by Rowan Gibson
The global, information-based economy is relentlessly reshaping the whole concept of sales. Without doubt, the traditional notion of ‘sales’ is undergoing radical and profound change as we enter the first years of the twenty-first century. Sales organisations everywhere - and the sales people within them - are being forced to recreate themselves for a new digital economy in which power has shifted from the seller to the buyer. The role of the salesperson, and of the sales force itself, is in a state of transformation as companies race to build customer relationships using today’s e-based business models.
Gone are the days when the sale department was a ‘closed shop’ in the organisation, with no transparency and very little interaction with other departments in the company. The days when all a sales person - or ‘representative’ - had to do was make a certain number of customer contacts in a certain region in a certain amount of time. Back then, it was all about ‘sales by objectives’ and, of course, the chief objective for the sales person was closing the deal using any means available (preferably legal!). And closing as many deals as possible. The fact was, though, that nobody really knew how the sales targets had been met or missed. It was usually put down to the work of a few individuals out in the field.
That was then, this is now. In the global, information-based economy, powerful forces are sweeping the old ideas away as irresistibly as a tsunami. What are these forces? Basically there are two major driving forces for change - or megatrends - which are transforming the nature of sales.
The first is the globalisation of business and markets, which is making sales processes much more complex and dynamic. Not only are companies faced with intense local competition from formerly ‘foreign’ rivals, but they are also struggling to gain access to critical channels of distribution around the globe so that they can quickly drive their products to market in as many countries as possible. With new product development costs escalating, it is the only way to gain an appropriate return on investment. In fact, the issue has become, not just time to market, but time to global pre-emption. As Ed Artzt, former chairman of P&G put it, “If we don’t do it early on globally, someone else will.”
The second major driving force is the rapid advance of information and communication technology, which is revolutionising every sector of business and every aspect of sales. The Net-based economy gives customers almost unlimited choice, freedom and control. Clearly, we are moving from an economy based on selling to an economy based on the power of the buyer. This fundamentally alters all our traditional notions about the value chain, the supply chain or the customer chain, which is now linked by a flow of exchanges capable of adding value at every step of the way.
Today, in the global economy and with improving technology, most industries are in an oversupply, overcapacity situation. So customers no longer have to accept whatever companies offer them “because it’s the only option they’ve got.” The customer now has many options. Many choices. There are many companies competing for the same order. So many in fact, that markets continue to consolidate through mergers and acquisitions, which inevitably forces two (or more) formerly separate sales organisations to become one. This, in itself, is a formidable challenge.
With so many companies competing for the same customer’s money, it obviously becomes a buyer’s market. So success today lies with those who can do things in the way that the customer wants. New market transparency, for example, thanks to developments like e-commerce (and in Europe, the advent of the Euro) is creating a bidding war out of purchase prices. Consultant Gary Hamel says, “Make no mistake, the Web will drive the last nail into the coffin of set prices.” And instead of protecting traditional channels, it is imperative that companies explore new e-based options that provide their customers with the ultimate mix of convenience, speed, price and service.
This new customer primacy, along with intense competition and the constant technological change going on around us, makes a mockery of the conventional sales organisation. Which is why Michael Graff, President of Business Aircraft at Bombardier Aerospace argues that “Sales forces of tomorrow will need to be fundamentally different from today.” What companies clearly need is a very different approach to sales. One with a lot more flexibility and responsiveness to customer demands. One that can efficiently manage the more complex structure of twenty-first century sales processes. And one that takes full advantage of the power that new technology offers.
Our efforts should be focused on enlarging and upgrading the function of sales in order to support clients in meeting the challenges of a new sales era. This means using sales a tool for implementing today’s cutting-edge competitive strategies, involving the company’s top management. And it means training sales people to take on a new role as strategic business partners, project managers, value-added consultants, negotiators, info-brokers and relationship managers. No longer as ‘lone eagles’, but instead as members of flexible selling teams and network organisations that usually work on an international or even global level.
Companies have been talking about getting ‘close to the customer’ since the early eighties. Now, with the advent of the new economy, becoming a customer-focused enterprise is a prerequisite for survival. Business success today is focused on customer interaction and customer relationships - often using the latest information technology - which requires a whole new approach to managing sales processes. What is needed around the world is a new methodology for sales. One that improves a company’s market strategies and sales processes, as well as both organisational and individual sales competencies, in order to create value for the customer. In the future, this will be the only sure way to turn sales strategies into successful market results.
13 Trends That Are Reinventing Sales
Rowan Gibson is founder and chairman , a company which helps organisations to rethink core strategies, and author of the international bestseller Rethinking the Future.
Copyright Rowan Gibson. All Rights Reserved.
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