UT Haslam Researcher Finds Including Managers in Sales Transactions Increases Profits, Reduces Employee Turnover

Store managers who help with sales don’t just close more deals; they also improve the customer experience and keep more salespeople from leaving their jobs. That is the conclusion of new research from Daniel Chavez, assistant professor in the Department of Marketing at the University of Tennessee, Knoxville, Haslam College of Business.

Chavez and his co-researchers worked with a Fortune 1000 automotive services company to understand at what point a manager joining a sales transaction makes the biggest impact. The findings, soon to be published in the Journal of Marketing, explain that manager involvement in sales teams works best for new customer transactions.¹

Real-World Research

Imagine shopping for a dishwasher or a sofa and being helped by a team rather than one salesperson. One team member might ask questions about your needs while another retrieves products or provides technical information. Sometimes, one member of that team is the store manager. But what, exactly, should the manager’s role be in these situations?

“Previous research didn’t provide clear answers,” says Chavez. “Managers are more experienced, but they’re also more expensive and have many responsibilities beyond selling.”

This scenario led Chavez and his coauthors to ask four questions in their research:

Should managers participate in sales?
When should they join a sales interaction?
How should they participate?
Why does their presence make a difference?

To answer these questions, the researchers evaluated data from the automotive services company, including more than seven million invoices, one year of transaction data, information on which employees interacted with each customer and employee demographics, seniority and team composition.

Increased Customer Orientation = Increased Revenue

Chavez and his colleagues found that, overall, sales teams that included a manager generated 5-to-8 percent higher sales than teams without one. That may seem like a modest increase, but for an automotive services company processing roughly seven million transactions per year, that increase translates to approximately $21 million in additional revenue annually.

To optimize their inclusion, managers should not participate in every sale, however. The research found the biggest gains occur when managers join transactions with new customers, defined as someone who has never visited the company or who has not visited in more than 180 days.

“Returning customers already know what to expect, but new customers are still forming opinions about the company,” Chavez explains. “Seeing a manager involved makes them feel valued and signals that the business cares about their experience.”

To understand the positive effect of manager involvement in team sales, the researchers conducted interviews, revealing that customers consistently felt sales teams including a manager were more attentive, more customer-focused and more interested in meeting their needs.

“In marketing, we describe this as increased customer orientation,” explains Chavez. “Simply knowing that a manager was involved made customers feel the company cared more about them.”

The Sweet Spot

In addition to showing that managers’ greatest impact occurred in transactions with new customers, the research identified other caveats. Managers shouldn’t join every sale, as the data showed peak performance when managers participated in about 30 percent, roughly one out of every three, of transactions.

If they join transactions more often, managers spend too much time selling instead of managing. If they participate below that level, companies miss opportunities to increase sales. It’s also important that managers support, not lead, when they join sales.

“When the manager takes the lead, the positive effect disappears,” Chavez says. “When the salesperson leads and the manager supports, sales improve the most.”

Additional Benefits

The research from Chavez and his co-authors also uncovered another major benefit. New sales employees who worked alongside managers during their first three months were significantly more likely to stay with the company.

Specifically, a 10 percent increase in manager involvement during a new employee’s first month reduced the likelihood that employee would quit by 8 percent. For the automotive services company Chavez’s research focused on, that translates to approximately $2.7 million savings annually in hiring, training and replacement costs.

Alex Zablah, head of Haslam’s marketing department and the Gerber/Taylor Distinguished Professor, says the study stands out for providing managers with clear, evidence-based guidance on when and how to participate in sales interactions, offering insights that can directly improve firms’ bottom lines.

“Sales managers have long been left to guess how involved they should be in selling, and in the absence of credible evidence, practice has varied widely from one firm to the next,” says Zablah. “What sets this work apart is that it puts a price tag on how often managers should join a sale, which customers they should join and what role they should play once they do. That is advice a manager can act on, and Daniel’s team can tell you what it’s worth to the bottom line. This research not only meets the highest standards for rigor but also answers a question managers ask again and again, and that is precisely why it is appearing in the discipline’s top journal.”

A Chance for Collaboration

Chavez hopes this research helps companies use their managers more strategically.

“Many sales managers were promoted because they were excellent salespeople, so they naturally enjoy selling, but managers also have other responsibilities,” he explains.

The company he collaborated with has already started applying the research, with managers now prioritizing interactions with new customers: New customers are clearly identified in the workflow, making it easy for managers to know when to step in, and the company also recognizes managers for the value they add to sales.

Beyond the findings themselves, however, Chavez hopes this research encourages more companies to collaborate with universities.

“Practical research like this can solve real business problems while creating meaningful academic insights,” he says. “That’s the kind of work I’m most passionate about.”

¹“Whether, When, How and Why Sales Managers Should Be Involved in Sales Teams,” by Daniel Chavez, Molly Burchett and Brian Murtha, will appear in the Journal of Marketing.

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Leah McAmis

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Haslam College of Business - UT Haslam Researcher Finds Including Managers in Sales Transactions Increases Profits, Reduces Employee Turnover