In 2019 I was introduced to EOS®, the Entrepreneurial Operating System® while working with a…
Traditional Outsourced Sales Management is most often delivered in one of two models, a complete department model or management only. In the complete department model, the outsourced sales management company will provide sales management and a sales team for a client. In this model, the outsourced sales management company hires and pays the salespeople directly with no human resources responsibility to their clients. Fees are based on the whole department being provided and managed.
The second model, management only, is where the outsourced sales manager will manage their client’s sales employee staff. The manager is not an employee of the client, but the salespeople are. Outsourced sales managers were historically dedicated to one client and paid as contractors but fully engaged with the company and culture. They worked at the client location to be closer to the team of mid to large-size companies. With the advancement of web conference technology, cloud-based CRMs, and file collaboration tools, outsourced sales managers could work with more clients virtually. This started many years before the Covid19 pandemic, but due to the pandemics’ remote working environment, virtual meetings boomed, and the market began to embrace the management-only virtual approach.
Family-run and SMBs Are Taking Advantage of Fractional Outsourced Sales Management
As more and more services have become accepted and financially prudent to be outsourced, the practice of outsourced sales management has evolved into what is now called fractional outsourced sales management or just fractional sales management, where fees and time are shared among several client sales teams by one outsourced sales manager. In addition, where outsourced sales management started in medium to large businesses where full-time sales management roles are budgeted, fractional sales management is now used by growing family-run businesses and SMBs that have had difficulty attracting and justifying quality talent. The industry is moving past the innovators who started hiring us at Sales Manager Now in 2006, and now moving into the early adopter stage.
The innovators realized that they did not have a challenging enough sales management role in attracting and hiring the needed talent. They had tried hiring a career salesperson who had never managed a team and failed. They tried hiring family or their top salesperson to manage the team, but that didn’t work. They needed a professional, but professionals were not interested in managing 3-5 reps, and if they did, they were given more duties in the business to justify their salary. Duties the manager did not care for and often would leave after a year or so. The fractional sales management model challenges the fractional manager by working with multiple clients and provides the expertise the company needs to grow.
The family-run and SMB companies using fractional sales managers have given their business a competitive advantage by bringing in the talent needed to grow at a cost much lower than anticipated.
What Fractional Outsourced Sales Management Provides Small Business Owners
Fractional sales managers provide small businesses with a dedicated sales leader trained and proven to manage and develop salespeople and teams. They know how to scale a sales department for growth. In addition, they relieve the business owners’ attention from this role and allow them to work on the business, solving issues, improving customer service, and finding more products or services to sell.
Michael Gerber, the author of the e-Myth, began preaching to entrepreneurs many years ago to work on their businesses rather than in them. It’s much easier said than done as you build a business, but if it’s not done, it’s hard to grow past the owner’s capacity of working in and on the business. More recently, Geno Wickman, author of Traction and discoverer of the Entrepreneurial Operating System (EOS), says there are three core functions in each business, operations, finance, and sales and marketing, and a leader should be accountable for each function.
In my 16-year experience working as a fractional sales manager, I’ve found a true leader for sales who is fully accountable for the results is often missing in most small businesses. I’m not saying someone is not in charge of the role, but they wear many hats (often the owner) and do not have the time to develop the high-performing sales team the company has been hoping for.
Benefits of Fractional Outsourced Sales Management
The key benefit to leveraging fractional outsourced sales management is positioning your company to grow with the right person in the sales leadership role. When you hire a fractional manager, you are not hiring a profit role, as fractionals usually do not sell. This will be a cost, and you expect the return to come back in more sales, team growth, time created for owners to do other duties and large savings on sales management compensation.
Sales Management Cost Savings
This chart will provide you with a good look at the cost comparison between a full-time sales manager and a fractional sales manager.
Scalability Through Salespeople and Locations
Franchises are known for scaling. How do they do it? They create processes, systems, a brand, and culture, and it’s documented for others to use and repeat. The best fractional outsourced sales managers will be doing this for you. They will make sure your sales department processes are defined, and the culture is such that it will attract new salespeople that fit right in and help you scale your business. Without clarity, expectations, and documentation, it can be harder than it needs to be to grow.
Team and Individual Growth
When the right people continue to improve and develop, they offer the company more. The sales department will sell more and sell more to the right customers. The team will grow also. A team culture will be developed, creating synergies that allow for larger or more efficient selling.
Sales Management Expertise
Expertise comes from experience. Experience working with the assertive and influential personalities of salespeople and experience working with clear expectations, monitoring expectations, and developing an accountable culture. Accountability is not difficult, but it does require management discipline to achieve. This discipline is learned through education and experience.
