The death of a sales force - Selling...
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1 The death of a sales force …and the six forces of destruction
Transcript of The death of a sales force - Selling...
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The death of a sales force …and the six forces of destruction
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Contents
About the author
Anderson Hirst is a director of Selling Interactions. Starting
out as a technical sales representative in 1991, he has been
involved in business development ever since, primarily as a
sales development consultant and trainer. He is a voracious
researcher of sales best practice and is an avid futurologist. His
work involves helping organisation install high quality sales
routines across borders.
1. The death of a sales force
2. The six forces of destruction
3. The Sales Organisation Vulnerability Index (SOVI)
4. The Strategic Scenario Programme
5. References
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Want to assess your sales organisation right away?
Are you interested to find out how vulnerable your sales organisation is to
disruption or extinction?
Request your invite today and get the results back within the week, compliments of us
Sales Organisation Vulnerability
Index (SOVI) Please email
to receive your complimentary personal
hyperlink to assess your organisation with the
SOVI.
You will receive your report within one week
Data protection: We will NOT share your input
with any 3rd parties.
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The death of a sales force?
When Arthur Miller wrote his much vaunted work “Death of a
Salesman”, it was more to do with one man’s demise (Willy
Loman) in a changing world. We feel it is time to provocatively
question the role of the whole sales force in our rapidly changing
business climate. After all, a sales organisation is a very expensive
resource and the chill economic winds take no prisoners.
It may seem strange coming from a consultancy specialising in sales
excellence and sales organisation improvement, however, in the spirit of
“Destroyyourbusiness.com” made famous by Jack Walsh, it’s always
better to challenge our own practices before someone else does.
In this context, we do not want to focus on business strategy per se: We
want to ask the fundamental question – does your organisation really need
a sales force?
We invite you to join us for a ride through uncharted waters with the
promise of a pragmatic outcome for you: A clear process to not only
assess your own sales organisation, but also emerge from the other side,
stronger, fitter and ready for a brave new world. By completing our
Sales Organisation Vulnerability Index (SOVI – see page 17) you
will be able to take the first steps today.
“Does your
organisation
really need a
sales force?”
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6 forces of destruction
We see six forces currently acting on sales organisations to varying degrees, that can
potentially cause large-scale disruption. Artefacts such as the slide rule, the cassette
and flares remind us that today’s killer product is tomorrow’s unwanted cast-off.
We will review these six forces in turn and then offer you a route to assess the real threat
to your own sales organisation. Of course every threat also represents an opportunity, and the
smart sales leaders will explore the future and begin putting changes in place ready for any such
“watershed” moments.
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Overview – the six forces of destruction
Replacement by technology
risk
Legislation risk
Inflexibility risk
Competition risk
Client transformation
risk
Economics risk
The sales
organisation
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The replacement by technology risk
In their 2013 report “From exponential technology to exponential innovation” (1) Deloitte show how the automotive industry might transform itself. From single driven car ownership to driverless cars with ride share networks, the scale of change is staggering. No human driver required! It is this highly unpredictable effect of technology on markets that makes sales forces so susceptible to disruption. With rapid advances in the triple core of process power, bandwidth and storage capacity, there is a kind of amplifier effect. Unless the sales organisation provides a better buy-sell interface than technology can offer it is vulnerable to obsolescence in exactly the same way that manual labour was replaced by robots in car production in the nineties. What could be the next innovation that makes buying and selling your product or service completely unrecognisable? The i-Pad has become a de-facto standard for the healthcare sector: Where will it go from here?
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Automation of (parts of) the sales process
The “Turing Test” is famous among computer scientists. In fact, every year,
scientists compete for the “Loebner prize” $100,000 to try to pass it.
Essentially, a human sitting at a PC terminal has an “instant message”
conversation with either an artificial intelligence programme or a real human,
and tries to distinguish between the two. To date, no-one has won the prize:
We are still able to easily spot the computer.
Does your sales force add enough value? Is you sales force only slightly better but ten
times more expensive? Does your sales force only add value at a certain stage of the sales
process? The automotive sector seems to be headed in this direction: Websites enable you
to design and cost your perfect car, then you can visit the showroom for a test drive and
arrange personalised finance.
