Has technology made ‘Sales irrelevant’?
Now that we can directly access the producer/manufacturer of any product or service via the internet, do we still need ‘Sales’ as a function in a business? If we are a professional services firm, given that we have always gained clients because we are ‘professionals’, why should we pay attention to ‘sales’?
Sales as an Expense. With the relentless pressure to compete in the new ‘virtual’ economy, every business person is focused on reducing overheads in their organisation. Irrespective of whether the business is a sole operator or a multinational giant, expenses must be minimised whilst ensuring the business can grow. Eliminating “Sales” expenses from the “SG&A” (Sales, General and Administration) expenses is an enticing opportunity to make significant savings for the business.
Advances in technology enable interaction with prospective and existing customers by adopting Customer Relationship Management systems, social media and a plethora of feature rich ‘online’ methods. Prospective customers can to be identified using data mining and contacted by low cost staff or outsourced service providers. It appears logical to conclude that “Sales” is an expense that is either no longer required or soon won’t be.
Sales as a function, not a Department. Organisations that make the assumption that they can cut expenses by decreasing focus on Sales are setting themselves up for declining revenue and reduced profits. Worse, they face becoming irrelevant due to the sales focus of their competitors that invest in Sales by implementing an ongoing program of tailoring their sales efforts to their continually evolving market environment.
What does “Sales” really mean? The term ‘sales’ has different connotations for people due to their experiences in purchasing a wide range of items. These experiences include simple retail transactions, buying a vehicle, purchasing insurance, buying a house, making a capital purchase on behalf of a business, etc.
A person is involved in ‘sales’ if they sell something, meaning that they engage in a transaction with another party to exchange their offering (be it product, service or a combination of both) in exchange for something of value such as money, currency (including crypto-currencies) or some other valuable item. Buyers make their decision to purchase for their own reasons such as their fears, frustrations, wants, needs and desires. Depending on the item being purchased, there is a varying need for the buyer to understand how the item fulfils their requirements and for them to develop trust in the seller so that they are comfortable that the vendor’s offering is the one that offers the buyer the best value.
The act of selling requires an interaction with a prospective buyer to ascertain their requirements, inform them of how the item will satisfy those requirements, possibly to educate them on additional benefits that they will gain from the offering and finally to arrange the transaction which may be as simple as taking the cash or as complicated as negotiating complex agreements with other professionals involved. In more complex transactions, the seller must remain involved with the buyer following the initial purchase to oversee the adoption of the item and ensure that the purchaser is fully satisfied with the purchase.
Everyone Sells. At some level everyone is in sales. At a personal level we all engage in selling our ideas to loved ones and friends to ensure smooth, long lasting, symbiotic relationships. All relationships require “give and take” which is effectively selling. Those that are best at representing themselves whilst empathising with others enjoy a minimum of personal stress from their relationships.
Professional people, including medical doctors, lawyers, engineers and accountants, are constantly involved in selling their services to their clients. Given the wide range of professional service providers available, it is those professionals that take a sales approach toward gaining and retaining their clients that have the most profitable practices.
Politicians are constantly involved in selling themselves to the electorate. Once they are elected, they continue to sell their policies to ensure that they are effectively implemented which is expected to then lead to their re-election.
It is hard to identify any area of social endeavour where selling is not a part of the fabric of society. For those that want to read further on the matter, I recommend reading Malcolm Gladwell’s ‘Tipping Point’ (Gladwell, 2000). Gladwell investigates the ‘tipping point’ where a minor trend with a few people rapidly changes to being a widely adopted major change in society. In essence the tipping point can be attributed to individuals that are highly knowledgeable on the subject, well connected and great promoters. Gladwell cites the example of Paul Revere who in 1771 was able to mobilise resistance to the British in Boston because he was well connected, respected by the community as knowledgeable and highly adept at promoting his ideas. It is little known that another person rode in the opposite direction to Revere at the same time to alert the people in that opposite direction that “the British are coming”. The other person had little effect. He was not well known (connected), the people he alerted did not know if they should trust him (knowledgeable) and he was not proficient at promoting. As a consequence the people in the opposite direction to Revere ignored the person and did not mobilise to fight for the cause. Because of his connections, perceived knowledge and ability to promote, Paul Revere’s results are now enshrined in history.
