Sales Management

The future of sales (V): The known unknows (borrowing the words of United States Secretary of Defense Donald Rumsfeld)

OLYMPUS DIGITAL CAMERAIn last blog post I provided fairly hard predictions of what successful sales models will look like in 10-20 years.  However, there are a number of known unknowns: phenomena of significant importance for which we, in my opinion, have limited basis for making hard and robust predictions:

  • The death of the salesman:  The natural implication of previous blog posts is that the old-fashioned sales manager, as epitomized by Willy in Arthur Miller’s well-known play, may become an extinct race.  It is easy to find examples of such sales approach gong out of fashion, think for example of traditional door-to-door dictionary sales (but this may also have to do with the dictionary industry).  There are two reasons why I may be wrong: i) The sales manager role has survived for hundreds of years, and I have facts against me.  ii) The typical sales manager fills a significant role in his or her company, besides in sales: he or she is typically the only high-bandwidth interface with the customer and an important  repository of customer feedback and understanding of customer needs.
  • The commoditization of everything, and the replacement of traditional sales processes with transactions in financial market places:  It is easy to find examples of such trend (see for example gas contracts, power contracts, maritime freight contracts, and weather contracts, as an alternative to insurance).  However, fact is that there need to be an underlying physical market, a close link between financial market and the underlying physical market, and enough liquidity in longer-term contracts to stimulate investment on the supply side.  In the gas markets as well as in the market for emission allowances, both early examples of markets with enthusiasm for market-based mechanisms, we have therefore seen a renewed interest in non-market-based mechanisms.
  • The further irrelevance of cold-calling (think of selling cell phone subscriptions, financial products, or retail power contracts from outbound call centers):  It may be argued that cold-calling is a dying discipline, based on an argument of more buyer-driven sales, of low value-added for buyer, of privacy invasion concerns, or of simply poor economics / low conversion rates.  Furthermore, one may argue that such an outbound call center is the voice-centric version of email spam, and that soon phone filtering technology and regulatory frameworks will make effective cold-calling impossible.  Again, I am still not sure, and hawking / spam / cold-calling have been a respected and effective part of selling for hundreds and possibly thousands of years.
  • The gradual transactionalization of sales, and the demise of relationship-based selling (at individual level, as well as at organizational and even political level):  There is an implicit assumption in the above analysis that in the future all sales people will be transaction-oriented machines that consume leads and prospects, and produce closed deals, on a transaction-by-transaction basis (and similarly with purchasing people).  Such assumption may be plausible in the Western world, but may be less plausible in say Russia, China, or Africa.  Example: The 30-year and USD 400b gas deal recently signed between China and Russia.  My predictions above have less relevance if such relationship-based approaches gain predominance.
  • The reconnect of the sales model with the distribution model:  In principle, and based in microeconomics, one would think that there should in general be good alignment between the sales model and the distribution model, and I believe that for hundreds of years this has generally been the case.  I suspect, based on primarily anecdotal evidence, that the gap between the two models has widened somewhat, but may shrink again.   Example: Amazon, and its detour into drones.

I would welcome feedback to the above list of known unknowns.  And, by this I conclude my series of blog posts about the future of sales.

Finally, all said and done, are we really any wiser after the conclusion of this series of blog posts?  On a personal note, I must admit having the same feeling of futility as I most probably would have had, had I been requested to write about the future of love, or death, or taxation.  These are broad phenomena with universal meaning and existence, though with significant temporal and cultural variability.  These are also phenomena that in many ways elude the use of analytical predictive frameworks.  Just like sales.

Discussion

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