A GUIDE TO

SALES RESOURCE
OPTIMIZATION
By Michael Perla and Tim Clarke
The Case for
Sales Resource Optimization
According to Harvard Business Review, companies spent $800B on sales
force compensation and another $15B on sales training in 2015. If you add
in another $15B investment in CRM according to Gartner, companies spent
$830B on people, people development and enabling technologies, which is
roughly 5% of total U.S. Gross Domestic Product. This is a staggering amount
of money invested to deliver revenue growth.
Contrast this figure to the investment we make annually in optimizing the return on that investment.
Once a year, typically during the budget process, we sit down and think through how many sales people
we need in the organization. We may base our sizing assumptions on how we performed this year, our
revenue targets for the upcoming year or a financial analysis of the costs (e.g., recruiting, on-boarding)
vs. benefits (revenue ramp-up time).

More often than not, we devote too little time and thinking into prioritizing our customers, determining
our coverage model and sizing our sales teams. Our need to reassess is magnified when there have been
major market or competitive shifts or if the company has grown through acquisition.

We all know the value of rebalancing our 401K to drive greater returns on our investment portfolio. Yet,
as collective stewards of nearly $1 trillion in sales investment, the question remains – why do we place
so little time and effort in driving a greater return on our investment in sales?

As we’ll discuss in this paper, those companies who apply a more rigorous
approach to optimizing their investment in the sales organization yield
significant benefits across a host of metrics related to productivity, revenue
and employee engagement.

SALES RESOURCE
2 SYMMETRICS GROUP
OPTIMIZATION
Sales Resource Optimization (SRO)

SRO is the process by which companies align, size and enable their sales organization to
maximize their impact on the top and bottom lines. SRO starts with the premise that we
don’t have unlimited dollars to spend on sales, and as leaders within our businesses, we have
a fiduciary responsibility to spend those dollars wisely. Part art and part science, SRO aims to
answer key questions aimed at aligning Customers, Sales Coverage, Sales Capacity and Sales
Capability – collectively called the 4C’s.

These questions include:

1.CUSTOMER
Are our sales resources aligned against the highest potential market and customers?

2.COVERAGE
How do we optimize account coverage against prioritized markets and customers?

3.CAPACITY
How many resources do we need, by market segment and across the customer life-
cycle?

4.CAPABILITY
Does our team have the right mix of skills and capabilities to sell and deliver
on our value proposition?

Whether you own the company’s strategy or are tapped to execute it, this
alignment is fundamental to your role as a responsible steward of your
shareholders’ interests.

SALES RESOURCE
3 SYMMETRICS GROUP
OPTIMIZATION
 WHAT IS THE ULTIMATE GOAL OF SRO?

To align our coverage plan, capacity to deliver, and

capability to differentiate against customers with the
highest propensity for growth.

FIGURE 1
EXPECTED OUTCOMES OF SALES RESOURCE OPTIMIZATION

SALES RESOURCES

PRODUCT EXPERTS

CAPACITY
PROCESS MESSAGE CHANNELS SOLUTIONS
deliver

COVERAGE
SKILLS &
TRAINING TOOLS

CAPABILITY differentiate align COVERAGE

CUSTOMERS

SALES RESOURCE
4 SYMMETRICS GROUP
OPTIMIZATION
 FIGURE 2

The most forward-thinking companies are not just viewing SRO as a tool to reduce costs, but also
as an opportunity to accelerate revenue growth while maintaining or expanding profitability.

SALES STRATEGY SALES RESOURCE

DEFINES:
• Who you are selling to
• What you are selling
• How you are selling
• Why you are different
OPTIMIZATION...
is all about having the
right number and type
of sales resources on
the right customers,
with the right skills and
capabilites to win

Prioritized Customers . Right Coverage Model

Optimized Capacity . Right Skills and Capabilities

Many companies pursue SRO initiatives as an event-driven initiative – new ownership, an

acquisition or divestiture, a significant product launch or a change in the business model. Too
often, the focus revolves around reducing costs while maintaining top-line revenue growth.

