Sales Management: Stuffed With Possibility

29 December 2010

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Before The Sales Management Association launched, taxidermists had more options than sales managers in selecting a professional association. This despite the fact that companies stuff an astonishing amount of expense into the corporate cavity called the sales organization.  Realizing value from these investments hinges on the front-line sales manager, who most directly influences the sales organization’s success.

Sales management is poorly understood, haphazardly served by business schools, and woefully under-trained by most firms. Given the magnitude of sales investments, sales management’s potential to influence sales effectiveness, and the generally lousy state of professional resources available to sales management, we think there is a conspicuous void to fill in management development for the sales force. Here’s why.

Big Bets

American firms make enormous bets on their sales organizations. How big? About US$800 billion in annual sales force expense, twice what is spent on advertising. US firms deploy five million full-time salespeople (four times that number if you include B2C and retail sales jobs). It may be a reach – if you consider all 20 million salespeople "white collar" – but as many as one in four US white-collar workers is a salesperson. Who’s managing them? About 350,000 front-line sales managers, their senior leadership, and assorted colleagues in sales operations and sales support functions. 

Big Upside

These managers and the workforces they direct represent both great corporate expense and great upside for the firms that invest in them. To wit: a recent academic “meta-study,” or study of studies, measures sales investments’ elasticity, the percentage change in output based on a ratio-scaled measure of input. The study pegs sales force investments’ elasticity at .32 or more, compared to advertising elasticities of .1 to .2. (University of Kansas Marketing Professor Murali Mantrala, one of the study’s authors, spoke about the findings at this year’s excellent KU Sales Productivity Conference.)

The authors point out that return on sales investments vary widely, however, because of differences in market settings, product life cycle, and many other factors; which means that…

…sales managers have to become more adept in finding ways to maintain and enhance sales force productivity. One obvious option is to redeploy their sales force efforts to more elastic settings – where personal selling makes a difference. …[I]mproved allocations of selling efforts across product portfolios and geographic areas can often deliver higher profits at lower than current investment levels.

Which firms will find success “redeploying sales force efforts into more elastic settings?” Those most invested in management development and professional standards for sales leadership.

A Place to Start

Eighteen months ago we opened for business at The Sales Management Association with a modest aim: create an objective, credible, and comprehensive resource for sales and sales operations leaders interested in improving their craft. We’re proud of the modest progress we’ve made in growing the Sales Management Association, and launching this blog is an important step in extending our reach to the professional community we serve. We hope you’ll feel the same, and become a regular at our new blog.

About the Author
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Bob Kelly

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