Why Ineffective Sales Management Is So Costly

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 essentially it 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

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