Workers in sales might roll their eyes when they deal with a micromanaging boss. But many customers actually appreciate it if a store manager offers to help when they’re mulling over a purchase, whether it’s a dishwasher, a tablet or a lawnmower.
That’s the main finding of a new study I co-authored.
As a scholar of sales and pricing, I delved into this question, along with fellow researchers Molly R. Burchett and Brian Murtha, by analyzing data from a massive field study involving more than 5.5 million real-world exchanges at a Fortune 500 company, in addition to six related experiments.
We found that this kind of intervention does pay off – to a certain extent. Sales teams that included a manager outperformed teams without one by 5% to 13%, which meant an extra US$13 million in yearly revenue at the company in question. The biggest lift came when a manager joined a sales teams dealing with new customers – and assumed a supportive role rather than taking a lead.
We were somewhat surprised by the lift from managers taking a back-seat role, so we ran some additional experiments. We found that customers view this kind of secondary support positively in that it boosted the status of the salesperson and team. This perception, in turn, increased their openness to buy, and ultimately increased sales.
Why it matters
It’s fairly common for managers to step in this way. Between 12% and 20% of all sales managers will help an associate close a sale, according to prior research. In our survey of 85 business-to-consumer managers, they reported a somewhat higher share, noting that they spend 41% of their time with their salespeople selling.
Sectors where this is especially common include clothing and accessories as well as home improvement.
More generally, managers have to juggle different demands at once. And to be effective, they have to know how to best allocate time across managerial tasks and interaction with customers. Some believe that a sales manager’s main job is to manage, not sell; others believe managers should be deeply involved in the sales process.
Given these disparate approaches, we wanted to conduct research that might provide a decision framework to help managers allocate their time more effectively.
What still isn’t known
This research is only an initial foray into understanding managers and sales. For example, our findings don’t offer guidance on business-to-business sales, which are more complex. In those cases, buyers and sellers are much more informed about the goods or services in question, and much more information is transferred.
It’s possible that the impact of manager involvement in these settings may depend on the stage of the process. It’s also possible that managers should sometimes take the front seat rather than the back seat at different stages of business-to-business sales.
What other research is being done
There’s a sizable body of research on sales managers that tends to focus on their leadership behaviors, coaching and role-modeling. This stream of literature, broadly speaking, suggests that managers have a big impact on sales performance, and that these soft skills are worth developing – even though they take time and effort to cultivate.
Up to this point, however, research on sales managers’ selling role remains limited.
What’s next
Our research focused on immediate, transaction-level outcomes of manager involvement in sales teams. Future work could seek to understand other results, like finding out exactly when this type of interference from above becomes counterproductive, or what the long-term effects of managers taking more of a hands-on role with sales might be.
We already have some initial hints on store-level performance and salesperson turnover. Manager involvement in individual sales improves store sales to a certain point, by around one of every three transactions. Beyond that range, store sales suffer, maybe because managers can’t perform their other duties.
As for turnover, we find that new salespeople who experience 10% more manager involvement in their first month are 8% less likely to quit by the third month than their counterparts.
We plan to continue this research to see which of these initial insights hold.
The Research Brief is a short take on interesting academic work.