Fractional sales management serves companies with small sales forces of two to fifteen salespeople. These teams are difficult to manage cost-effectively due to the natural diseconomy of scale within small sales departments.
Typically, this diseconomy of scale is addressed in one of five ways:
- The owner acts as the sales manager. This may seem logical, but it adds another major responsibility to an already overloaded business owner.
- No one manages sales, or the team self-manages. This can appear workable for a stable team; however, without leadership, performance can decline and the team may never reach its full potential.
- Hiring an inexpensive sales manager. While cost-effective, sales management is a high-skill function. A low-skill manager becomes a “sales babysitter,” bringing little strategic value. In many cases, no manager is better than a poor one.
- Hiring a high-caliber sales manager. This solves the skill issue, but the cost becomes too high when spread across only a handful of salespeople.
- Promoting the best salesperson to sales manager. This fails nearly every time—often about 99%. Strong salespeople rarely make strong managers. The result is declining sales, low morale, and eventual turnover once the misalignment becomes clear.
Fractional sales management approaches the diseconomy of scale differently. First, good sales management increases profit, while bad or nonexistent management reduces it. Therefore, hiring a low-skill manager or ignoring the function is not a viable solution.
Second, instead of filling a part-time management role internally by stretching an owner or salesperson too thin, a fractional model provides a part-time sales manager who focuses on what matters most.
There is no rule that says a sales manager must work forty hours per week to be effective.
Third, once companies accept that the diseconomy of scale cannot be perfectly eliminated, they can choose the “best workable option” rather than searching endlessly for a perfect one.
Because fractional sales managers work only a portion of the week, they prioritize only the highest-impact activities. While not every need can be addressed, completing the most profitable tasks allows companies to access a high-skill manager at a cost-effective rate.
Where did the idea of fractional sales management originate?
About thirty years ago, mid-sized businesses realized they needed CFO-level expertise but could not afford a full-time CFO. This led to the birth of the outsourced CFO industry. Companies like B2BCFO pioneered the model, and today B2BCFO alone has over 600 outsourced CFOs.
Small and mid-sized businesses often face similar challenges in sales management. Managing a 2–10 person sales team internally is rarely cost-effective.
A fractional sales manager divides their time between 5–10 local companies, devoting part of the week to each. By sharing the cost of a skilled sales leader, businesses gain access to proven systems, best practices, and strategic expertise at a price that fits their size.
What types of businesses can use fractional sales management?
Fractional sales management is ideal for B2B teams with fewer than twelve salespeople. B2C companies can also benefit, but businesses with longer sales cycles and less transactional sales processes tend to gain the most.
Industries that commonly benefit include:
- Manufacturing
- Staffing companies
- Distributors
- Engineering and architectural firms
- Software developers
- IT companies
- Construction (roofing, home builders, paving, remodeling, etc.)
- Marketing firms
- Retail
- Trucking
What to expect from fractional sales management
Below are the direct and indirect benefits companies often experience.
Direct benefits:
- Build a Proven and Repeatable Sales Process (PRSP)
- Increase lead flow through best practices and strategic hacks
- Reduce lead costs by reallocating resources effectively
- Create a predictable pipeline that drives accountability
- Leverage best practices from top-performing sales organizations
- Use technology and tools to lower sales costs and increase revenue
- Improve salesperson performance through individualized coaching
Indirect benefits:
- Lower turnover
- Prevent salespeople from holding the company “hostage” by owning the sales process
- Build a culture of sales excellence
- Free the CEO’s time for higher-value work
- Demonstrate organizational commitment to sales through professional management
- Use technology to reduce reliance on weaker sales performers
Pros and cons of fractional sales management
While fractional sales management offers many advantages, it is not perfect for every company. A part-time manager can deliver most of the value of a top-tier sales leader for a fraction of the cost—but there are trade-offs.
The biggest adjustment for CEOs is losing the “babysitting effect.” Many owners feel reassured simply by having someone like “Old Stan” in the office all day, even if he adds little strategic value. A fractional manager, however, may only be onsite half a day each week.
By design, a fractional manager cannot perform every task a full-time manager could. Yet their skill allows them to accomplish far more than a low-level manager. Companies that need expertise—not time—see the biggest benefit.
Another challenge is the pace of implementation. Businesses without a competent sales manager may have gone years without progress. A fractional sales manager brings the skill to initiate change, but not on a full-time schedule. Experienced fractional managers remind owners that slow, consistent progress is far better than no progress.
Is this a trend?
Yes. Just as the outsourced CFO model grew rapidly, fractional sales management is on the same path. The economics are simply too compelling to ignore.
As corporate sales leaders retire or seek more flexible roles, many will shift into fractional sales management. This creates a rich talent pool for small businesses that need high-level expertise but not full-time staffing.
salesQB is always seeking exceptional sales leaders to serve our local markets. If you are a fit, we invite you to contact us.