Maturity Added to Management Team
Most fractional managers are near or in retirement and can provide you and your leadership team with valuable perspectives in decision-making. They will treat your sales team like adults; in most cases, people rise to this treatment. We are not hired to be your consultant, but our smartest clients realize we might bring more than they expected if they would ask.
Why Not Hire a Full-Time Sales Manager?
Two factors make it difficult to attract a full-time professional sales manager. First, the talent market is limited as most professional sales managers work at large corporations. Secondly, managing a small-business sales team does not present enough challenges for the sales management talent needed. In most cases, the responsibilities don’t require a full-time manager, and this is overlooked.
A common belief is that a professional sales manager’s compensation is a hurdle to overcome, but we have not found that to be the case. Compensation buys things but does not replace the challenges missing in most small business sales leadership roles.
Outsourced sales management solves the management void and does it cost-effectively. Paying less buys you more in this case. Depending on your long-term goals, a fractional sales manager might be a bridge to a full-time sales manager or your long-term solution. We’ve had several clients keep us on board for over seven years. Here is a cost comparison between a full-time and fractional sales management approach.
What should you expect from your Outsourced Fractional Sales Manager?
I can’t speak for all fractional sales managers, but if someone claims to be a Sales Manager, they should take ownership and accountability for the sales goal assigned to the sales team. That is our approach at Sales Manager Now. Our reputation and value are based on the team’s results, just as they would be for a full-time sales manager. We work on a month-to-month basis, just like most employees do.
To provide you with a sample of what you might look for when shopping for a fractional outsourced sales management, our approach at Sales Manager Now includes the following job responsibilities:
- Attaining sales goals through the sales team
- Hiring new salespeople when needed
- Confronting poor performance
- Coaching up or letting people go
- Conducting weekly sales meetings
- Improve and document department processes
- Contribute to company strategic planning
- Conduct one-on-one coaching and monthly meetings
- Provide or coordinate necessary education and training for the sales team
- Develop salespeople and the sales team
- Collaborate with other department managers and ownership
- Be available for sales meeting prep and debrief calls
- Meet with owners as needed to stay in sync
You can find a full list of our services here.
Will a Fractional Outsourced Sales Manager Be a Fit at Your Company?
I’ll need to speak from our experience at Sales Manager Now to answer this question. We’ve had several clients who have kept us on board for over eight years, and other times we have helped for three months. We often stay engaged with a client based on how well our approach will fit a company’s culture and when synergy is found between the consultant and the business owner. We offload the owner from managing and leading the team, but we need support, availability, and involvement when decisions need to be made. If you think you might want to go down the road of hiring a fractional sales manager, the following list could help you decide if this approach would be a fit for you and your company culture. The checklist below is what our company has experienced for clients with tremendous success in leveraging fractional sales management.
- You want and are willing to change to grow the business. Growing sales is more than changing a sales team; it usually takes change from others, including owners.
- Owners with a more trusting leadership approach succeed more since a fractional sales manager is not in the office full-time.
- Your company has proven success with a sales team and process. Maybe your processes have not been the best, but they have brought the business to the current level of success. It confirms the market is there, and improvements should result in more sales. Startups are riskier if your proof of business plan has not been proven.
- A team of 2 or more salespeople so you can find some early gains and trust the process.
- Have or are willing to develop a current business plan to provide your fractional sales manager and the sales team with your clear vision and strategies. The plan fuels us to work toward your vision.
- Comfort with the fractional sales manager not being the product expert and committed to providing the sales team’s product or service knowledge to win business. Most fractional sales managers provide expertise in leading and managing salespeople, not product expertise.
- Attend some or a portion of sales meetings to support the overall process.
- Willing to provide the technology tools the sales team will need to be successful and support the process and systems.
- They want this to work and hope for a long-term working relationship.
How Do You Hire a Fractional Outsourced Sales Manager?
Once you’ve found a fractional sales manager, the hiring process is a blend of how you hire an employee and evaluate a service. When hiring an employee, you should determine if the candidate will fit your team and culture well and have the skills required to perform well. When evaluating a service, you should look at its proven process (how they approach Fractional Sales Management) because managing fractionally differs from managing full-time. The last factor is to discern if the manager is asking questions to evaluate a good fit for their service or convincing you that you’d be lost without them. An experienced Fractional Sales Manager understands their approach will not work at all businesses and is confident that it will with the right fit. Once you’ve made a selection, the manager should provide references.
Ideally, if you pursue outsourced sales management, you should be contracting with someone you hope will be a long-term solution or get you to the stage of needing a full-time sales manager.
If you’d like to interview us at Sales Manager Now, it’s as easy as choosing a time below.