If trends persists, then maybe the showroom will become obsolete and your car will arrive
at your home with an experienced driver to take you for a test drive.
The automation process has become so highly sophisticated that parts of the buying
process are better served by automation (i.e. web-based technologies). It is widely known
that many customers do extensive research on-line before engaging with suppliers. If sales
organisations do not do something better than automated customer choice
software, they are at risk.
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Four technologies to watch for in sales
Artificial Intelligence
Google just Spent $400m acquiring
“Deep Mind”, a business specialising in
artificial intelligence and computer
learning. Emotient and Affectiva in
California are developing computers
that recognise emotions via webcam
(3). Maybe “hard computers” will
outperform sales people at “soft skills!”
Driverless Cars
“Not if, but when” is the quote from the
HIS automotive report (4) What does
it mean for an organisation if field staff
can be made 2x more productive when
“out of the office?” Will the lines
between internal and external sales
roles blur? What will the “sales” role
look like in the future?
Smart Shopping APPs
Deloitte’s recent report on smart
shopping (3) reminds us how the way
we buy will be transformed: With
smart lists, GPS, supermarket CRM
systems, the convergence of
technologies means we can be a lot
smarter in what, when and how we
buy. E-Portals for procurement also
influence the B2B transaction. How will
buying and selling evolve in the light of
smartphone technology?
The Internet of Things
With so many devices becoming
“smart”, acquiring and relaying data to
remote locations, In the same way
diagnosing a client’s needs is becoming
much more sophisticated. Smart
buildings for example, capture a huge
amount of data that can be analysed to
find new ways to save power and cost.
Is a site survey by a fallible human as
good as such advanced diagnostics?
The Singularity University is a hotbed for bringing game changing technologies to fruition: From Google Glasses used as lie detectors, to contact lenses that can monitor diabetes (2) the possibilities are truly endless. The four technologies opposite are highly likely to impinge on sales organsiations.
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Does the sales organisation add enough value?
At the core of the idea of being replaced by technology is the question of what value a human actually adds during the buy-sell process. Please participate in our SOVI survey (page 17 and find out how your own organisation fares). Not all sales are created equal and not all sales processes proceed in the same way. The fine detail of these differences are at the heart of assessing the risk of whether a sales organisation will be replaced by automated methods. A simple example: If matching your offering to client needs is a genuinely complex affair, involving multiple stakeholders and numerous product / service variations, then your sales people are probably standing at the back of the queue when it comes to replacement by robots. If on the other hand, choosing a product is very simple, and open to point by point comparison, then your current sales model could be vulnerable to automation. There is a further risk from peer to peer recommendation: Tripadvisor is a good example. When choosing a restaurant in your holiday resort, do you take the recommendation of the waiter outside the door cajoling you to come in, or the ratings of 50 tourists who already ate there? How effective is the sales person in this case?
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The economics risk
It is a well cited fact in classic economics, that where perfect competition exists, only “normal” profits can be made. If we are not able to differentiate our offering, then e-auctions, brutal procurement drives and shrewd negotiators can slice our profits.
Economics has its own way of finding inefficient buy-sell transactions. It’s important to remember that the cost of acquisition of a product to society is the sum of the sales organisation costs AND buying function costs. Therefore, where cost pressures exist, the efficiency of this transaction is also under pressure. There has already been a move towards inside sales (5) according to HBR, twice as many organisation increased their internal sales teams, compared to those who decreased them. What other changes could we foresee that could make sales more lean? In today’s world of democratised publishing and rapid idea diffusion, new business models are shared and deployed extensively. If another sector has a higher value method of search and acquisition of services, it won’t be long till they find your sector.
“At what point does having a sales organisation become more expensive
than shifting your product / service by other means?”
“Can the cost structure of your industry be done cheaper, better,
differently?”
