Do Sales Managers Add Value?

A recent survey of more than 3000 salespeople reveals that the majority of sales managers are not driving business growth, or any other critical business objectives.

You may recall Shakespeare’s quote from Henry VI: “The first thing we do, let’s kill all the lawyers.” which was of course a somewhat harsh approach to the problem. And of course I am not actually recommending that we kill all sales managers. But I do have serious doubts about the actual business contribution of many sales managers. They tend to be very well compensated, and many were highly productive as salespeople, but how do you truly measure the ROI of your sales management?

You may say that sales results will prove a sales manager’s worth (or lack thereof) but how do you assess the manager’s real contribution to those results. If your entire sales management team vanished one morning, would your sales volume decline significantly? Maybe…or maybe not.

Please understand that this has nothing to do with my personal feelings or opinions about sales managers. I have many good friends who are sales managers and I truly respect the work they do. However, there is significant evidence that in many cases, sales managers are not driving sales growth or adding other tangible value for their businesses.

Frontline Learning conducted a survey of more than 3000 salespeople in a broad range of markets and industries. The survey results were both interesting and troubling:

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• 56% of salespeople reported that their direct manager adds “little value” or “no value” in helping them achieve their sales objectives.
• 62% of salespeople do not provide their sales manager with accurate information regarding prospects and sales call results.
• 58% consider their direct sales manager either a “necessary evil” or a “shameless waste of resources.”

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Whether or not these perspectives are valid and objective, just the fact that salespeople have these opinions is problematic. Even if you have a highly competent, motivated and hard working sales manager, how is he or she supposed to be effective when dealing with a sales force that has such a low opinion of sales managers? And, even more disconcerting, what if the salespeople are right?

What if We Just Get Rid of Them?

In 2005 a US manufacturer of industrial equipment decided to dramatically scale back the ranks of their sales management team. They had determined that the sales management function have evolved into essentially a data reporting position, with regional sales managers delivering sales data every week, also providing interpretation and context for the results (good or bad). Sales Managers for this company also handled customer problems and complaints that came to them via the sales representatives. In terms of actual sales planning, coaching and training, these activities were minimal or non-existent.

The manufacturer developed an online system to automate the sales reporting function, and captured the interpretation/context directly from sales representatives, so the need for “on the ground” field sales management had diminished significantly.

The company’s sales force of 400 field sales representatives went from 30 regional sales managers to 10. And those 10 were focused on the geographic areas with the most growth potential.

Interestingly, the manufacturer so no negative impact on their sales results. Even a year later, there was no discernable negative impact. The 10 remaining sales managers received significant training and development support to help them transition to the role of on-the-ground sales coach. These managers were eventually able to drive a significant increase in sales volume from these high potential territories.

Here is a summary of the lessons this company learned from their experience:

• Determine where you have genuine growth potential, and where you need to focus primarily on maintaining the business. Your sales management model should be different for areas with different growth potential.
• For areas where you are primarily focused on maintaining the business, use technology and systems to collect data, not people. You may still deploy “sales managers” but they are really “sales maintenance managers” and should be compensated differently (less) than your sales growth managers.
• Clearly define the role of your growth-driving sales managers. It is not enough to tell them they need to be “in the field” X number of days a week. The specific coaching and sales planning activities need to be detailed.

For more details on specific activities for growth-driving sales managers, see Frontline Learning’s REAL Coaching program. It is a detailed, specific process designed to help sales managers add real value to the selling cycle.