Quite often, small companies don’t have the resources to hire the caliber of sales manager they really need, so instead they either designate one of their senior salespeople to manage the team and continue selling, or they promote that person to become the full-time sales manager.  All too frequently neither approach works.


That’s because it essentially means you are pulling one of your top producers off the line when that is exactly where you need them, and there is no guarantee that a top producer will make for a great coach, yet that is one of the most important functions of the sales manager.


That’s when the business case for hiring a fractional sales manager makes sense, but there are other hidden costs that factor into the decision too.  After all, the sales manager is an important member of the management team because that is the person who ensures that there are enough sales activities to deliver a healthy pipeline and coaches the rest of the sales team on how to improve their win rate.


When so many sales opportunities end in “No Decision,” getting that win rate up is the fastest way to drive better sales results, and that is why effective sales coaching is such an important part of the sales manager’s job.


So, what are the real costs of having an ineffective sales manager or no sales manager at all?


Lack of Skill Development:

Every professional team needs a coach if they are to deliver their best performance.  The sales manager is responsible for coaching salespeople on their opportunities because that has a direct impact on revenue growth.  Effective coaching starts with having a well-defined sales process; one that is proven, repeatable, and measurable.


Yet the sales process alone is not enough because every sales conversation is unique, and they are not always linear. Buyer priorities shift, and the salesperson must be in tune with the subtle changes in the buying decision process.


Research by Primary Intelligence showed that more than one-third of lost deals could have been won by taking a slightly different tack in the sales conversation.  Presumably, many of those sales opportunities could have been won with more effective sales coaching.  That could add a fair amount to top-line growth.


Insufficient Accountability:

The sales manager is responsible for ensuring a healthy sales pipeline, and that means holding salespeople accountable for their performance. When strong leadership is absent, sales activities drop, and people don’t deliver their best performance.  That is why weekly sales meetings are so important; because they ensure that the sales team is focused on the right prospects with enough sales activity to deliver results.  Without that accountability, top-line growth won’t be what you need it to be.


Weakened Competitive Position:

Without a strong sales leader, a disproportionate amount of competitive sales opportunities will be lost to other companies.  Not only will that have a dampening effect on sales growth, but it will also start to undermine the morale of the team over time.  Salespeople want to be part of a winning team, so a hidden cost of poor sales leadership is an erosion of the optimism that salespeople need to be successful, which puts them in an even tougher competitive position.


Increased Turnover:

If left unchecked for long enough, ineffective development of the sales team undermines their success and it becomes a self-fulfilling prophecy that leads to increased turnover.  The best performing salespeople will leave and the ones that remain will be further disheartened.  So, a hidden cost of poor sales management is increased turnover amongst the people you need the most.


The challenge for most small businesses is that they don’t have the resources to bring in the caliber of sales manager they need to drive results, or that the sales force is not large enough to justify hiring a full-time sales manager.  That is when it makes the most sense to think about enlisting a fractional sales manager.


“The reason many small organizations stay small is because they don’t dedicate the necessary resources of time and money in the sales leadership or sales management function.”   – Anthony Iannarino

Comments: 8

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Jon Gruett February 22 at 10:34 pm

This article speaks so loud to those business owners that need to scale, do not have the budget and do not know how.

Dean Moore February 28 at 11:51 pm

It’s about putting the right pieces where they can do the most benefit.

Dean Moore February 28 at 11:54 pm

Another reason companies ( divisions) stay small is because the attention they need to grow on, is tied up with red tape.

Michael Robin Hood June 15 at 9:27 pm

Let me bore you with a little science first.

Neils Bohr showed it is possible for electrons to move between energy levels. Light contains energy. If a photon of light strikes an atom, it is possible for the energy in the light ray to be transferred to one of the low energy electrons moving around the atomic center. The electron with its extra packet of energy becomes excited, and promptly moves out of its lower energy level and takes up a position in a higher energy level.
This situation is unstable, however. Almost immediately the excited electron gives up the extra energy it holds, usually in the form of light, and falls back down to the lower energy level again.

Something happens to excite a potential client. It could be a commercial or talking to a friend. He has just been hit with a bolt of lighting which excites him to action. Our job is to keep the person in a state of excitement until he makes a decision. The longer it takes the more energy the potential client loses. Each time he encounters an unexpected obstacle he looses greater and greater amounts of energy until he is no longer in a buying mood and moves back to his normal orbit. In addition, he starts to shop, he starts asking around, the price becomes an issue, and on, and on.

How fast can you fall in love with your prospect? Remember the first love, you would do anything, waiting for her was painful in a good way. The phone was a way to stay connected and we were never afraid to call no matter the circumstances. We also have to stay excited and it is the sales manager responsibility to keep the sales process moving efficiently and the sale force motivated.

Happy Selling

William Pestano July 26 at 8:26 am

This is an important product, knowledge is important , but confidence is the game changer.

Brett Holtom August 12 at 6:23 pm

Do you want to be at the same level you are know 5 years from now? How you going to get there, any idea. By far Why most small businesses fail today is they lack a True daily sales leadership leader.

Larry Beauchamp January 14 at 10:55 pm

Structure is huge in my sales success so às a manager and a top sales performer I always shared this why sales force, weekly meetings are important to teach each our success stories of course but there is also some merit in showing a new sales person that a proven sales plan does work, again your team needs to see success, and that will build confidence in the individual, cause without confidence in yourself it doesn’t matter what you sell…you will not be believable to the customer

Bob Gravely January 23 at 9:16 pm

Most small businesses do not develop systems and processes, particularly for sales. Why? Because they don’t know how to. They are also impatient. They tend to confuse activity vs results as a KPI. Unfortunately, sales revenue is all that matters. Lack of management skills or developing those skills inside the organization shows up most dramatically in sales, yet many small businesses “promote” their best salespeople to managers.

As this article points out promoting them to the sales manager the company loses revenue and will likely lose the person as they eventually figure out management is not what they want or are best at. Being loyal, they try their best but fail and leave. This usually renders the company unable to recover and the owner closes or sells the business.


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