Quite often, small companies don’t have the resources to hire the caliber of sales manager they really need. Instead, they either designate one of their senior salespeople to manage the team while continuing to sell, or they promote that person into a full-time sales manager role. All too frequently, neither approach works. That’s because it essentially means pulling one of your top producers off the line—the very place you need them most—and there’s no guarantee that a top producer will make a great coach. Yet coaching 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, responsible for ensuring there are enough sales activities to deliver a healthy pipeline and for coaching the rest of the sales team to improve their win rate. When so many sales opportunities end in “No Decision,” improving that win rate becomes the fastest way to drive better sales results—one of the key reasons effective sales coaching is so essential.
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’re not always linear. Buyer priorities shift, and the salesperson must be attuned to 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 approach in the sales conversation. Presumably, many of those opportunities could have been won with more effective sales coaching, which could add significantly to top-line growth.
Insufficient Accountability:
The sales manager is responsible for ensuring a healthy 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 work. That’s why weekly sales meetings are so important—they ensure the team is focused on the right prospects with enough 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 number of competitive opportunities will be lost to other companies. Not only will this dampen sales growth, but it will also undermine team morale over time. Salespeople want to be part of a winning team. A hidden cost of poor sales leadership is the erosion of optimism that salespeople need to succeed, which puts them in an even tougher competitive position.
Increased Turnover:
If left unchecked long enough, ineffective development of the sales team undermines their success and becomes a self-fulfilling prophecy that leads to higher turnover. The best performers will leave, and those who remain will become further discouraged. This makes increased turnover another hidden—and costly—consequence of poor sales management.
The challenge for many small businesses is that they don’t have the resources to hire the caliber of sales manager they need to drive results, or their sales force isn’t large enough to justify a full-time manager. That’s when it makes the most sense to consider 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
This article speaks so loud to those business owners that need to scale, do not have the budget and do not know how.
It’s about putting the right pieces where they can do the most benefit.
Another reason companies ( divisions) stay small is because the attention they need to grow on, is tied up with red tape.
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
This is an important product, knowledge is important , but confidence is the game changer.
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.
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
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.