In small companies, there really are only two types of people; those who make the product and those who sell the product. There is no excess capital to be allocated towards anyone else if the company is to thrive, let alone survive. The only person to straddle both is the CEO, who ultimately has to choose one or the other anyhow.
CEOs often make the best salespeople because they know the product so well, but their time is an expensive resource. It’s just not realistic to think that a CEO can manage the sales team effectively and advance the business. There is also an accountability issue because there is nobody to answer to if the CEO turns out to be an ineffective mentor. Yet someone has to be the sales manager.
Typically, that job gets assigned to the best performing salesperson. This arrangement can work well in certain situations depending on the size, cohesiveness, and experience of the sales team. However, it is important to recognize that your best performing salesperson is not always an effective manager and there is an opportunity cost in not keeping that salesperson in production full-time.
The challenge for most small businesses is that the sales force is not large enough to justify hiring a full-time sales manager because it only takes a few hours per week to keep the sales team on point. That’s when it makes good business sense to outsource your sales management to a fractional sales manager.
Here is what you should expect your fractional sales manager to do:
- Evaluate current sales team and selling processes
- Implement a sales process that aligns tightly with the buying process.
- Bring predictability and reliability to pipeline management and sales forecasting
- Establish accountability for achieving clear, consistent performance metrics
- Provide training, coaching, and professional development of the sales team
- Analyze account turnover and eliminate potential threats to recurring revenue
- Recruit and train additional salespeople as needed
So, to put this in context, the choice really comes down to having the CEO or best performing salesperson be the sales manager, or to outsource the job to an experienced sales manager at a rate of roughly $2,500 per month, or $30,000 when annualized.
It’s a simple opportunity cost and for most small businesses, it is an obvious choice.