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Black Cats, Broken Mirrors, and Bad Sales Managers – Debunking Common Myths this Friday the 13th

6 min read

Queue the eerie music, its Friday the 13th. For superstitious folks. The list of myths that come along with Friday the 13th are far reaching. Everything from bad luck when a black cat appears to the consequences of flying or cutting your hair has been widely debated. And if you had any plans of going anywhere near a cabin in the woods you might want to think twice (although it certainly keeps Jason in business). All this ruminating on Friday the 13th misnomers got us thinking about common myths in our own industry. And one of the biggest areas we see this is around what makes a good sales manager.  Let’s start by saying that good sales managers are essential in any organization. Yet, when it comes to hiring and maximizing their productivity  there are a lot of common misconceptions in the market. The bright spot is that data in now available to help make more balanced decisions beyond just the “gut feeling.” Leveraging an anonymous big data sales analysis of the compensation practices of more than 750 companies we found that data prevailed in debunking common myths in hiring, and retaining, great sales managers, including: Myth 1: Top Sales Reps Make the Best Sales Managers You’ve likely seen this story a million times: Sales rep is a top performer and gets promoted to manager. In fact, in analyzing big data across hundred of companies, we found that total sales is the strongest predictor that a salesperson will be promoted to manager. But are they really the best for the job? Does the myth stand up to the reality?  While top salespeople were much more likely to be promoted, the best sales managers were those who were not only good salespeople, but also salespeople who were more active than their peers in cross-selling and team-selling. While it might seem like common sense to simply promote your best sales rep to manager, it is an often-made mistake. The characteristics that make a superb salesperson often don’t translate into managerial skills. Myth 2: Managers Chuck Bad Reps How do your sales managers deal with poorly performing reps? After a considerable amount of time and training, if they still aren’t improving, the myth is that you show them the door, right? That’s only partially true. Perhaps a better way to introduce the practical implications: “Are your managers’ incentives aligned with managerial goals?” We find that quotas, when designed improperly, give managers an incentive to pull in and push out sales by shifting when they change their subordinates staffing and incentives. These managers will hang on to reps with disappointing numbers because they're crossing their fingers that their reps might come through with a Hail Mary and raise their numbers just in time. Managers that are hitting quota have no qualms about cutting the weakest link (their turnover rate is 22.2 percent). Those managers missing quota completely have a turnover rate of 18.6 percent, likely because they know they’re so far from their goals that keeping around a poorly performing rep will never help them make their numbers. The above-mentioned managers that are keeping around poorly performing reps for their own gains could be costing you. They aren’t making the best choices for your company, and are possibly in need of quota relief to dissuade them from keeping these disappointing reps around too long. Myth 3: I Can’t Predict What Reps Will Fall Short as Managers Can you predict who will be a great manager and who will fall short? The data shows you can tell exactly that. Microeconomics and sales data has uncovered the causal link between salesperson characteristics and their managerial performance. It’s like you can see an employee’s future just by looking at a few attributes. So there you have it. Data and conventional wisdom has shown many of the common Friday the 13th myths to be untrue, just as it has shown the light on common sales manager myths. But just in case, you would still be wise to avoid walking under open ladders and always throwing spilt salt over your left shoulder.