Fractional sales management is a business strategy approach in which organizations hire top sales managers on a partial or contractual basis, rather than hiring the services of a full-time sales manager to manage their sales activities.
This is a situation where businesses, especially small to medium-sized enterprises (SMEs) and new businesses, can acquire high-quality sales skills without the financial cost of a full-time executive.
The modern business landscape and its dynamic nature, where agility and cost-efficiency have become the most important factors, has seen fractional sales management emerge as a model that can help an organization increase its sales potential based on its needs.
In this article we will discuss what fractional sales management is, its benefits, potential disadvantages, and how it can be incorporated into your business strategy. As a leader of a new organization or company that wants to increase sales levels without increasing the budget, knowing this model can help make better decisions.
What is Fractional Sales Management?
Fractional sales management is a salesperson who is contracted to oversee and streamline a business’s sales operations through part-time, contracted sales management or project-based transactions. Unlike a traditional full-time sales manager, a fractional sales manager works with multiple clients at the same time and typically spends a few hours or days with their clients. This will help companies gain the expertise of world-class professionals at a lower cost than hiring a permanent employee.
These executives are usually equipped with years of experience in sales management, strategic thinking, personnel supervision and process enhancement. They intervene to evaluate the company’s current sales performance, create specific strategies, train sales executives and establish systems to increase the company’s sales. The fractional type of sales management is particularly attractive to companies that do not have the funds or do not need a full-time executive to provide sales direction and strategy.
For example, a new company may need a fractional sales manager to develop a sales pipeline when no sales pipeline exists, while an established small and medium enterprise (SME) may hire a fractional sales manager to streamline its existing processes or access new markets. This model is flexible and can be suitable for a variety of businesses and industries.
Pros of Fractional Sales Management
There are numerous advantages of fractional sales management, which means that it is an appealing choice for scaling up the business. These are major benefits:
Cost-Effective Expertise
Hiring a full-time sales manager, especially one with extensive experience, can be expensive, with salaries often exceeding $100,000 annually, plus benefits and bonuses. Fractional sales management allows businesses to access the same level of expertise at a lower cost, as they only pay for the hours or services they need. This is particularly valuable for startups and small businesses with limited budgets.
Flexibility and Scalability
Fractional sales managers can customize the interest to suit the needs of your business, and this can be as little as a few hours a week, a short-term project or a longer-term engagement. You can scale up the amount of work that they undertake as your business expands or as your needs alter without the complexity of employing or dismissing a full-time worker.
Proximity to High Quality Talent
Fractional sale managers are highly experienced individuals who have succeeded in several sectors. They add a varied set of views, best practices, and tried and tested strategies that would be out of reach to businesses where the cost of a C-level executive is prohibitive. It can also speed up growth and enhance the level of sales because their experience can be put to great use.
Objective Perspective
One external fractional sales manager will help you to look at your sales operations impartially and with fresh eyes. A fractional manager can find the loopholes in the existing processes, propose new ideas, and rock the boat without being hindered by internal politics, as is the case with internal employees who may be inclined to the current system of work.
Quick Implementation
Fractional sales managers are used to getting going. They can come in and review your sales processes and make changes swiftly and get results without the protracted on boarding time needed to bring on a full-time hire. This is perfect in case of business taking an instant effect.
Cons of Fractional Sales Management
Fractional sales management is not without its problems even though it has several benefits attached to it. Following are some of the possible disadvantages:
Limited Availability
Fractional Sales managers do not have their full concentration on one client since they deal with several clients. This may result in time conflicts or postponements of tackling urgent matters, especially when they are busy. This model is not as effective as monitoring in the case of businesses that command regular attention.
Lack of Full Integration
A part-timer sales manager would not be so much aware of the culture of your company and would not establish strong ties with your staff. This may restrict them in terms of establishing long-term team integration or grasping the peculiarities of your company as compared to a full-time employee.
Potential for Misalignment
Fractional sales managers deal with a variety of clients hence there is the risk of unfocussed strategies on the part of the fractional sales manager regarding the objectives of the company in the long run. Communication and expectations are most crucial to guarantee that they are working according to your vision.
Higher Hourly Rates
Although fractional sales management is a cheaper alternative to a full-time salary, the rates of experienced professionals are often high per hour or per project. Companies which have very limited budgets might not even afford to justify the cost, particularly where there is a long-term commitment.
Dependency Risk
A business that has become dependent on the fractional sales manager may have difficulty if the contract dries up unless they build internal sales functions. To overcome this, the engaging firms ought to consider knowledge transfer and advance their own team.
When Should You Consider Fractional Sales Management?
Fractional sales management is ideal for businesses in specific scenarios, such as:
- Startups needing to build a sales function from the ground up without the budget for a full-time executive.
- SMEs looking to scale sales operations or enter new markets but lacking internal expertise.
- Companies in transition, such as those undergoing restructuring, launching new products, or recovering from a sales slump.
- Businesses with seasonal or project-based needs that don’t justify a full-time hire.
If your business requires strategic sales leadership but isn’t ready for the financial or operational commitment of a full-time sales manager, fractional sales management could be the perfect solution.
How to Choose the Right Fractional Sales Manager
To maximize the benefits of fractional sales management, it’s crucial to select the right professional. Here are some tips:
- Look for Relevant Experience: Choose a manager with a proven track record in your industry or with similar business models.
- Define Clear Objectives: Outline your goals and expectations upfront to ensure alignment.
- Check References: Speak with past clients to gauge the manager’s effectiveness and working style.
- Prioritize Communication: Ensure the manager is responsive and able to integrate with your team, even part-time.
- Focus on Knowledge Transfer: Select someone who can empower your team by sharing expertise and building internal capabilities.
Conclusion
Fractional sales management offers an accessible and cost-effective way to get high-quality sales management without the cost of full-time employees. It’s a great option when a business needs to expand, streamline its sales activities or make changes without spending too much. Still, it’s not a universal solution, and companies should consider the benefits of using it, such as cost savings and specialization, as well as potential disadvantages such as scarcity and integration difficulties.
Businesses can also take advantage of the immense potential by finding the right fractional sales manager and maintaining high expectations. In case of adopting this strategy, it’s worth considering the requirements, vetting the candidates and seeing if the appointment is a good fit for your long-term plans.
FAQs About Fractional Sales Management
What is the difference between a fractional sales manager and a sales consultant?
A fractional sales manager is a full-time employee who is actively involved in your sales and work closely with your team to execute sales initiatives and deliver sales productivity. A sales consultant is one that usually offers advice, analysis or makes recommendations without any involvement in operations.
How long should a fractional sales management engagement last?
This will be done depending on the requirements of your business. Engagements usually range between 3 to 6 months in cases of particular project work, such as initiating new sales plan and 6 to 12 months or above when an establishment requires constant assistance.
Can a fractional sales manager work remotely?
Indeed, several fractional sales managers can operate at any location so long as they use technological tools such as CRM, video calls, and collaboration platforms to coordinate the sales process. But not every interaction needs to be faced to face, and this can help team building or projects with more complex needs.
How much does fractional sales management cost?
Prices depend on the experience of a manager, on the amount of work, and on the terms of engagement. An hourly rate is usually in the range of 100-300 dollars whereas a fee on a project can be between a few thousand dollars to tens of thousands of dollars.
Is fractional sales management suitable for large companies?
Even though fractional sales management has gained most popularity among startups and SMEs, the large companies can apply it to selected branches, temporary undertakings or intervene during a leadership vacuum.
