How Investing in Sales Managers Pays Off, Significantly!
Sep 15 2016
Sales managers, especially frontline sales managers (FSMs), have the highest leverage effect in any sales organization. Just look at their average span of control in your organization. Do your sales managers lead six, eight, ten, or even more salespeople directly? That’s the leverage effect we are talking about. Imagine the value a highly skilled frontline coach can create for the entire sales team, compared to the damage an undeveloped manager could cause.
Frontline sales managers are the most important role for salespeople – not enablement, not sales operations, and not the sales leader. This role has to implement the sales strategy in the field, with their sales teams, and with the customers. Sales strategies get implemented there, at the frontline, at the edge, or they don’t get implemented at all.
Organizations with enablement discipline invest more in their sales managers than those without
- Among all participants in our CSO Insights 2016 Sales Enablement Optimization Study, 54.7% with an enablement function spend more than $1,500 per sales manager to develop their sales managers, compared to 33.4% without an enablement function.
- It’s interesting to see that 25.7% of the study participants without an enablement function spend nothing at all to develop their sales managers, compared to 10.1% with an enablement function.
In recent years, frontline sales managers have increasingly become a target audience for sales force enablement teams. As in last year’s study, the role is, following salespeople, the second most important one. Sales leaders recognize more and more the key role of their frontline sales managers and acknowledge that investing in this role is not about adding costs to the bottom line; it’s about adding value to the top line. Experienced sales leaders also know that the cost of doing nothing is higher than simply the cost of bad performance. It’s higher because it adds to churn: good salespeople leave because of their managers, not because of the organization. With that in mind, what’s the impact of investing in frontline sales managers?
Investing the right way in sales managers improves key sales performance metrics
Based on our data, organizations realize a tangible business value when they invest in their sales managers. We looked at the differences between annual investments smaller or larger than $2,500 per person per year:
- Win rates: We found that win rates for forecast deals could be improved by 9% up to 50.5% as compared to the study’s average win rate of 46.2%.
- Revenue plan attainment could be improved by 18.4% up to 106.7% as compared to the average revenue attainment of 90.1%.
- Quota attainment could also be improved by 4%, based on the study’s average quota attainment of 55.8%.
Not investing in sales managers, or not investing enough, or investing the wrong way doesn’t keep your performance average; it’s actually worse, because sales performance metrics end up below average. As an example, organizations with investments < $1,500 per sales manager per year reported a decline in their win rates for forecasted deals of 9.5%!
No sales leader can accept a situation that leads to a win rate decline of 9.5% compared to average performance. The time to rethink development programs in frontline sales managers is now, to prepare the stage for a successful 2017.
Next time, we will look at the main steps to set up frontline sales manager development programs the right way. Be warned, it’s much more than just providing a few coaching classes…
Questions for you:
How much does your organization invest in sales managers per person per year?
How do investments rank compared to those in salespeople?
What’s the business impact you experience in your organization from investing in sales managers, before and after?
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