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Preparing
Sales For The Future
 By
Adam J. Fein, Ph.D.
Distributors no longer have a lock on information needed by
customers to make purchasing and sourcing decisions, since manufacturers
and online sources will increasingly make such information more
readily available. As a result, the salesforce’s perceived value
in educating customers about new products and in-use applications
will be significantly eroded.
Distributors will be forced to respond as customers take a more
active role in the pre-sale and transaction portions of the
buying process. This article reviews the customer self-service
trend and explains the coming changes for the salesforce, and
suggests sales planning strategies for distributors.
Customers embrace self-service
The Internet changes the definition of self-service. Online
ordering is just one aspect of a far-reaching shift by customers
from “do it for me” to “do it yourself.” Your customers are
trying to do more in less time. |
Customers
gravitate toward self-service when they can perform activities
that bring added value or benefits, such as becoming better
informed about product options online regardless of their distributors’
line card. If customers perceive that distributors do not provide
enough service or information to justify a margin, they will
conclude that they can do a better job themselves.
Keep in mind that your customers are being trained in self-service
through their experiences as individual American consumers.
Consider just three examples:
More than 90% of gasoline purchases for personal autos are
made at self-serve stations.
There are 352,000 banking ATMs in the U.S.—four times the
number in 1993.
One-third of all supermarkets now offer self-scan checkout.
According to our new Facing the Forces of Change: The Road to
Opportunity study for the National Association of Wholesaler-Distributors,
customers will accept more responsibility for performing many
activities they previously expected distributors to handle.
Customers will increasingly want to:
Communicate with a sales rep via e-mail.
Gather online product information and specifications.
Obtain product prices and availability information online.
Access post-sales technical support information online.
Review their purchasing history online.
Salesforce transformation
The customer self-service trend will significantly erode the
value of the wholesale distribution salesforce in educating
customers about new products. Consider the following salesforce
implications of the self-service trend:
Technology has made customers more knowledgeable and comfortable
doing business quickly. More and more customers will expect
“real-time service” from the salespeople who assist them.
Customers will have access to increasingly comprehensive
online information for locating and comparing prices, costs
and sources of products. More than half of distributors expect
the Internet to be the most common way that customers find
new sources of supply.
Online technologies give customers lower cost and higher
service alternatives to a distributor’s salesforce. Customers
and purchasing managers will increasingly use the Internet
to bypass the salesforce and directly gather product specifications,
warranty and rebate information, material safety data sheets
and information on potential suppliers.
Growth in technology-enabled self-service will remove the
easy calls from a call center, requiring fewer inside sales
reps and requiring the remaining employees to be more problem
solvers than document readers.
Our research found many executives to be deeply uncertain about
the future of their salesforce. Nearly one-third were uncertain
if their own salesforce will remain relevant to customers as
a source of product information. The level of uncertainty has
doubled since our 2001 edition of Facing the Forces of Change.
In some cases, we found that customers are already limiting
calls from the outside distribution salesforce.
Evolve, not vanish
Although roles and value will change, there is little evidence
to suggest the complete elimination of wholesaler-distributors
as important contributors to selling channels.
The value of a distributor’s salesforce will revolve around
consultative roles that involve understanding and addressing
customers’ needs. There will be less need for order taking,
answering basic questions or providing readily available product
knowledge. Salespeople will need to provide more value than
merely understanding the peculiarities of the pricing structure.
Distributors of all sizes plan to introduce salesforce automation
technologies by 2008. At least half of mid-sized and large
wholesaler-distributors are already using customer relationship
management (CRM) software products.
Inside salespeople will have more account management responsibilities
as customers take a more active role in the buying process.
Examples of these responsibilities include soliciting orders
from new and existing customers, suggesting complimentary
products or services, solving problems, handling complaints
and becoming the primary point of contact between a wholesaler-distributor
and the customer.
Like your customers, salespeople will not use any technology
that is too complicated or does not provide real value. Think
about the salesforce as the “internal customer” who will adopt
a new technology only if it helps them do their job better.
