Getting executive buy-in on expanding your Revenue Operations team

If you’re in Revenue Operations the chances are high that you wear fifty different hats. Fifty might be an understatement.

Before you lose your marbles and hit burn out, how can you go about asking for more people resources? The good news is you can make this a math problem.

By how much do you impact productivity and revenue? That’s X. If X is net +1 sales executive or more, you’re already paying for yourself.

Next, how much additional productivity-impacting work is on your plate? If it’s 100%, meaning you’ve got twice the work ahead of you than you’ll ever be able to output, a second “you” also pays for herself.

The articles below go into more detail and helped equip us to double the size of our team at Zerto.  

#1 is “When to Start and Scale Sales Operations?“, by VC, CEO, and multi-time CMO Dominique Levin.

Dominique’s formula for Sales Ops hiring is simple: you expand the team each time the aggregate productivity gain (%) of the number of quota carrying reps (#) is greater than or equal to 100%.

As Dominique writes, “if you’re delivering a 20% boost in productivity, and you have a 10 person team, then hiring another Sales Ops pro would give you a 2 FTE equivalent boost in productivity, meaning that you probably should have hired them a while ago.”

#2 “The Right Ratio of Sales Ops to Salespeople“, by the fantastic team at SellingBrew.

#3 “In the Best Sales Teams, About Half of the People Are in Support Roles“, by a team of sales pros turned partners at McKinsey.

SE Ops: Sales Ops for the Sales Engineering team

Earlier this year, a fellow Modern Sales Pro asked what a Sales Ops-style role for a Sales Engineering team might look like.

Shortly after sending my thoughts on the topic, Stephen Morse, former VP Sales Engineering at Salesforce and current VP of WW Field Engineering for Algolia, shot back to say my insights were spot-on. With kudos from such an experienced SE executive in my corner, I thought I’d share so more Rev Ops pros might benefit.

Operationalizing our SE and Support teams was what I first spun up at Zerto, and ran with for roughly six months, as a way of getting leadership on-board with a formal Sales Ops practice.

My pitch to our head of Sales at the time was this: “My goal is to take everything that you’ve said has made me great at SE & SE leadership roles, add all the lessons learned from working with and through Support, define ‘successful SE’ and ‘successful Support Rep’, and then crank-out successful sales and support teams.”

Sales Ops, Marketing Ops, SE Ops… they’re all GTM focus areas of the same coin:

  • Sales Ops drives sales velocity through salespeople
  • Marketing Ops drives sales velocity through marketers
  • SE Ops drives sales velocity through SEs
  • Constantly improving sales velocity drives revenue

In my case of running this for all of pre- and post-sales plus technical support, the key goals for me were (i) building scalable systems for recruiting & onboarding along with (ii) improving alignment with sales. This meant owning areas like capacity and compensation planning, enablement design & delivery, program and process creation, GTM planning, identifying and reporting a variety of metrics up and/or over, etc.

If the above sounds like what Sales Operations does for Sales, I’ll repeat: these are GTM focus areas of the same coin.

To provide additional context and ammo, below are several key points from the job description I wrote when formalizing this to the business:

  • Create and execute globally-standardized processes, programs, and tools that facilitate efficient operations, effective execution, and improved management insight
  • Develop annual budgets, hiring and capacity plans, comp plans, and other operational plans
  • Build and launch scalable processes that drive pre-sales alignment, Professional Services utilization, and Support CSAT targets
  • Own process improvement across pre-sales, post-sales, and support
  • Create programs which drive continuous expansion and growth out of large customers and OEM relationships
  • Develop the KPIs, metrics, and operating rhythm to drive the scale-up/scale-out capability of our tech staff managers
  • Build and launch new customer and partner programs that improve access to and engagement with our pre- and post-sales teams
  • Work with customers and partners to identify areas for improvement in our technical operations, product development and launch, value-add services, etc.

Creating a professional services pricing model

A friend of mine came looking for some general feedback about how people approach billing for professional services. They were selling to enterprise clients, mostly in financial services and insurance, and were starting to see more and more of their time and resources spent on integrations, configuring and delivering hardware, and offering ongoing support past the sale.

I’ve helped spin up a handful of hardware/software PS teams. Some general guidance on this is below:

  1. Structure your pricing against 3-4x fully-burdened cost. Rates may be different per employee role. Think hourly rates, hours per project, etc. Here’s a personal example of pricing:
    1. In a past life, I showed up as a fully burdened cost of ~$140k. I was billed out at $225-275/hr in a direct model.
    2. Napkin math on $140,000 against 2080 business hours per year is $67, times 3 and we’re at $200 an hour. 
    3. But you aren’t getting 100% billable utilization, you’re getting more like 60-80% depending on the business. A lot of law firms follow an 80% billable time model, meaning partners need to spend 80% of their time on billable activities.
    4. 80% of 2080 is ~1660, $140k/1660 is ~$84, times 3 is $250…
    5. Thus we’re back to our range of $225-275/hr.
  2. In Enterprise IT, it’s common to see a 3x rate for a direct model and 4x for a channel distribution model. The latter is due to margin pressure and additional risk.
  3. Whether project management billables are based on an hourly rate, included in the overall rate card, or charged as a percentage of each project is largely up to you; note the “percentage of project” option is one I’ve seen more in the construction industry than anywhere else.

For deeper reading on professional services billing, I strongly recommend reading SPI’s annual “Professional Services Maturity Benchmark” reports. These give an outstanding level of detail on all-things professional services: business models, metrics, packaging, pricing, talent, financial metrics and modeling, and more. It’ll give you a lot to work with in terms of strategic planning and reverse-engineering your models, metrics, budgeting, etc.

About the Benchmark:

In 2007, SPI Research developed the PS Maturity Model™ as a strategic planning and management framework. It is now the industry-leading performance improvement tool used by over 15,000 service and project-oriented organizations to chart their course to service excellence. The PS Maturity™ model helps executives compare and analyze their own performance so they can build consensus around the actions to take, and where to start, while quantifying the benefits of change. Analyzing the benchmark data by vertical market, geographic region and organization size gives PS executives an accurate comparison to their peers and the market at large. Over 3,000 firms have completed SPI’s benchmarking surveys over the past ten years.

You can find the 2019 report at https://www.kimbleapps.com/resources/2019-professional-services-maturity-benchmark-download/

If you want to compare against the 2018 report, you can find that at https://www.kimbleapps.com/resources/professional-services-maturity-benchmark-download/