I was looking forward to this interview. From establishing sales strategies at early startups to developing and running a full-scale sales operations team of 40, Tom’s brain is worth picking! He’s now Senior Vice President Global Sales Operations and Commercial Sales at Fuze and I was interested to learn more about his path into sales operations whilst uncovering some gems of knowledge for the community. We discussed Tom’s productivity model for measuring the success of a sales ops function, rolling out new processes and making them stick, moving the needle on rep productivity and ramp up time, working with sales enablement, and more!
Rory Brown (RB): Perhaps you could tell me a little bit about yourself and how you made your way into sales operations?
Tom Siegel (TS): I would say it started when I began at my first startup about 15 years ago. I was a VP of Sales there but I ended up running everything, from commission to building rules of engagement. That continued for the next two startups I worked at thereafter – and being such early stage startups, we did not have the luxury of any formal sales operations departments. Unbeknownst to me at the time, I was basically doing sales operations as a function of my wider sales role, so that was my initial background. When I joined BMC Software, I was originally recruited to develop and run a full-scale sales operations team of 35-40.
RB: So, looking at the VP sales role and the VP of sales ops role, what are the fundamental things that you think both roles are covering and where do they split?
TS: Well firstly, there is typically no revenue contribution on a VP of sales ops role, whereas on a VP sales role, you are always driving a revenue number. Secondly, in my world, the VP of Operations role also carries Chief of Staff responsibilities. In this role, you take on the responsibility of being a chief of staff because you are thinking very similarly, whether it is about channel coverage, quota and compensation, or rules of engagement. And because I’ve done the role on the revenue side, I have gained the respect and confidence to give our CRO guidance.
RB: You’ve mentioned that the VP of Sales has a revenue number that they’re chasing, and the VP of Sales Ops doesn’t do that directly. So, what is success for a sales ops function and have you seen any ways of measuring that?
TS: Yes, absolutely. If people ask what our mission statement is, it’s to increase the efficiency and productivity of the field sales organization. There are different ways of measuring that. Here we base it on sales rep productivity and we have built a productivity model that drives the hiring, the coverage, the success and the metrics of a region. So if you are expecting a certain amount of productivity from a rep, you can measure that using data such as when they come on board, how productive they are on a quarterly basis, and even look at their attainment vs the quota to see who is operating with a headcount that is below productivity.
RB: Nice. Could you expand on that model a little more?
TS: Sure. We have developed such a model that incorporates a ramp for each role – enterprise rep, mid-market rep, inside rep, and so forth. which is really just an expectation on how long it would take them to reach full productivity – it could take 3 months, 6 months, or even 12 months to reach the stage where they are fully hitting their target. We model that with other assumptions like their quota, the ramp, the churn per quarter and so forth. We then put that all into the model and it gives us an expected coverage rate. Then you can start tweaking the assumptions to see what the impact of changing a ramp or the impact of decreasing churn would be on your productivity. As an example, if your productivity is too low that could mean changing your quotas or adding more sales reps. We call that your productivity model and that’s what we drive our business by.
RB: I really like that, thanks. When looking at the insights that you get, how much of those are going to your CROs and VP Sales level to help them, and how much of it is going up to help set expectations with your C-level?
TS: It goes to both, the Executive team as well as the Regional Vice Presidents. Productive Capacity is referenced on Weekly Executive Forecast Calls as well as weekly regional forecast calls. It is definitely in the water supply and if you were to speak to someone in Finance, Sales or even HR, they would be able to clearly explain what productive capacity is and why it’s important to not only Sales but the company.
On the same note, we build the productivity model so that when we come into our budgetary period, we can work with finance to ensure we have the productive capacity to meet our growth targets. For example, we will run the productivity model based on the current head count that we have, then go back to finance and say, ‘based on these assumptions, if you want us to achieve 100 million dollars of bookings, the model shows we can only do 94’. So, as a company we need to build that into our headcount plan. We have a very good cadence with them, and they understand the productivity model across the board.
RB: One of the big problems for people in the community will be rolling out new processes and making them stick, making them tight, and making them useful for everyone involved. How do you go about rolling out a process and making sure that it sticks?
