You’ve heard the story again and again: A company promotes a top salesperson to sales manager and suddenly the person is struggling. The skills that made the individual a top rep aren’t helping him or her succeed as a manager and may, in fact, be hindering that success. So, is there a cost associated with making a poor manager promotion decision? And, conversely, is there a measurable link between the skills of a sales manager and the top-line performance of the sales team?
The answer to both questions is an emphatic yes, according to a new study by Wilson Learning Worldwide (www.wilsonlearning.com/?site=Americas) titled, “Sales Management as a Source of Competitive Advantage: How Sales Managers Add Value to the Organization.” The results provide convincing evidence that a sales manager’s skills are a strong predictor of all three sales performance measures: sales revenue, customer satisfaction and salesperson satisfaction, says Michael Leimbach, VP research and design for Wilson Learning and the author of the study.
Wilson research has found that effective sales managers play four critical roles within the organization: sales tactician/business operations management, sales strategist, contributor, who uses business and product knowledge to make needed decisions, and facilitator. Sales managers with high-level skills in these areas had, on average, 29% higher revenue and 47% higher employee satisfaction and 16% higher customer satisfaction ratings than did sales managers with low skill levels. “Effective, first-line sales managers have a direct and independent affect on revenue,” says Leimbach. “Also, because effective sales leadership leads to more satisfied salespeople and customers, this affect is sustained over the long run.”
So what about the top-performing rep who is struggling to lead? Leimbach says there are at least five costs incurred when you take effective salespeople out of the field and they become ineffective managers: loss from transitioning the customer base, salesperson attrition, reduced salesperson effectiveness, loss of goodwill in the marketplace and increased difficulty hiring new salespeople as the reputation of the manager becomes more widely known. Or as one senior sales manager told Leimbach: In my experience, the cost of a single bad district manager promotion is in the millions!
Leimbach’s message to organizations is this: Before you automatically promote your top-performing rep to the manager’s chair take a close look at the specific hats the rep will need to wear as a manager. Then make sure the rep has the skills and competencies required to meet your expectations of a manager. Otherwise you’ll miss out on a 29% increase in top-line performance while incurring the enormous costs of failure.