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Client transformation risk
No man is an island, nor an organisation. Well adapted sales forces are, by definition, well adapted to their client’s needs. And if they change, then what? The healthcare sector is right in the middle of this transformation today. With the NHS procurement model changing substantially, pharmaceutical firms are feeling their way in terms of new engagement models. Market access managers and the up-skilling of sales staff to become Key Account Managers are two examples of structural change. Most organisation are quite good at tuning into client changes and adapting incrementally. In a “Death of a Sales Force” spirit, what about if we take the disruptor’s view? Could we envisage a better way to manage the buy-sell interface that does NOT involve a sales force? One of the pitfalls of “sales excellence” is that it seeks to optimise a sales organisation. In doing so, we can create a kind of myopia that no longer asks the existential question about the sales organisation that could transform our sector. In rethinking our organisations, it helps to think beyond the boundaries: If we think of buying and selling as “acquisition” instead, then it helps to free us from “more of the same” thinking.
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The competition risk
You might be forgiven for saying “nothing new – the competition’s main purpose is to put us out of business” What is perhaps new is the way in which competition wages a war against us.
Niraj Dawar, writing in the Harvard Business Review gives the example of Hyundai’s unique financing offer launched in January 2009 (6). It enabled customers to hand back their new car without penalty if they lost their job, or could not afford repayments. In the month of the launch, they outsold Chrysler who had four times as many dealerships! This kind of “downstream USP” is being used in other sectors too. It means the job of defending against the competition is ever more challenging and tricky to spot. Surveying the competitive landscape means looking even further along the supply chain and seeing the bigger picture. Of course, responding to a competitor may mean we need even more sales people on the ground: It does not necessarily mean “Death of the sales force” as a consequence. What is happening in your supply chain that has implications for your sales organisation?
“Sell cars
better, not
sell better
cars”
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The inflexibility risk
The highly pragmatic book “Cracking the Sales Management Code” (7) sets out how leaders can design metrics and management practices to drive the sales organisation. The payoff in their words is to create a “strategic weapon,” not just a “revenue machine.”
This means leaders can make decisions about strategic direction and be confident that the sales force will be disciplined enough to enact it, rather than making the numbers in an unpredictable way. Therefore, they could target a specific product / competitor / sector and the sales force could be quickly deployed to execute it. Sales is changing. Two articles featured in the Harvard Business Review “The end of solution selling” (8) and “Dismantling the sales machine” (9) say it all. These reviews cover both how we interact with customers and how we empower sales people to do this in the best possible way. Evolving a sales force is no mean feat: Looking to healthcare as an example, despite having sales excellence managers in place for some time, pharmaceutical heavyweights are struggling to adapt to its changed customer, the NHS. Inflexibility = job losses. In some ways, the inflexibility risk is the closest parallel to Arthur Miller’s character’s demise. Unable to make a personal transition to a new world, Willy Loman rapidly became obsolete. The inflexibility risk is unique in that it is mainly influenced by internal factors. It is a challenge related to organisation design and human behaviour which does not make it any easier to deal with!
“Is your sales force agile? “
“Can your sales force change direction quickly and pursue it with vigour and
discipline?”
“Does your sales force have skill, focus and role agility?”
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The legislation risk
The UK has seen a very visible example of this with utilities. Under intense pressure from consumer groups and the public, door to door selling of gas and electricity contracts has been outlawed. Similarly, following revelations about aggressive selling practices at Lloyds Banking Group, once again, the sales of financial products is under intense scrutiny. Unfortunately for sales organisations, these high profile cases could have a spill over effect, as consumers’ mistrust grows. And it is not just B2C interactions in the spotlight: After the Bribery Act of 2010, it is clear that the government wants to shine a light on all commercial practices to make them more open and transparent. From our point of view, sales leaders have a responsibility to think beyond profit, bonus, commission and consider the wider implications of the sales organisation. Leading the way in this kind of environment is not only ethical, it is also good business. What do our customers think if we work tirelessly to improve the conditions and fairness of how they buy from us?