If the technology does not help them sell better, then the system
is to blame, not the salesperson.
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Train your salesforce
Salespeople, accustomed to selling on price, will need training
to compete in the evolving world. Evaluate each of your salespeople
to determine if he or she needs training in qualifying customers,
uncovering problems, identifying solutions or bringing the company’s
resources together for problem solving. Be sure to include inside
salespeople when developing training plans to reflect growing
account management responsibilities. The new Facing the Forces
of Change: The Road to Opportunity study provides detailed
results by industry and company size to help benchmark your
own company’s plans against the plans of other distributors.
Here are five specific new traits salespeople will need to meet
the industry’s evolution.
1. Flexibility. Salespeople will need to willingly accept
change and work at building new behaviors into their routine
in response to the strategic direction of the company. This
can be a major cultural shift at distributors whose salespeople
view themselves as independent business people operating by
their own rules.
2. Technical expertise. Salespeople must be well trained
in a distributor’s IT systems and have real-time access to all
of the information the customer is going to demand. The salesforce
must be comfortable selling with new technology and be able
to teach customers how to gain information or place an order.
Sales representatives will need to encourage customers to access
the distributor’s website for product information and marketing
promotions.
3. Concentration on Service. The salesperson may need
to act more like an extension of the customer’s business rather
than an arm’s length vendor selling simple products on a price-and-availability
basis. As your service offering increases, your salesforce will
need to educate your customers on the best array of value-added
services.
4. Training. Salespeople will need to receive training
focused on improving selling and service skills. Our research
found that salespeople are expected to spend seven more days
per year in training. Product-oriented training does not help
the salesforce develop the new consultative skills needs for
success. Consider augmenting classroom training with online
refresher courses on specific sales tactics.
5. Focused Strategically. Not all current and prospective
customers justify or deserve the identical level of sales support.
Salespeople need solid data on the highest-opportunity prospects
to get the maximum return on their time. Identifying the top
5% of your current customer base, based on revenues or profits,
sounds simple. Technology may even make it easy to gather this
information. Yet accurately predicting which customers will
make up 10% of revenues or profits in three years—the ones you
want to focus on today—is far more challenging. And if the salesforce
will be spending less time with existing accounts, they will
need information to correctly target the best opportunities.
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What do customers want?
As customers change how they buy and run their business, your
sales compensation plan must keep pace. The current and future
customer behaviors discussed in Facing the Forces of Change:
The Road to Opportunity suggest a move away from deal-making
and toward greater emphasis on keeping the customer satisfied.
In response, compensation plans must focus on customer needs,
not on the features and benefits of products or services.
Distributors must adopt compensation plans based on a customer-focused
strategy, not history. If your compensation plan is based purely
on sales volume, the salesforce will focus almost exclusively
on finding the volume to support commissions. Salespeople will
be unlikely to invest time in longer-term goals like nurturing
a prospect with the hopes of someday converting him/her into
a customer.
Inside sales remain an untapped source of new revenue for most
distributors. All selling interactions with customers provide
upselling and cross-selling opportunities. New technologies
can provide inside sales or customer service reps with targeted
product recommendations and guided selling scripts.
An upsell/cross-sell campaign is doomed to failure if your call
center reps are still measured on call times. Call times go
up when attempting to cross-sell, requiring new metrics and
measurements to reflect new customer-focused revenue objectives.
By adopting these sales planning strategies, your company can
successfully counter the impact of customer self-service and
seek out the new paths to profitability.
This article is adapted from Facing the Forces of Change: The
Road to Opportunity, available at www.nawpubs.org.
*Previously appeared at Modern
Distribution Management |
| From
the Forum: |
| Web
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| I don't know if anyone
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|
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| © 2004 Pembroke Consulting, Inc. Adam
J. Fein, Ph.D. is the founder and president of Pembroke Consulting,
a firm that helps senior executives of wholesale distribution,
manufacturing and B2B technology companies build and sustain
market leadership. He can be reached at (215) 523-5700 or on
the web at www.PembrokeConsulting.com. |
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