What is a fractional sales manager? – The definition.
A fractional sales manager is outsourced sales manager hired by small businesses. Working for several small businesses at the same time, fractional sales managers earn the same wage as if they would work full time, but small businesses cut their expenses by sharing the resource. Fractional sales managers are similar to part-time CFOs. Over thirty years ago, financial experts realized that mid-sized businesses needed the talent of a CFO, but could not afford one on a full-time basis. The outsourced CFO business was born to bridge this gap, with companies like B2BCFO leading the way. Today, B2BCFO alone has over 600 outsourced Chief Financial Officers serving a diverse array of clients. These same mid-sized and small businesses have a similar struggle in the sales management arena. With a 2-10 person sales force, it can be a financial impossibility to employ a full-time sales manager with the requisite skills to move the organization forward. A fractional sales manager divides his or her time between 5-10 local businesses, spending one-half a day with each. By dividing the cost of a superstar sales manager, businesses get the intellectual property, best practices, and management skill they need, but at a cost they can afford.
Who uses fractional sales managers?
Fractional sales management is a good fit for B2B sales teams of less than ten. B2C companies can also benefit but the higher the sales transaction and the longer the sales cycle the better. Here are just a few examples of companies that have benefited from fractional sales management:
- Engineering/Architectural Firms
- Software Developers
- Other IT companies
- Staffing companies
- Construction (roofing, home builders, paving, remodelers, etc.)
Regardless of industry, any company that has “leakage” in the sales department can benefit. Here’s a few of the areas we see profit leakage:
- Closable deals lost due to poor sales process or salesperson skills
- Salesperson turnover due to under-management or under-coaching
- Poor hiring process and systems that lead to under-performing reps
- Organizational stress caused by “not knowing where the next deal will come from”
- Under-use of technological sales tools. Companies have saved hundreds of thousands of dollars on this item alone and increased sales simultaneously. We realize this sounds unbelievable, but it’s true.
- Failure to create a system that religiously seeds best practices amongst the entire sales force
It’s difficult to manage a small sales force. When faced with the challenges of managing a small sales force, businesses typically fall into one of three traps:
- No one manages sales. The owner feels that the staff is experienced enough that they don’t need a sales manager so she lets “the inmates run the asylum.” It’s true, a tenured sales force needs less sales management than a less tenured one. However, there’s a big difference between sales babysitting and true sales management. Sales babysitting accounts for activity and focus on whipping the sales force into working harder. A sales management superstar brings best practices, coaching skills, and the ability to close the marginal deals that are being lost.
- The owner ½ manages sales. Business owners already have 37 jobs. Add sales manager to the list and guess what happens? It gets ½ done (or less) and there really isn’t much sales management going on. We have never met an owner who says, “I love managing sales.” It’s a tough job that tends to get pushed to the bottom of the to-do list. This represents a big opportunity for companies. Effectively, the benefits of sales management are not being realized. Placing a sales management pro into this void can remonetize neglected aspects of the sales function.
- The best salesperson is asked to keep selling and also fill the sales manager role. This is the most destructive of the three traps. This scenario typically plays out like this – the sales manger’s sales production decreases due to the increased time/emotional demands and the sales person does an average or below job as sales manager. Trading a great sales producer for a weak sales manager is a horrible trade. Replacing the selling sales manager with a fractional sales manager is a relief to the salesperson and always yields a better performing team.
Pros and cons of fractional sales management
Despite the many benefits of fractional sales managers, it’s not for every company. Yes, a part-time sales manager can provide most of the benefits of a rock star sales manager for a fraction the cost, but there are some important challenges of the model. The biggest adjustment for clients is losing the “babysitting effect.” Let’s face it; it’s very comforting knowing that Old Bob down the hall is in the office every day babysitting the sales function and sales people. He may not be adding much value, but at least he’s at his desk all day. A fractional sales manager is only in the office ½ a day a week. By definition, the fractional sales manager cannot do all the tasks which a full-time person can. However, the fractional sales manager has the talent to accomplish objectives that are beyond the skill of Old Bob. That’s the trade off. The company that needs skill applied to the sales function, not just time, will benefit the most. Another issue that can creep into a part-time sales management engagement is speed of implementation. The sales manager creates a plan that will revolutionize sales results and the owner wants the entire plan done NOW. It’s understandable, however, impossible to accomplish in a few hours a week. All the great plans will get implemented, but in due time. Savvy fractional sales managers have learned to remind the business owner that they have gone years without these initiatives, so a few months more isn’t that long to wait for massive change.
What to expect from a fractional sales manager
Below are some of the direct and indirect benefits you could expect from an interim sales manager. Direct benefits
- Increased lead flow
- Implement dozens of best practices from high-performing sales teams
- Create and upgrade the Proven and Repeatable Sales Process (PRSP)
- Implement technological tools, tricks, and process to lower sales costs and increase sales
- Improve salesperson retention and performance with individualized coaching sessions
- Create a predictable sales pipeline so future sales levels can be predictable and accurate
- Create and manage the company-wide sales process so salespeople cannot “twist management’s arm” by threatening to quit and walk out with the sales process
- Reduce time demands upon the CEO so their valuable time can be redeployed to a higher and better use
- Reduce turnover
- Create a performance sales culture
- Demonstrate to the entire company that the sales function is important (via the investment in sales management)
- If desired, technological leverage can create an opportunity to reduce dependence upon a weak salesperson to the level the person can be redeployed or released
Is this a trend?
The short answer is yes. Thirty years ago, no one knew what a part-time CFO was. Ten years from now, outsourced sales management will be commonplace amongst small sales forces. The economics of the system are simply too powerful to ignore. Our prediction is that this trend will play out similarly to CFOs. That is, successful corporate sales pros will receive buyouts or retire. Some of them will desire a position where their considerable skill can be put to use but without the hassle of full-time corporate employment. This rich talent pool can be re-purposed for the benefit of small businesses to permanently alter their sales system for the better. salesQB is always looking for sales superstars to serve businesses in our local markets. If you fit the bill, please contact us.