Creating A Business Case For Sales Manager Enablement
Apr 20 2017
You might think that the changing nature of B2B selling and the pressure of digital transformation would force sales leaders to develop the role with the greatest leverage first. And that’s the role of the frontline sales managers. They directly lead quota-carrying salespeople. Sales managers are not only responsible for implementing the current sales strategy and ensuring performance and productivity, but they are also the key to driving longer-term sales transformations. So you would assume that sales leaders prioritize investments in this role, correct?
Almost 20% don’t invest in their sales managers, but only 5.5% don’t invest in their salespeople
However, we have been monitoring the investments in salespeople and sales managers for over two decades, and every year, the results are the same: Organizations invest more in their salespeople than in their sales managers. In our 2016 Sales Enablement Optimization Study, 18.6% of organizations did not make any development investments in their sales managers, as compared to the 5.5% who scrimped on training when it comes to salespeople.
Even more light is shed on the problem when you compare investments made by those organizations with an enablement function. The number of those who don’t invest in their sales managers at all is much smaller (11%) in the group of those with an enablement function as compared to those without enablement (24.7%). And those with an enablement function spend noticeably more in the ranges between $1,500 and $5,000 per person per year. See more details in our 2017 Sales Manager Enablement Report.
Sales manager development has a clear and measurable impact on KPIs such as quota attainment, revenue plan attainment, and win rate.
As an example, let’s look at win rates. The study’s average win rate for forecast deals was 46.2%. Those study participants who invested less than $500 got pretty much the same average win rate (46.1%). Those who invested more than $5,000 achieved a much better win rate of 51.4%. That’s a difference of 5.3 points and an improvement of 11.5%. Check out our 2017 Sales Manager Enablement Report to see the impact on other key performance indicators.
If investing in sales manager enablement has such a positive impact on performance, why aren’t more organizations doing it?
One possible answer is a lack of general awareness of the impact. But often it isn’t so much the cost of the investment as it is the lack of perceived value. Sales leaders looking to improve performance need to get better at making the business case for the investment in sales managers. And that requires more than putting numbers together. An effective business case is a comprehensive story put into your organization’s context and culture, and told in your organization’s language, enriched with compelling data to support your message.
Creating a business case for sales manager enablement
- Establish awareness and consciousness about the complexity of the sales manager’s role and their leverage effect in the organization: Now, think about how many salespeople a sales manager leads in your organization: 6, 8, 10, or even more? If improving their capabilities can, in turn, improve the performance of multiple individual contributors, how could you afford NOT to invest? For organizations looking to transform their sales organization, once they’ve gained executive support and agreed on their destination, investing in sales manager enablement is the surest path to success.
- Clearly show the positive improvements of developed sales managers on key performance indicators as discussed above form the foundation of the business case for sales manager enablement. Who can ignore measurable improvements regarding quota attainment, win rates and revenue plan attainment?
- Highlight the tremendous impact of sales coaching on win rates: Improvements between 11.5% and 27.9% are possible. To achieve those results, a couple of prerequisites must be in place. Coaching has to be defined and a coaching process that covers the entire customer’s journey has to be implemented. Ideally the coaching process mirrors the enablement framework to drive adoption and reinforcement of the initial enablement investments in salespeople.
- Create awareness of the impact on turnover rates. High-performing salespeople expect a sales manager to empower them to be even more successful. If that’s not the case, and they don’t feel supported in their quest for even greater levels of success, they often leave. In this context, the additional costs that are associated with high turnover rates, such as recruiting and hiring costs, onboarding costs, and the costs of underperforming territories, are directly attributable to poorly developed sales managers.
- Put the data in your organization’s context and language and create a story: Neutral business cases don’t impress anybody unless you can put things into your organization’s context. And that requires a story AND an assessment of your sales manager maturity. You need a structural maturity and a skill-based assessment. Then, you need to show a phased approach to how to get there, and by when, in your organization.
The most challenging part is often the first bullet point here: Creating awareness and consciousness about the complexity of the sales manager role. Play with our sales manager triangle and the driving license analogy to visualize the magnitude of the problem.
Stay tuned: Next week, we will look at the details of assessing sales manager maturity!
- Do you develop sales managers in your organization? If so, how do you develop them?
- How did you create a business case?
- What was the internal selling process to get senior executive buy-in?
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