YESTERDAY’S USE OF SRO TODAY’S USE OF SRO

COST OF SALES COST OF SALES
REVENUE REVENUE

PROFITABLE
REVENUE
$ COST $
GROWTH
REDUCTION INTIATIVE
INTIATIVE

YR.1 YR. 2 YR. 3 YR.1 YR. 2 YR. 3

SALES RESOURCE
5 SYMMETRICS GROUP
OPTIMIZATION
SRO BENEFITS

So what are the benefits of aligning coverage, capacity and capability to clients with the
highest propensity to grow? Here are just a few:

• Sales Productivity: Improved win rates and cross-sell; reductions to sales cycle time

• Employee Engagement: Improved sales rep satisfaction and lower attrition rates

• Profitability: Improved average deal size and customer retention rates

According to ZS Associates, on average, top-line revenues can be increased from 2-15%

through sales resource optimization; the opportunity can be far greater for organizations that
are significantly mis-sized or mis-deployed. ZS suggests that two-thirds of the upside comes
through the better allocation of sales resources across products, geographies, customers and
activities. The other third comes from better sizing and structuring.

The overall SRO model looks at how the 4 C’s link to corporate strategies and objectives, as
well as how the organizational structure is aligned to them. If the sales organization structure
is the physical manifestation of the company’s strategy, we want to ensure it’s aligned to the
SRO findings and recommendations, which may require some shifts and changes. We’ll focus
our discussion in this paper mostly on the 4 C’s including Customer, Coverage, Capacity and
Capability.

SALES RESOURCE
6 SYMMETRICS GROUP
OPTIMIZATION
CUSTOMERS

It’s pretty self-evident that customers are central to the ongoing success and growth of
a business.

“The purpose of a business is to create

a customer.”
– Peter Drucker

As part of an SRO project, the key question to answer is: Are selling efforts aligned against
the highest potential markets and customers?

First off, there are a few things to ‘unpack’ in that question. Selling efforts means all the
selling resources – people, programs, money – that a company utilizes in going to market.
This can range from an account executive in the field to product specialists to sales
technologies, like a sales force automation system (e.g., Salesforce.com). The other key part
of the questions is around market and account potential.

For example, are you targeting markets that are growing at high-single or double-digits and
can your company create a competitive advantage within the market? We all know that
double-digit and high-CAGR (compound annual growth rate) markets draw competitors and
many other entrants, similar to high-potential accounts. For example, if you are a smaller
firm (relative to your competitors) going after Fortune 100 accounts, you will typically be
competing with firms that have extensive resources to penetrate those accounts – you’d want
to be thoughtful around the approach and investment.

SALES RESOURCE
7 SYMMETRICS GROUP
OPTIMIZATION
Portfolio Analysis: Top Down or Bottoms Up

There are a couple of approaches that we’ve found helpful in analyzing the customer area
for an SRO project. You can look at it from both a top-down, portfolio based approach and
bottoms-up, build-up type approach. In fact, you should analyze both approaches and
reconcile the differences.

First off, the top-down approach looks at each market or account through the lens of a
portfolio manager. Essentially, each market or account is analogous to a company stock.
A highly simplified model is below.

Top Down Market or Account Analysis

STOCK (MARKET) TYPE RISK RETURN

Large-Cap (Blue Chip) Low Low

Mid-Cap Moderate Moderate
Small-Cap High High

Through this approach, you can designate each market as a certain type, which usually
denotes a relationship between risk and return. In general, high risk stocks / markets /
accounts should be able to generate high investment returns (think Amazon or Dell or
Microsoft in the early days). Aligning a significant amount of your selling efforts to a low-
return, low-potential market is unlikely to be a good investment of time, energy and effort.

SRO is essentially a system whereby you invest your sales resources for a
maximum, risk-adjusted return.

SALES RESOURCE
8 SYMMETRICS GROUP
OPTIMIZATION
 Sales Portfolio Management
10%
C
A-1

A-3
‘16-19 CAGRs

Expand & Grow Protect & Enable

B
A-2

Integrate Selling Optimize Cost

Organizations of Coverage
(10%)
L Relative Market Share H

In the bottoms-up approach, you should also understand the potential of each individual account to
build a bottoms-up view of potential growth. In general, we have found the top-down view, which may
come from management projections, is usually higher than the bottoms-up view, which is usually
developed by sales professional estimates. With one of our clients, the top-down view was 2% higher
than the bottoms-up view. The team agreed to split the difference and added a ‘stretch’ goal to drive
over-performance. Once you determine the market and account potential, you need to construct your
ideal coverage model for the various account types you are pursuing.

COVERAGE
The key question to be answered around sales coverage is:

How do you optimize account coverage against your prioritized markets

and accounts?

