Sales and Sales Management Blog

June 26, 2014

Why Producing Sales Managers No Longer Make Sense (If They Ever Did)


Although many companies believe they are maximizing dollars by requiring their frontline sales managers maintain and grow their own book of business, are they really getting the value they expect or are they costing themselves sales and money in the long run by trying to save a few bucks on a manager’s salary?

Let’s examine the duties that are expected from a producing sales manager as gleaned from several producing sales manager ads on CareerBuilder:
•    Recruiting and hiring salespeople–and often clerical staff
•    Training, coaching and mentoring those people
•    Resolving customer issues
•    Coordinating and working with other departments such as shipping, manufacturing, underwriting, finance, etc.
•    Monitoring the local market and competition and keeping management informed of market changes and opportunities
•    Creating and implementing a local sales and marketing plan
•    P&L responsibility for the local office or branch
•    Conduct sales and training meetings
•    Complete reports for management on a weekly, monthly and annual basis
•    Creating annual office or branch budget
•    Creating monthly and annual sales projections
•    Operating as company’s ambassador to the community by attending community events and maintaining a high visibility in the community
•    Other duties as assigned

And then the kicker:
•    Maintaining a high level of personal sales activity and personal production

The first dozen responsibilities listed above are management activities that are—or should be—critical to the growth and profitability of the company.  Most of these activities require someone with strong management, problem solving, and analytical skills.  To properly perform these activities, the individual must have a frame of reference to resolve customer issues, to develop sales and marketing plans, to maximize the return on assets, to properly analyze the local market and competition, and especially, to recruit, train and mentor salespeople.

Only the last item is a purely in-the-trenches sales activity related item.  Yet, as anyone who has been in sales understands, to meet that requirement of ‘maintain a high level of personal sales,” selling must be a full-time job.

The Requirements For The Job
Go further into the job description and you find the ‘requirements’ section, describing the background and experience this individual must have to be considered for the job.  Most typically, that description includes these items:
•    3-5 years direct industry sales experience
•    Proven high level of production, meeting or exceeding quota
•    Strong product knowledge
•    Proven industry contacts and book of business

What’s missing in the requirements for this position?  Of course, not a single word about management skills, aptitude, training or ability.

And how is this individual typically paid?  Usually some combination of base salary, commissions and overrides, or worse, overrides and commissions.

Does It Make Sense?
The above list of responsibilities was gathered from a number of job postings from a number of industries including retail, banking, insurance, securities, medical, software, chemical, consulting, and others.  Most of these job postings listed a majority of the above requirements including the personal production requirement.

Although traditional in many industries, does this combination of duties make sense?  If it does:
•    why are so many offices in these industries poorly run?
•    Why the constant harping by senior management for the offices to keep costs down?
•    Why complaints by marketing that leads aren’t being followed up?
•    Why the complaints by manufacturing and shipping that didn’t know certain things about various orders?
•    Why are commission checks so often wrong?
•    Why is the training and coaching in these companies so poor?
•    Why are so many poor hiring decisions made by the company’s sales managers?

The list could go on.

The reason of course is obvious.  The company didn’t hire a manager, they hired a salesperson to try to keep the herd in line and hopefully end up with the sales numbers the company wanted—and that sales manager is expected to make sure they do through his or her personal production.

Sales management as so often practiced today is hardly deserving of the term.  And despite the onus being placed on the sales manager by the company, the problem doesn’t lie with the sales manager.  Typically, the company got exactly what they wanted—a top salesperson willing to assume responsibility they haven’t been prepared for in exchange for a title.

Can Companies Afford to Continue This Way?
For most companies, selling is becoming a bigger and bigger challenge.  Competition is fierce, their products are most often indistinguishable from their competitor’s, their markets are becoming more fragmented, their prospects are better educated and more demanding than ever before.

Management as a sideline, although traditional in a great number of industries, is costing companies billions of dollars every year in lost opportunities, bad hires, poor local market decisions, lack of resource utilization and lost sales.

In a complex world with razor sharp competition and astute prospects who often know more than the people trying to sell to them, companies can no longer afford to use management positions as rewards for past production.  Frontline managers are increasingly becoming the focal point of a company’s success or failure.

Many companies have already begun to change their management philosophy and have eliminated the selling manager position and have replaced them with full-time, qualified, and trained managers.  To this end, they have instituted manager training and coaching programs hiring outside companies and coaches to work with their new and existing management staff.

Take Action Now
If you are in a producing manager role, hire a sales management coach to help you prepare for the realities of the changing environment you are entering.  Those items within your job description that haven’t been emphasized in the past are becoming increasingly important.

If you’re a senior manager, consider whether a producing manager is really worth the lost revenue and lost opportunities.  Your company’s selling environment isn’t going to get easier.

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2 Comments »

  1. I am planning to shift my focus in sales now and have worked a little in same. Thanks for the detailed information, I am sure this will be a great help. I am scared from the entire sale concept, it it tiring, challenging and result oriented. But I guess preparation and planning is the key 🙂

    Comment by Joana_JW — June 30, 2014 @ 12:51 am | Reply

  2. I appreciate the article but I do not completely agree. I was in the role of the Sales Manager position in the mortgage industry at my past employer for about 6 years and currently hold the role of Production Manager at my new company for the last 6 months. One of the reasons I enjoy this dual role so much is that it affords me the ability to remain “in-the-trenches” as this article references. It’s being an active participant in the sales role that allows to keep close to the street, empathize, and relate to the other sales team members. Far too often, managers at higher levels, who are no longer producing on a regular basis, lose touch and forget exactly what it takes to produce in an ever-changing environment. It’s one thing to read and pass along information from above but it’s a whole new game when you’re actively practicing what you’re preaching.

    I’ve found through my professional experience that team members will respect a leader more when they’re actually participating in the same activities as opposed to passing along mandates on how they remember doing things or just forwarding along emails and guidance from above. There’s no doubt that the dual role does add a lot of responsibility but if you’ve been in the business for a considerable time then you’ve built a book of business and have the ability to not have to grind it out daily to find new business. There’s also a profound love of assisting customers and it’s hard to give that up quite yet. I presume that there becomes a time when a leader’s growth changes from individual customers to growth of the team, branch, area, region, etc. but until that time comes I prefer to be doing the tasks that have always provided me the greatest joy; assisting customers finance new homes and assisting my team members in becoming the best they can be simultaneously.

    Thank you for the informative article and perspective.

    Comment by stevenwolo@gmail.com — July 2, 2014 @ 11:42 am | Reply


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