Steve Bull and Sanjeev Kayath co-wrote this article with Eric Scott.
Since the late 2000s, life sciences companies have treated sales operations as a cost center, and investments to improve the function generally had a single objective: Do more with less.
Today, as many companies have already captured most of the easy gains, the industry is approaching the point of diminishing returns (and some companies are long past that point). The leaders in this space are realizing that the right investment in sales operations can do more than simply reduce costs; it can lead to new revenue. New technology and access to data are enabling ops teams to evolve from a back-office processing function to a true strategic partner with the sales force.
According to ZS’s recent Explorer Study, which analyzed the potential payoff from investments in sales force effectiveness (SFE) across a range of industries, life sciences companies that invest in a single SFE initiative can achieve gains of 1 to 7% in revenue in a single year. More comprehensive approaches across several SFE areas can lead to revenue gains of more than 10%. Across all categories of SFE initiatives, sales operations is a key component of automation and pull-through to achieve these gains, and thus a key area of investment.
Data and Analytics Unlock New Growth
Today, investment in data and analytics is a top priority, and customer relationship management and sales force reporting systems have become table stakes. Sales ops teams are being asked to support sales and marketing more directly through predictive analytics and real-time insights from data sets coming in through a wide range of sources. And the sales force expects that data and reports will come to them in more intuitive, user-friendly ways, freeing them up to spend more time with customers.
Data- and technology-driven programs often carry a steeper up-front cost than mere process improvements, yet such investments pay off because they unlock new sales opportunities. Sales ops teams can use these tools to more directly support sales and marketing, providing them with the right information at the right time—and can capture customer and marketplace information, as well, across a range of sources. That leads to more effective sales and marketing efforts and increased revenue.
VIDEO: The Explorer Study
A New Kind of Business Case
As the healthcare system becomes more dynamic and competitive, sales leaders want a more precise breakdown of market potential across different geographic regions and customer segments. They want this information on a continual basis to ensure that the insights become more accurate and granular over time. And sales reps in the field want data in an intuitive, accessible fashion, delivered through mobile platforms and structured in a way that gives them clear insights to boost sales.
To get there, life sciences firms need to invest in sales ops, and sales ops teams, more specifically, need to focus on these four aspects:
- Clear financial impact: Profit metrics are important, but revenue metrics are critical, as well—particularly those that are specific to operations (rather than those that pertain to the sales function as a whole). Companies also can develop external metrics that track the leading performers on the sales team and then focus on moving average performers into the top bracket with regard to targeting, report usage or other areas in which the sales ops team supports field reps.
- A link to the company’s priorities and sales strategy: The ops team can only help generate new revenue if it’s aligned with the company’s sales strategy. Sales leaders are increasingly asking the ops team to be thoroughly conversant on the strategy so that the team can roll up their sleeves and brainstorm new ideas to help the sales force generate new revenue. In short, they need to evolve beyond the role of internal support (that is, “the people who keep the lights on”) and become direct partners in helping the sales team execute its strategy.
- A clear implementation plan: Sales initiatives can be challenging to implement because of the way that sales reps work (often independently in the field) and because they directly represent the company to customers. Accordingly, sales ops leaders need to build a project plan with clear milestones and cross-functional accountabilities.
- A commitment to track and communicate performance over time: Looping back to gauge performance is crucial not only to see how the company performed against its target ROI, but also to identify areas of improvement for future efforts. Sales ops leaders need to put specific metrics in place before implementation, measure their performance against those metrics after implementation, and communicate results, laying the groundwork for future SFE investments.
Life sciences companies need to invest in a new vision of SFE in which sales ops teams use data, technology and advanced analytics to become true strategic partners with the sales and marketing leadership teams—and with the sales force itself. In a healthcare environment where technology pervades, more sales organizations should embrace the truism that it takes money to make money. With the right strategic investments in sales ops, companies can stop cutting and start growing.