relevant, to help management understand the activities within the organization.

This would result in management being able to make well-informed decisions to do this. They generate regular reports and ensure this data is clean accurate and complete.

When dealing with reports there are two kinds of inputs.

1.    Today's numbers that show the metrics for the future. The leading indicators.

2.    Historic numbers that show the performance of the past. The lagging indicators.

Each of them has their uses and should be used situationally.

 Leading indicators are used to predict changes in sales and are usually input oriented. They measure the activities needed to achieve sales goals and estimate how likely it is that the sales goal will be achieved. CRM tools, sales funnel stages, pipeline volume and associated metrics are a good source of leading indicators. These metrics will give an expectation of the performance of the organization in the future. By measuring the number of sales calls open opportunities and proposals submitted sales operations are making an educated guess on the future sales figures. A word of caution that leading indicators come from the input of salespeople. While the sales methodology and sales process should ensure the language used is universal, there is still some element of gut feel to metrics in the pipeline. Leading indicators such as expected close dates and expected volume are especially vulnerable to this. So do not count your chickens before they hatch.

Lagging indicators are used to assess the past performance of the organization and are usually output oriented. Some examples are customer visits, revenue and units sold. With the advent of business intelligence tools there is a large amount of data available in any organization figures such as sales volume revenue and margins among others should be easily available. These metrics will give an update on the historic performance of the organization in a given period.

It is common for analysis to be run for seasonality market share year on year comparisons or a combination of the above. The value of lagging indicators is that it allows us insight into how the organization has performed compared to our forecasts either to high or low and there may be a mismatch between capability and expectation.


Sales operations are essential in producing reports and analysis which drive recommendations by using predictive models. The sales operations department can help take an active role in closing the gap between expected and actual sales performance. Accurate sales forecast allows companies to make informed business decisions such as product launches, headcount needs, cash flow and other resource allocations.

A method of sales forecasting. The first step is to look at the expected account growth or closure of existing customers. Are there a number of accounts that shut down each period? Is there an organic growth in the business of your customers which would result in increased sales? That should be accounted for to get the base which is the status quo  without the impact of salespeople.

Secondly we would need to factor in the effects of our own salespeople. This would be the growth due to new customers, contracts won or increased orders from existing customers. This may be done by comparing the previous period of sales with the current period and extrapolating the data based upon the growth rates calculated. Thirdly we put steps 1 and 2 together. The organic growth plus sales effort would give us the expected sales for the forecast period. From experience this process may be repeated several times throughout the year and each forecast may have several iterations as growth rates and targets are debated. It pays to remember that a forecast is only as reliable as the data that goes into it and is only as effective when they are realistic.

There are a few slight variations to how organizations might do their forecasts.


Some organizations prefer to use the compound annual growth rate CAGR instead and forecast the current year performance by applying the CAGR to previous year's performance of sales.


Some organizations have their sales in cycles. Whether it is years months or quarters these organizations see a pattern to their sales and take into account a seasonality to their forecast.

Actual plus forecast.

Aside from the annual quarterly and monthly forecasts some organizations practice using the actual year to date performance and then apply the forecast to the rest of the year. For example, using a calendar year in April the organization might do a 4 + 8 forecast meaning four months of actual sales with eight months of forecast sales. Sales pipeline management.

The sales pipeline pulls together all sales prospects and the stages that each opportunity is in and presents this in a visual manner. Pipelines provide an overview of a salespersons, sales teams or entire organizations accounts and gives a forecast of how close the team is to reaching their sales goals based on the conversion rates for each of the stages of the funnel. The stages should be clearly defined in the sales process. By agreeing on the stages and the language a sales culture is developed. Terms would be clearly defined in a playbook or at least in the sales process which would remove any ambiguity on what each stage of the sales pipeline means. This ultimately improves the flow through rate of opportunities in the pipeline as salespeople using the process become more proficient in using it. While many of these opportunities may also be reflected in the forecast care should be taken in selecting those only in the final stages for consideration. There is always a possibility that an opportunity might be lost before closing. Some common metrics when reviewing the funnel are:

·        Number of deals in the pipeline.

·        Average deal size

·        Conversion rate

·        Percent chance that a deal moves to the next pipeline stage

·        The average time spent in each stage of the pipeline

By having the above it is common for sales operations to review the pipeline with salespeople on a regular basis to understand what is happening with a deal. Usually only major deals are tracked but often sales operations look at the pipeline as a whole. Some common questions to ask when reviewing the pipeline are. How many opportunities were won and lost in the period? Understanding the win loss ratio helps to determine the success of the sales process and the skill of the salespeople. At what stage of the pipeline did the opportunities drop out? Which stage opportunities drop out of the pipeline will show where the weaknesses of the salespeople are. Is the organization losing out and product features or price? Or perhaps it is the sales person's presentation that needs to be upgraded. Are there any opportunities that have been at a stage in the pipeline for a long period?

Stale opportunities show a lack of engagement with the customer. There is a risk that such customers may end up going to a competitor resulting in a lost sale. If the opportunity is left to the stage by the salesperson they might have too many accounts in their portfolio. If the customer is stalling, then perhaps a follow up visit is required. What is the volume in terms of sales or revenue at each stage of the pipeline? Low lower volume would indicate more leads are necessary to larger volume and a stage would suggest that focus might be needed to clear a large deal or a large volume of deals.

By looking at the above it helps to focus management's attention to the customers that are most likely to close and understand the factors involved in swaying a customer's decision. Forecasting on the leading indicators from the funnel also gives some predictability to the sales process.

Best Metrics to Understand Your Sales Process

Best Metrics to Understand Your Sales Process

Primer: Sales Enablement and Training

Primer: Sales Enablement and Training