Hidden Costs of Under-Managing Sales
Many mid-sized companies cannot justify the expense of a full-time sales manager as their sales force may only be a handful of salespeople.
But, when the sales team is under-managed it can cause some serious gaps in productivity and effectiveness.
These are the 9 I see most often:
🎯 Headaches - If you have a sales function, you will eventually have issues and need some management. Without a solid sales manager, these management headaches usually get bumped up to the CEO.
🎯 Turnover - With no one truly mentoring or managing salespeople, issues fester and eventually someone quits. Each of these exits costs tens of thousands of dollars in recruitment and lost sales.
🎯 Staff Under-Performance - “What gets managed gets done.” If nothing is getting managed, nothing is getting done (at least on some fronts). An incremental sale here and there can impact the bottom line significantly, making a seemingly small misstep add up to quite a bit of missed profit opportunities.
🎯 Fall Behind Trends - Technology and sales have been permanently linked and someone in every organization needs to keep up with this rapidly changing landscape. If it’s not the sales leader, then whom? Missing out or getting significantly behind a trend can really cost you.
🎯 Holes in the Sales Process Never Get Fixed - A great sales process is the hallmark of a great sales organization. However, every sales process has holes or develops them. The sales leader is responsible for keeping the selling process finely tuned. Paying a team of salespeople to use a half-broken process is like sending loggers to cut trees with dull saws.
🎯 Can Only Hire Experienced (and Expensive) Salespeople - Great salespeople are expensive to hire. Hiring an inexperienced future star and training them is preferred. However, without a permanent mentor, these hires will fail. Some companies have tried assigning new salespeople to the old pros, but this only works for awhile. The pro eventually realizes they are not getting paid for the training or the success of the new hire and will return to focusing on their own clients. The lifetime cost of paying $25k-50k per hire per year more simply because there is no mentoring system quickly adds up.
🎯 Old Timers Get Lazy - You can’t fight human nature. With no sales leadership in place, the seasoned pros will find the easiest way to hit their targets and stop working hard. It’s not their fault, it’s just human nature. We’ve seen organizations discover salespeople working less than half the time, holding second jobs, or delegating work to spouses or kids if the management is lax.
🎯 Resources are Stolen from Other Functional Areas - Just because there is no dedicated sales leader doesn’t stop the work of a sales manager from popping up. And when it does, someone has to do it. People, most likely the CEO, are yanked from their real jobs to fight today’s fire. This reactionary management cascades into different issues as problem A is solved, but it creates problem B.
🎯 You Don’t Know What You Don’t Know - The function of sales adds the most profit to the organization, so under-management creates expensive issues. These may not be in your face or readily apparent, but they are eating away at your profit.
You may be experiencing some of these 9 costs, but since a full time sales leader doesn’t make much sense, you succumb to one of three bad options:
- do without any sales management
- the business owner steps into the sales management role (at the cost of stepping out of the CEO role)
- a salesperson attempts to fill the role of selling sales manager (FYI, this rarely works well).
So, what to do?
An outsourced or fractional sales leader may be an option. This can take a couple forms:
a) bringing in a temporary sales manager until a permanent replacement is found
b) permanently outsourcing the position
I want you to feel confident in your sales systems and processes and your ability to take things to the next level.
- If you’d like to receive more tips on the regular, sign up for my weekly email CEO Sales Tip Saturday here.
- Want to explore fractional sales leadership? I work with a limited number of clients each quarter. Whenever you’re ready, book a call with me here. Based on where you’re at, it may or may not be a great fit, but either way you'll leave the call with some new insights.
- Otherwise, you can check out my free training, “The 5 Pillars of an Effective Sales Machine” here.
500+ sales managers coached around the world / I mentor your sales managers so they can keep your sales team engaged and build your business / Creator of the Sales Leader Trident™
1yOoooh can’t wait to read this!