Apr 11 2012
Unless you have been holed up in a remote cave somewhere in Outer Mongolia, with absolutely no access to the outside world for the past two years, you will be aware of the huge increase in internal sales positions.
Does this mean that the “sales space” is expanding? Has the economy made a miraculous recovery? Has commercial confidence finally been fully restored? I think you already know the answers to those questions – unless you really have adopted that “cave-dweller” life-style.
Regular visitors here will know that I have been discussing this phenomenon for more than three years, so what is taking place now is not a surprise – we have been anticipating it, and we are geared up for it: For example, my new consultancy which launches on May 1st, has a complete range of brand new programs dedicated to inside sales professionals -and we started designing those almost four years ago, after all success is nine-tenths preparation!
So, having posed the question, let me provide some answers – why is selling really going inside?
The most obvious reason is pure economics: After the recent financial meltdown, companies have been forced to examine the true cost of sales - something they do not usually have time to focus on when business is buoyant – and what they will have discovered may have startled them, because sales costs have been spiralling out of control for a number of years: Fuel costs, labor costs, the cost of raw materials, for example, have soared, and put simply, because of intense competition, the price of our products and solutions have remained largely unchanged.
The net effect of all of this has put thousands, if not millions of companies - globally, not just in North America or Europe - out of business.
You see, it is very easy to calculate gross margin/gross profit – which is what most compensations plans are still based on, amazingly - you simply deduct your buy-in cost from your sell-on price. However, your actual net profit is vastly different. Let me give you an example …
Let’s take a typical sale in a consultative/collaborative environment: After some pretty rigorous qualification at the front-end, we decide that we have uncovered an opportunity that is worth pursuing. We typically arrange an initial exploratory meeting, face-face, because face-face selling is still a dominant feature of selling at that level. If that meeting goes well, and the full traditional sales/buying cycle is followed, there may be another five, six, seven … meetings, not just involving the lead salesperson, but possibly his line manager; some technical resource on very “big-ticket” deals, even some finance input – team selling.
You do not need a degree in higher math to calculate the total cost of all this effort: I read somewhere the other day that it now costs $1500 to put one salesperson in front of one customer for one meeting. I actually think that this number is very conservative. But you get my point?
Whilst this level of investment may be justified for extremely high-value business, and may be possible to control, we are talking about less than 0.5% of all business transacted, and this means that for everything else, we should be considering our options.
The reality is that the traditional customer call once seemed indispensable to the selling process – the time and expense involved were just a basic cost of doing business. But today, the business community has to regard the sales call as an expenditure for which there are substitutes. For many companies telemarketing, video conferencing and direct email, have made the sales call a choice, not an inevitability – which takes us back to understanding why so many companies are moving their salesforces inside – I repeat, it is pure economics.
Advances in technology mean that we can now effectively conduct face-face meetings online – and you know what, we can manage five, six, seven meetings in one day, rather than the one or two we are managing at the moment.
I do not believe that we will ever see the day when face-face selling disappears completely – certainly it is not going to happen in my life-time. But equally, we cannot cling on to outdated and unprofitable practices. Change is the one constant that we can rely on in life, and that is certainly true for those of us who are populating the sales-space right now – but isn’t it exciting?
In case you missed my recent short interview with Dan McDade – during which we discuss all of the above in much greater detail – you can listen in HERE
News: In fact, you might also enjoy two further interviews – totally unrelated I might add – over at Top Sales World today, Art Sobczak and I discuss “Before You Make That Call – Prepare Intelligently” and over on Top Sales Management, Colleen Stanley asks you to consider “Training versus Coaching” Oh, and whilst you are over at TSM, you might want to read today’s article from Dave Kurlan, which caught my eye – “Are Women in Sales Less Trainable?”