SALES RESOURCE
9 SYMMETRICS GROUP
OPTIMIZATION
Value to Cost
In order to cover a market or account, an organization provides a selling resource to call on, respond
to, or interact with the account. The seller may reside in a call center, in a partner (channel)
organization, or as a direct field sales professional with your firm. Generally, for most organizations, a
field sales person is the most expensive selling resource. Many companies are incenting customers –
particularly in consumer markets – to use their web site to purchase items or interact with them.
Delta airlines, for example, will often charge you a fee to purchase a ticket via their call center vs.
using the web. A web transaction typically costs a company pennies vs. a call center, which may cost a
few dollars per call, but when there are millions of transactions/interactions, the costs add up quickly.
In contrast, you wouldn’t think of selling complex system integration or strategy projects via a web
channel – those types of offerings are much better suited to a field sales professional and face-to-face
interaction.

As part of designing a coverage strategy for a firm, we often create a high-level coverage map and then
drill-down from there. A coverage map will include how the company will cover each account segment
from a field sales resource to a contact center to a partner channel. For one of our clients, if the state
or zip code area was not dense enough in terms of market potential, the client covered the territory
via a manufacturer’s rep vs. a W-2 field sales resource. The former were 100% commission, while the
latter had a base salary, benefits and other perks for a typical B2B sales role.

Identify a Future Segmentation and Coverage Model that Optimizes the Return
on Sales Investments/Resources
Seller focus is going deeper on larger accounts, while smaller accounts are touched more frequently
from the Inside.

ACCOUNT ROLE/ COVERAGE

TIERS $ % OF REV SELLERS RATIO
National /
Strategic
Accounts
1 > 1M $57M 17% Directors 26
.1% (.15%)
~12:1

2 500K-1M $24M 7% Seller .1%

37
(.2%)
100-125.1
Territory
Accounts 3 100-500K $96M 29% Seller .1%
501
(3%) (Account plans
for top 20-30
4 50-100K $45M 13% Seller .1%
652
(4%)
accounts)

1.1K
5 25-50K $40M 12% Inside .1% (6%) ~2.5K:1
Inside 2.4K
Accounts 6 10-25K $37M 11% Inside
.1% (13%)
(Focus more on
>10K & higher
potential)
7 0-10K $36M 11% Inside 13.1K
(74%)
(9.9%)
# OF CLIENTS
YoY REVENUE

SALES RESOURCE
10 SYMMETRICS GROUP
OPTIMIZATION
 CAPACITY
At this point in the process (and the order is intentional) you have identified your best fit market
segments and customers and the ideal coverage model for serving them. The next question you must
address is:

“How many resources do we need to effectively sell and service our

prioritized markets?”
As routes-to-markets have exploded and specialized expertise and overlay sales roles have become
more prevalent, estimating sales capacity has become more complex due to resource “bottlenecks”.
By definition, a bottleneck is a point of congestion in a production system that occurs when workload
arrives too quickly for the production process to handle – thinking about your sales process as a
production system is helpful in determining capacity bottlenecks. Organizations which bring multiple
resources to bear on the sales process must recognize that capacity is always limited by a bottleneck.
For example, if a product demo is a key part of your sales process and is managed through a limited
number of product specialists, which can only manage 20 demos per week, only 20 demos will be
completed per week regardless of how many demos are set up by the sales organization. This is why
the coverage model should always be determined before estimating capacity.

The coverage model determines the type of resources which cover your different
customer segments across the customer lifecycle. The capacity model then deter-
mines how many resources you need within each role to achieve your revenue goals.

Resources by Customer Segment and Lifecycle Stage

Key Changes Lead Generation Opportunity Support Account Mgmt & Growth Service & Retention

Strategic Account
Strategic Accounts Executive

National Solution Specialist National Account National Account

Segment 1 Account (Quota Bearing) Executive Manager
Manager

Regional Account
Segment 2
Executive
Segment

Segment 3 Inside
Sales Product Solution Specialist Strategic Account
(Lead Generation (Pool) Executive
Segment 4 & Order Taking) Customer Relations
Manager

SBU 2 AEs & AMs

Sales Management Streamline Management & Optimize Span of Control

Alliances & Partnerships

Professional & Advisory Services

SALES RESOURCE
11 SYMMETRICS GROUP
OPTIMIZATION
CAPACITY
If several roles are involved in the delivering your firm’s value proposition, the goal is not to optimize
any one resource, but rather optimize the system as a whole. If the output of a production process is
measured in widgets, the output of a sales process is measured in revenue. Therefore, when estimating
capacity, start with those roles that own the revenue target (i.e., quota-bearing responsibility). There
are several ways to estimate capacity as illustrated below, but we typically recommend a workflow
analysis when several roles are involved.

