Sales Management

The future of sales (I), and the (premature?) announcement of the death of the salesman

OLYMPUS DIGITAL CAMERAClose to two years ago, I read an interesting HBR article about sales, “The End of Solution Sales”, by Brent Adamson, Matthew Dixon, and Nicholas Toman, all in Corporate Executive Board, a member-based US advisory firm. The article claimed that successful sales people succeed because they seek out prospects in agile organizations in state of flux, and that insight-based sales will replace solution sales as dominating sales paradigm. I have always been looking for the next big thing in sales, but concluded that the article, while an interesting piece of thinking, was i) inconsistent with facts (and anecdotal evidence); and ii) too much Emperor’s new cloth (isn’t insight-based selling what we used to call thought leadership / strategy in times of flux?).

Then, some months ago, I met with the Managing Director, let us call him “Steve”, of a medium-sized marketing agency in Norway (and a long-time business acquaintance of mine). Steve has successfully steered his company towards a leading position in digital marketing services for SMEs in Norway, during some tough years and in a highly competitive business environment. His thesis was that proactive, vendor-driven sales will over time become less and less a viable model, at least in his industry, and that in the future the dominating paradigm will be marketing through primarily electronic channels (e.g., social media, WoM, search engines, web sites) plus reactive sales. I have given our conversation serious thought on a number of occasions, but cannot in general agree with his announcement of the death of the salesman.

I have also for some years been the CEO of a minor software firm (with the ambition of being #1 globally), and have observed the gross mismatch between the sales costs associated with a typical sales process for an SME, and the revenue potential in even a reasonably successful deal. I have also observed the same mismatch in other companies and industries: The prices and margins of the offerings go down, while sales costs go up (typically 20-25% of sales, when all costs are taken into account, including some free consulting), and most companies implement a mix of solution sales, insight-based sales, and marketing-driven reactive sales through electronic channels whilst having limited insight into the effectiveness of each of the various approaches.

As a practicing member of the sales community, and as general manager of a boutique advisory firm with offerings in the area of strategy, sales and business development for technology SMEs, I have concluded that it is time that we start to take a stark look at the future of sales and sales organizations. There are some fundamental issues that every serious CEO or EVP Sales should (if she intends to reach her sales objectives) hammer out a perspective on, including but not limited to:

  • What are really the dominating sales paradigms today, and what will drive changes to these sales paradigms?
  • What will be the dominating sales paradigms in the future?
  • What will happen buy-side, and how will that impact us at the sell-side?
  • What will happen with the sales rep and the sales executive?
  • Will future of sales be about more proactivity, more insight and thought leadership, and more costs, or about becoming 100% transactional and making redundant the whole sales force?
  • How to monetize insight, pre-contract (give it away for free, like in insight-based selling, or refuse to offer it pre-contract, like Steve is suggesting)?
  • To what extent are the answers to the above company-specific or industry-specific?

I have decided that I will present my research in a number of slightly long-winded blog posts over the following days and weeks. My research agenda will be driven by the issue list above, but adjusted as new insights emerge. Methodologically, I will base the research on fairly anecdotal evidence, though with hard numbers when available (in consistency with general practices in the management science research community, but with less formality). I will primarily leverage evidence from Europe, Asia, and the Americas, and to a lesser extent from Africa and developing countries. However, conclusions are believed to generalize also to other countries.

There will be no particularly order of these blog posts, though I will prefix them with ‘The future of sales’. Feel free to read them in any order. I would welcome comments.

Discussion

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