In the world of retail, customers often appreciate the intervention of a store manager when making purchasing decisions. This seemingly simple act can significantly influence sales outcomes, as revealed by a recent study.
This study, co-authored by experts in sales and pricing, examined over 5.5 million transactions at a Fortune 500 company and included six related experiments. The research, conducted by a team of scholars including Molly R. Burchett and Brian Murtha, sought to understand the impact of managerial involvement in sales.
The findings showed that sales teams with managerial support outperformed those without by 5% to 13%. This translated to an additional US$13 million in revenue annually for the company studied. The most notable increase occurred when managers provided support rather than taking charge, especially with new customers.
Why It Matters
Managerial involvement in sales is relatively common, with 12% to 20% of sales managers regularly assisting associates in closing sales. In fact, a survey of 85 business-to-consumer managers revealed that they spend 41% of their time actively selling alongside their teams. This practice is particularly prevalent in sectors like clothing and accessories and home improvement.
Managers face the challenge of balancing multiple responsibilities and must decide how to allocate their time effectively. Some believe managers should focus on management over sales, while others advocate for greater involvement in the sales process.
What Still Isn’t Known
The study’s insights are primarily applicable to business-to-consumer sales, with complexities in business-to-business sales remaining largely unexplored. In B2B sales, both buyers and sellers are generally more informed, and the information exchange is more comprehensive. The role of managers in these transactions might vary depending on the stage of the process.
What Other Research Is Being Done
Extensive research exists on sales managers’ leadership behaviors, coaching, and role-modeling. This body of work underscores the positive impact of managerial soft skills on sales performance, highlighting the importance of developing these attributes despite the effort required.
What’s Next
The study primarily focused on the immediate effects of manager involvement on sales transactions. Future research may explore when such involvement becomes counterproductive and examine the long-term consequences of managers playing an active role in sales. Initial findings suggest that while manager involvement can boost store performance, excessive participation might hinder overall sales due to neglected managerial duties.
Furthermore, new salespeople who experience a 10% increase in managerial support during their first month are 8% less likely to quit by the third month. Continued research aims to validate these preliminary insights.
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