Modeling Approaches Workload Approach

Method Name Description Model Parameter Data Sources
“Go Get” Sales Number Incremental / Goal’d On
Keep quotas and people the same and CAGR Increase Market Analysis
Same as Last
potentially ratchet by growth rate -
Year +
typical “peanut butter” spread
Avg. Deal Size By Segment
Total Closed Deals Calculated
Number of sellers is based on future
Sales Quota/ Close Rate Win / (Win+Loss)
quota or budgets and the estimated
Breakdown Method # Opportunities Needed Calculated
productivity of the average rep
Hours per New Opportunity Derived from Workload Survey

Look at budgeted cost of sales and

Revenue Bearing Accounts Existing Accounts
divide fully loaded costs to determine
Cost of Sales Avg. Time on Account per Year Derived from workload survey
number of sellers - likely need to strat-
ify if sellers have different roles/costs Total Time on Existing Accounts Calculated
Total Time on Existing Accounts Calculated
Uses time available and what’s needed
for different key activites, such as Total Hours Calculated
Workload
managing existing accounts and/or Hours Per Seller Calculated
opportunities # of Sellers Needed Gap Against Current

In the workload approach illustrated above, note that surveys are a powerful means to capture critical
inputs across different sales roles. These surveys will likely need to be customized based on the role
and key drivers of capacity (e.g., our demo example earlier for overlay product specialists). When
conducting surveys, it’s also important to look at the underlying variance of responses and seek
estimates that are both conservative, yet provide stretch objectives that could be achieved by the
sales organization. Survey analysis is also helpful in informing important organizational capabilities
as we’ll discuss next. For example, if you find that the sales organizations is not spending enough
time with customers, consider which sales enablement tools can be introduced to streamline sales
administration to free up capacity.

SALES RESOURCE
12 SYMMETRICS GROUP
OPTIMIZATION
 CAPACITY
Once you have determined the capacity of the various sales roles within your organization, you can
focus your efforts on determining the right span of control for key sales management positions.
Determining the optimal span of control includes looking at several factors such as the type of sales,
the experience of your sales team, geographic consideration and others. We typically find a great deal
of variance in management span of control, which is often the result of organizational changes that
have been put in place as a patch-work in response to critical staff departures and previous initiatives,
many of which are no longer relevant to the go-forward plan.

Optimal management span of control varies

depending on several key variables.
33
John 9 Sales Rules of Thumb (Rep:Mgr)
Sue 9
Mgrs. With & Without Accounts
Mary 5
Travis 5 6:1 or 14:1
Randy 5
Mgrs. With & Without Accounts
66
Laura 14 8-10:1 vs. ~20:1
David 10
Johan 10 Key Variables
Lisa 8 1. Amount of change taking place in the work environment
Steven (more change, narrower span)
7
2. Geographic dispersion
Sue 7 (higher dispersion, narrower spans)
Nathan 6 3. Available technology
(higher usage, broader spans)
Phil 4 4. The complexity of the functions being performed
15 (more complex, narrower spans)
5. The experience/skills of the manager as well as staff
Amy 15
(higher levels, broader spans)
Grand Total 114

Typical Span of Typical Span of

Control in B2B, Control in B2B,
Conservativee Sales Transactionall Sales

Finally, while estimated capacity is driven by your optimal coverage model, be aware that there is a
natural back-and-forth between coverage and capacity when striking the right balance. If you find that
your coverage model is simply too expensive to fund, consider ways to drive more efficiencies in your
coverage model, which may bring your cost of sales back in line with your targets.

SALES RESOURCE
13 SYMMETRICS GROUP
OPTIMIZATION
CAPABILITY
Sales organizations have a specific way in which they sell, built on a combination of internal and
external processes and best practices. The best sales organizations relentlessly pursue predictability
and repeatability when architecting their unique Way of Sales.

The outcomes of sales resource optimization typically inform compensation strategies, training
initiatives and enablement opportunities - thus, the benefits of SRO can have a significant multiplier
effect. While SRO is the first step in visioning the journey from a Way of Sales standpoint, many of our
clients use the outputs of SRO to identify and better target investment in:

• Process and tools

• Enablement and people

• Metrics and management

Symmetrics Group Way of Sales

CAPABILITY

CAPABILITY CAPABILITY

For example, when developing a new coverage model, you might determine that only a few
accounts generate a substantial portion of revenue and require a deeper investment in coor-
dinated sales and service resources to both maintain your wallet share and capture additional
opportunities for growth. You might consider introducing and developing a formal Strategic
Account Management program to support those accounts over the longer term.