Every business needs Sales – more than ever. The advances in technology mean that Sales is required more than ever, albeit in an evolved manner. Whilst technology has advanced, people’s basis for their purchases remains unchanged. People don’t buy what they need, they buy what they want. Even the highest level business transactions are based on the buyers’ emotions,. Yes, they have needs, however people purchase what they ‘feel’ is the best solution to those needs. It is dealing with those emotions that makes Sales a vital part of the marketing strategy of any organisation.
Thanks to the internet and disintermediation (removal of the ‘intermediaries’ in transactions) buyers need assistance from professionals they respect, who are able to effectively promote the items they need or desire and who are knowledgeable about the offering that they are offering. The buyers especially need assistance with how they will gain value from the purchase in their unique situation.
Marketing is the foundation of the survival of a business. (This will be the subject of a separate article). If there is no market for whatever is being offered, there will be no transactions and hence no profit for the owners of the business. The business will cease to exist because the owners will invest their resources in more profitable pursuits. There are four key components of marketing: product, place, price, promotion. Sales is a key aspect of Promotion.
Even in the most simple retail transactions, a business is able to differentiate itself by the quality of the Sales staff that assist the customers. Restaurants live or die based on the ability of the ‘front of house’ staff to satisfy the customers because those staff are effectively sales people. Anyone can take an order and deliver it to the table. A server that takes a sales approach to the clients will not only increase the dollars per seat but increase revenues and profit through return customers and referral business.
Dinner party conversations regularly turn to examples of poor service from professionals who may be excellent in their vocation but unable to effectively promote their service before and after it is delivered. The term ‘Bed Side Manner’ for doctors is a clear example of selling by the professional.
Sales as a Differentiator. The wise business person is always looking for methods to differentiate themselves from the competition. The unwise business person invests in extra features for their offerings whilst reducing spending on Sales. There is no point in having a superior offering when there is no one that can promote the benefits to the buyers. The market savvy business person invests in their product AND their sales effort to ensure that the buyers understand their business’ differentiation.
Regular sales training is key to ensuring that the sales effort is at the leading edge of the competitive landscape. Like innovation in technology, professional disciplines and production methods, innovation in the sales techniques and methods of the company must be constantly practiced. It is not a matter of a ‘one shot’ training course for the sales people, but an ongoing program of sales education for the sales people, especially sales management.
When all things are equal at an offering level, it is the high standard of Sales expertise that will differentiate a business and therefore gain that business the majority of revenue from the target market.
Who needs Sales People? So it is understood that Sales as a function is necessary for business success. The logical conclusion is to train the people in the organisation that deliver the offering to ‘sell’, thereby cutting the cost of having dedicated sales people. This approach is often adopted by professionals who take the approach “We are expert in our field so we are the best at selling our services”.
Selling is an art. The best sales people have personal attributes that underpin their ability to sell. This ability to sell can be identified by psychometric assessment. To identify if a person has the attributes to succeed as a sales person, the Sales Inventory Profile as developed by Maya Saric of SIP is highly recommended. [ www.salesinventoryprofile.com ] There are professionals that have the required sales attributes however it is unusual. Even if they have the necessary attributes, Professionals are subject matter experts that rarely want to be distracted with the nuances of selling. Training professionals in selling is an excellent way of increasing their ‘bedside manner’ however their role forces them to focus on their discipline, not selling as an art or vocation.
Who needs Sales? Returning to the original question, the answer is “Every business needs Sales!” If it is a single operator business, the operator must pay attention to selling and needs to ensure they are able to effectively promote themselves whilst always working to increase their connections (network). It is incumbent on sole operators to take sales training. As soon as the business gains momentum, Sales as a function must be added to the business, even if that is a large percentage of the time of a person with subject matter expertise that has the attributes and is continually trained to be a salesperson. In larger businesses, investment in having industry leading Sales capability at all times is a lead indicator of the success of the business.
Ignore Sales at your peril. Businesses that will survive and prosper from the onslaught of technology and intense competition will be those that regard Sales as a cornerstone of their business strategy. Those that see Sales as merely an expense are destined to be part of the ‘back of the pack’ or cease to exist.
© Philip Belcher
Please contact LSE Consulting to discuss how we can assist you with your industry leading sales capability and any other strategic business issues.
