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Sales & Service

Sales: The $4 Million Mistake

Developing first line managers in the right way will pay huge dividends

Dollar Note and CoinImagine you were the head of sales and marketing at a large global firm and you were just given an extra $4 million in your budget.

What would you spend it on? A 30-second Super Bowl advert? Sales training meetings for your entire global team?  A fully supported marketing and branding campaign? Or (finally!) the upgraded technology you’ve been waiting for?

To jog you back out of your reverie: a member of the CEB Sales network estimated that the average cost of a single failed sales manager to be around $4 million.

This takes into consideration all the direct and indirect costs of lost productivity, unsustainable change management, seller turnover, poor team engagement, and lackluster customer experience, not to mention recruitment, salary, and training costs.

Develop Sales Managers Properly

In a prior post, we discussed the importance of the often overlooked, but absolutely crucial, first line sales manager. So, if it’s a big mistake to overlook the development of front-line sales managers, at least the response is surely straightforward: run these managers through some form of management training.

Unfortunately, this won’t cut it. Sales organizations must invest strategically in building the right skills. By not doing so, they not only risk the $4 million cost of a failed manager, but also lose the upside of a successful manager.

For starters, they miss out on increased revenue: CEB research found that seller percentage to goal is, on average, 19% greater when they have highly effective coaches.  Firms that don’t invest in the right manager development also risk higher seller turnover.  First line managers effective at coaching sellers can improve their teams’ intent to stay by 40%.

Finally, these organizations risk the successful implementation of change management initiatives.  Without on the job reinforcement from manager coaching, sellers lose 87% of training improvements within one month.

What Determines Sales Manager Effectiveness

To avoid making this mistake, sales organizations should invest their time and resources in three areas. Research shows that 73% of sales manager effectiveness is determined by three key attributes: selling, coaching, and sales innovation.

By investing in these areas, sales leaders will empower managers to prioritize their responsibilities and create a climate that enables sellers to exercise judgment and practice “Insight Selling” behaviors.


For more, download the research e-book from this page.

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