SALES RESOURCE
14 SYMMETRICS GROUP
OPTIMIZATION
 We typically work with our clients to assess existing organizational capabilities in quadrants 2-4 above
against the outputs of the SRO analysis and recommendations. This works best when SRO analyses
are completed in advance of the budget process so key outputs can be used for prioritizing new
investment in the next fiscal period and beyond.

While budgetary limitations may impact what can be done in the short-term, maintaining a longer term
view of sales capability will ensure continuous improvement while allowing for priority adjustments
over time. Once we have identified the requisite organizational capabilities, we work with our clients to
prioritize the short, medium and long term initiatives based on key criteria such as relative value, the
current capability gap and the ease of implementation. The outcome of this process is an actionable
roadmap for sales transformation that can pace investment and change over time to yield sustainable
results.

High Each circle represents an initiative

Size of circle = Capability Gap

Ease of Implementation

D C Lower Higher

E B A Priority 1
Priority 2
Priority 3

F
Low
Low High
Relative Value

SALES RESOURCE
15 SYMMETRICS GROUP
OPTIMIZATION
CAPABILITY
SRO Example

The example below is from one of our clients in which we helped to execute an SRO engagement. Like
many complex projects that have a number of ‘moving-parts’, each SRO engagement will have some
differences in terms of areas to focus / de-focus on given the particulars of the company’s situation.
For some organizations, we might spend more time on the customer segmentation piece, while others
are more focused on optimizing sales capacity and routes-to-market. We analyze each area of the
model to provide us insight, but some require a greater focus.

• A newly formed group at Client ABC brought together people, assets, and products from
two separate business units
Challenges

• The leader sought to integrate the disparate sales organizations and cross-selling
capabilities
• Resources were not optimally aligned to the market opportunity: our client wanted to
improve how they “covered” the opportunity

• Reviewed the current state of their go-to-market/sales strategy and identified gaps and
opportunities through a combination of analytical methods
• Compared the client to relevant external benchmarks and selling models
Approach

• Developed a gap analysis of needs across our “Way of Sales” model

• Facilitated sessions with management around future-state role capabilities needed to
execute the go-to-market model
• Identified programs and initiatives to optimize the go-to-market model, while developing a
road map and prioritizations model

• The recommendations, analysis and approach were well received by the CEO of the
$18+ division
• The Company began execution of the new organizational model, sizing, and roles recom-
Results

mendations
• The new united finished 2016 strong and carried the rest of the division in terms of
revenue and margins

Conclusion

To revisit our thesis throughout this paper, given the staggering amount of money that is spent on
driving revenue growth, it’s imperative that companies ‘pressure test’ how they are deploying their
sales investments. It would be almost criminal to neglect how you organize and invest in sales
resources as a fiduciary to your employees, customers and investors.

SRO is simply a thoughtful and intentional approach to ensuring that your sales assets – people,
programs, and capital – are deployed in a way that maximizes the probability of achieving your growth
and revenue objectives.

SALES RESOURCE
16 SYMMETRICS GROUP
OPTIMIZATION
 About Michael Perla
Michael Perla is a principal consultant at Symmetrics Group and co-author
of the book “7 Steps to Sales Force Transformation.” Michael specializes in
providing actionable insights to marketing and sales organizations to help them
increase pipelines, win ratios and productivity. Having sold and led projects
with the Global 50 to Fortune 1000 companies, Michael provides the analytical rigor of a financial
analyst with the holistic skills of a strategist to help Symmetrics Group clients improve marketing or
sales performance. He has worked as a sales overlay, head of sales operations, and head of strategic
marketing planning, in addition to a sales effectiveness consultant.

About Tim Clarke

Tim Clarke is a consummate sales strategist with a bias for action and
measurable execution. As a Vice President at Symmetrics Group, Tim is known
for his ability to cut to the essence of complex problems and quickly align teams
toward solutions. His approachable leadership style and sense of humor make
him well-liked and highly regarded amongst clients and consultants alike. Tim offers a wealth of
experience in Sales and Go-to-Market Strategy, CRM Effectiveness and strategic growth initiatives. He
has served in senior operating roles in private-equity backed and independent firms and has consulted
with Fortune 500 companies across industries.

Symmetrics Group is a sales consulting and training firm focused on end-to-end improvements in sales force
effectiveness. We partner with Sales and P&L leaders to address opportunities around sales strategy, sales
process and tools, and sales team capability and leadership. Our comprehensive approach to creating a high
performing sales organization is featured in our recent book 7 Steps to Sales Force Transformation.
To learn more about Symmetrics Group, visit www.symmetricsgroup.com.

SALES RESOURCE
17 SYMMETRICS GROUP
OPTIMIZATION