TS: It can be challenging for sure. It really comes down to communication, enablement and accountability. As an example, in a previous company we built a Deal Desk to review every deal over a certain dollar amount. The goal of the Deal Desk was to ensure that the deal was structured correctly, had appropriate discount levels and met the company’s rules around revenue recognition. Before launching the Deal Desk, we communicated to the sales force via email and webinars on how the Deal Desk worked, why it was being rolled out by the company and what it meant to the sales teams. We then offered weekly “Office Hours” to answer any questions post communication. Finally we ran weekly reports out of SDFC that measured what deals were already reviewed by the Desk and which deals were not. Any deals that should have been reviewed by the Desk but hadn’t were escalated to the EVP of sales. It didn’t take long, maybe one quarter, until the Deal Desk reports had very little escalations and were an integral part of the Sales Cadence.
RB: Thats sounds like an excellent plan. It seems like potential rep productivity and ramp up time are areas of focus for you. When you look to move the needle on those, how do you go about identifying the right data points to observe these measurables?
TS: In BMC days we had a very simple productive ramp. Inside sales reps were expected to have 3 months of low productivity and be fully productive by 4 months. Outside sales reps had 7 months to reach full productivity. That is how we started the model and built quotas; it was simple. Fast forward to where we are now, and it’s a bit more challenging, especially in the Telecommunication Industry where sales cycles can get very complex and companies take longer to make strategic decisions. So to try and get as accurate data as possible in regards to ramp, I have my team build a cohort on a pool of reps, twice a year, to ascertain how much they are selling and how quickly they are selling it. These cohorts provide the foundation for the ramp that we use in the productivity model.
RB: Let’s say you guys want to improve your ramp. Where would you identify how you might do that?
TS: Sales enablement is one of the KPIs that we focus on. We try to find where enablement needs to focus. We look at the velocity of an SDR moving stage to stage and identify what areas they are getting stuck in. We also use things called ‘leading indicators’. They are the number of direct meetings, new partner meetings, and what we call ‘visible opportunities’ that have a certain monetary value, customer commitment and so forth. They need to have so many of these opportunities per quarter, because it correlates to their sales productivity. If we see that their leading indicators are dragging, we compare that to their attainment, and we decide whether this person needs more enablement. If so, we put them into a pitstop and we reinforce certain areas. And the whole objective of that is increasing their positivity and decreasing their ramp.
RB: A pitstop – that’s a nice idea.
Let’s talk about turning insights into action. Say you discover an insight through data, what’s the process in taking that to the right people and turning it into something that happens as a result of it?
TS: At one of my previous companies we had to build a deal desk. After the close of every quarter we would review the amount of deals that were reviewed by the desk to see if there were any trends that we found interesting. In one case we found that for a specific product line almost every single deal was at a 90% discount, and our average discount overall was about 40%. I took that data to the SVP of that product line and highlighted the consistently high pricing on his product lines, which was making us provide a 90% discount. He said that frankly he hasn’t checked the pricing in a while, and I suggested that he should look at the competitors, because that trend is way too high. Subsequently he adjusted his list price to be more in line with the market and we saw our discounting fall more in line with the company average.
RB: A good example, thanks. How much of your role consists of that kind of ‘practice recovery’ as opposed to dealing with requests and ongoing processes that are part of the strategic picture?
TS: The amount of practice recovery in sales ops really varies by size of company. In the larger companies, where you have bigger teams, you often have the luxury of being more strategic with the data. In smaller companies there is more firefighting going on so the practice recovery is less as you are personally dealing with these fires. It also depends on how extensive your tech stack is as well. Smaller companies may not have the luxury of an extensive tech stack and be limited to only a CRM and maybe only a single analyst or admin. We are fortunate here at Fuze in that we have a deep tech stack that allows us to look at data and act upon that data in a more proactive nature.
RB: How do you prioritise where you look first? Is there a system or is just random?
TS: We have a rhythm – there are QBRs which are on the sales side, and we have a monthly operating rhythm which is on the company side. My team is building the presentations for both. At least once a month we are building the monthly operating rhythms, looking at the specifics of everything we have talked about today as well as the qualified pipe and the metrics around that.
RB: If you take the relationship between you and a VP of sales, what kind of famous double act or duo could you liken to that relationship, and why?
TS: It depends on the relationship between the two and how valuable they believe the operations role to be. There have been some that I have had a strong relationship with – one VP even took me to India with him, and I was like his proxy. That is when you know that you are providing value. If they believe that you wholeheartedly have their back, they give you full responsibility and they trust what you are telling them – I would liken it to Batman and Robin.
RB: That’s a sensible answer. It’s been a pleasure Tom.
Want to get more insights from sales ops leaders? Check out our other interviews in the sales ops interview series.
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