One of the topics that I keep bringing up with clients is how much harder sales has gotten in the last few years and how it has changed over several decades. When you think about how we used to sell years ago, it was pretty straightforward. You would call, get an appointment, get in front of somebody, ask some seemingly insightful questions, then walk them through your solution and do a proposal, after which they would likely buy if you had personalized it enough.
Well, solution selling came along and said, “You’ve really got to dig into the problems and the challenges that people have and understand your buyers.” So there’s still a process for that and buyers would by and large give you the time to understand what’s going on in the world. Fast forward to the present day and not only have buyers become far more sophisticated, but the sheer volume and complexity of things that they’re asked to look at, understand and think about has spiraled completely out of control.
If I was running a company today and trying to field a sales organization, I can imagine how complicated that would be. Here’s where I come down on that. There are four things that have come together to make the perfect storm that challenges companies in 2014 to generate revenue.
Sales Organization Challenge #1: Power Shift
First and foremost, the power shift (or the knowledge shift) has moved from seller to buyer, which is just a simple function of the amount of available information largely due to the internet. Ten and twenty years ago, it was pretty basic. If you wanted information about a product or a service, you would pick up the phone and call the salesperson that would then come out and educate you on that product or service.
These days, by most accounts, buyers don’t want to be bothered by a salesperson until well into the decision making process. They want to self-educate. So salespeople and selling organizations are coming into the conversation much later than they used to, which obviously impacts rapport, credibility, trust and all those things that are critical to making a deal.
Sales Organization Challenge #2: Sales Cycle Bifurcation
Sales cycles have gotten longer, or rather, they’ve bifurcated into two distinct phases; one being a learning and education phase largely a result of the phenomenon I just mentioned, and the other being a real selling phase.
Sales organizations are fundamentally challenged by the fact that lots of times they may be brought in to “do their selling,” but that buyer is 12-18 months away from a real legitimate buying cycle. So how do you manage these two significant expenditures of energy? It’s really a challenge.
Sales Organization Challenge #3: The Move to the Cloud
The other key element that has really complicated things for selling organizations is the drive to SaaS and cloud-based, not just architectures of delivery but models for value realization. There’s a great book I’m reading right now called Consumption Economics: The New Rules of Tech, for which and Geoffrey Moore did the foreword. It’s a really wonderful book that I think explains in a lot of great, granular, technical detail the phenomenon I am referring to.
Stated simply, in the olden days when I started selling, you could invest significant time, energy, teams, go on site, get on planes, travel around to win a deal simply because at the end of the deal sat a pot of gold, whether that be a half a million dollar deal, a million dollar deal, multi-million deals not even within the Fortune 500 but in a much broader category of businesses, what have you.
Well, as the authors of this book explain, these days when the ink is dry on the contract, what you have essentially won is the empty pot and a chance to fill it up. You don’t get the gold outright anymore because it comes in the form of $29.95 per user per month on an annual contract if you’re lucky, but in a lot of cases it comes month to month.
The fundamental economics of fielding a sales organization and the value you realize after all this effort at the signing of a deal has not only gotten smaller as a whole, it’s gotten more difficult from an accounting standpoint because you can’t book a year’s worth of fifty $29.95 users; you only get to book a quarter’s worth. That has a material impact on how sales organizations can function financially, be staffed, etc.
Sales Organization Challenge #4: Lack of Sales Training & Education
Finally, the fourth piece that makes this perfect storm here is the fact that 20 years ago, people stopped training salespeople. Companies used to take this seriously. Where do good salespeople come from? The answer is well, they stick around long enough and they’ve made enough mistakes and they finally figure it out. But nobody, no company, no infrastructure is bringing new salespeople into the world anymore. The IBMs, the Xerox, the Burroughs, the NCRs, that used to make or train legions of new salespeople who then flowed into the secondary market, those companies are either gone or no longer do that anymore. Sales is truly the last bastion of the Wild West.
Nowadays everybody wants somebody with the magical three to five years of experience, demonstrated track record, blah, blah, blah. Well, where do you think these people are coming from? Can you imagine going out and trying to find and hire an accountant who didn’t go to accounting school or a marketing person who never studied marketing?
Some of you know I ran an organization that for a number of years basically hired people with no sales background, trained them, put them to work, gave them a process, et cetera. We served the market well because there were no companies out there that had really established comprehensive sales training programs. I say this all the time.
There are sadly a very small number of colleges and universities in the country that even have something resembling a sales program. One of my friends is a professor up at CU and asked me to teach a couple of modules on sales to graduate students, which has been a great privilege, but there’s not another single selling class in the entire program or curriculum. Think about that.
This is really a challenge if you’re trying to build a sales organization and staff it with professional talent or people that at least have a fighting chance of making it. Where do these people come from? Where do they even train? What are you going to do to train them when you’re concerned that they might leave in six months or fail?
In summary, the environment is challenging. It is harder than it ever has been to field that effective sales organization, and in a lot of ways, it’s not your fault. However, companies have got to develop new and innovative strategies to tackle the problem.
By Townsend Wardlaw