Management makes a big mistake when they interfere with a salesperson’s ability to sell.
One of the biggest errors a company makes is to promote their top producing salesperson from selling to managing. It is very seldom true that the best salesperson makes the best sales manager. They might possibly make a great sales manager, but so might someone else who is not a top producer. You lose a lot of sales with the hope of stimulating the performance of the other salespeople. It rarely works as planned. The typical end result is reduced overall sales, disappointment in the performance of the sales manager and a sales team that is frustrated with the unreasonable demands of a mediocre manager.
Another common mistake made by management is to require top sales performers to get involved in other, non-sales related tasks and assignments. One of my clients asked their top salesperson to handle all of the company’s IT and computer issues. It just so happened he was the most qualified person within the company to handle those issues, but at what cost to the company. They were looking to save money by not hiring an IT Technician or to bring in a consultant. An IT professional hired full time might cost the company a minimum of $80,000 and they would only need his services twenty-five percent of the time. To hire a consultant might cost $90.00 dollars per hour for 500 hours per year at an annual cost of $45,000.00 per year. Facing those two possibilities, management is looking to save a big chunk of change by assigning the task to someone within the company. Let’s take a look at what it is really costing the company to take their top sales person out of the sales arena.
The numbers I’m using may not be accurate for your company, but use the formula and substitute your own numbers. Let’s assume that the salesperson you have assigned other duties is selling $1.5 million to total sales. The margin on sales is 23%, making the gross margin $345,000.00 dollars. Assuming the salesperson is spending twenty-five percent of his time solving computer issues, we can reduce the total sales and gross margin by twenty-five percent or $86,250.00. This calculation assumes the salesperson, turned computer technician, can solve problems as quickly as the professional. In reality, it may take the salesperson a lot longer to do the work of an IT professional. It will never make financial sense to take salespeople out of the sales arena. The lost sales and profit is far greater than their contribution in other areas.
At The Business Performance Group, we deal with the salesperson, sales manager dilemma every day. Do you promote great performance? Do you provide training “in house” because we have been raised in a culture that suggests you should never hire someone to do something you are perfectly capable of doing? The best salespeople are not always the best trainers and managers. You must consider what you really want to achieve and evaluate what it will actually cost you. If you are looking for ways to reward a top salesperson, it may be to leave them in sales and to allow them to write their own paycheck in the form of commissions. As far as sales management is concerned, selecting someone who is a great manager of people, with skills in the area of goals, accountability and achievement may be the best choice. Very few sales managers know how to teach and train sales and even fewer actually do it. Hire a qualified professional sales trainer to work with your salespeople. They will produce far better results on a consistent basis, day in and day out. The investment will be less than the cost of doing it within, and the return on your investment will be far greater. In fact, the difference in cost and the subsequent increased results between in-house training and hiring a part-time sales trainer, will pay for the training many times over. Let salespeople sell, it’s what they do best, and where you will find your greatest profitability.