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Implications of the 6 forces
Oh happy days! Who would be a sales leader with all these risks and forces
disrupting the sales organisation? Especially where multiple forces act. Good
sales leaders have to be master strategists as well as inspirational
implementers. Working with over 50 sales organisations, we have noted that leaders who can fluidly
blend these two modes are very rare. Often, they have been promoted due to being
action orientated with excellent sales results, not for their strategic management abilities. The
two points of view can be encapsulated as below:
“I must drive hard for results with my team today”
“Is a sales organisation the best way for my business to transact buying and selling?”.
The good news is that this type of thinking is trainable and furthermore, the job of creating the
next generation of business model is wildly exciting!
We believe the first step is to make a high level analysis of the importance of
each risk, hence our invite to assess your sales organisation in the SOVI
survey (see next page).
Then, it is wise to start a strategic journey of challenge and reinvention to see if you
can design a better model and implement it before someone else does. To do this
you can join our Sales Organisation Strategic Scenario programme
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The Sales organisation vulnerability index (SOVI)
In order to help you assess the level of strategic risk for your business, we have created the Sales Organisation Vulnerability Index (SOVI). By completing it, you will get an indication of which risks are most significant, and how urgent it is to act. We would like to track this index in various sectors and intend to publish the findings via our website in November 2014. To get your own personal assessment, please email: [email protected] and we will send you your own personal hyperlink to the SOVI survey. You will receive your personal report, free of charge, within one week. We also would like to help you re-invent your sales organisation and so we have developed the Sales Organisation Strategic Scenario Programme. Read on for more details.
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Strategic Scenario Programme
How do we move forward from here? Having raised the prospect of sales force annihilation, what positive steps can we take? We have created a programme to help you think through and investigate how you could evolve your current buy-sell model. This involves a structured process of analysis, creative destruction, options thinking, evaluation and scenario planning: Working with a small team of your mavericks, horizon scanners and sales specialists, we will help you to pragmatically think through your future to stay several steps ahead of your competition. The first step? Complete the SOVI survey and then contact us to design the right programme for you.
Introduction to strategic
thinking
Analysis projects
Introduction to creative destruction
Ideation phase
Evaluation phase
Formal scenario planning
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A journey into sales futurology
“Karolina’s smartphone burbled gently. She woke from fitful slumbers and read the message “Your
car arrives in 30 minutes – headed for Oxford” When her driverless car arrived, Karolina jumped in and
began mentally preparing for her first client visit. Apparently her firm’s emotion recognition software showed that
this particular client was very interested in a new product just introduced: During the 6 minutes and 30 seconds he
visited the website, the software detected no less than 14 indicators of above average interest.
Her attention was diverted as the car changed route. Probably it was following the new automatic time optimised
route programme. After preparation, Karolina made 3 video calls to clients that were out of her territory. Just
before she got to the first meeting, a new prospect had requested a visit to demonstrate their new technology and
she replied “yes” to the automatic schedule and route adjustment. This latest innovation allowed genuinely
interested prospects to request a visit and receive it within 24 hours, thanks to the salesforce coverage optimisation
algorithms.
After her first successful meeting, Waitrose presented an en route drive-through lunch offer which would mean
healthy food on-the-go and a maximum stop time of 2 minutes. “Healthy lunch with hardly any down time? I don’t
mind being sold to in that way,” she thought to herself.
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Next steps
Sales Organisation Vulnerability
Index (SOVI) Please email
to receive your complimentary personal
hyperlink to assess your organisation with the
SOVI.
You will receive your report within one week
Data protection: We will NOT share your input
with any 3rd parties.
Strategic Scenario Programme If you would like to begin an expertly guided
process of strategic reinvention for your sales
organisation, please contact us by the most
convenient means:
T: +44 (0) 121 277 4642
References
1. “From exponential technology to exponential innovation” Hagel et al 2013 Deloitte University Press
2. www.singularityuniversity.com
3. “I have not begun to shop yet” Deloitte review Jan 2012
4. IHS automotive report
5. “The trend that is changing sales” Steve Martin Harvard Business Review Blog Nov 2013
6. “When marketing is strategy” Niraj Dawar Harvard Business Review December 2013
7. “Cracking the Sales Management Code” Jason Jordan & Michelle Vazzana
8. “The end of solution sales” Adamson et al Harvard Business Review July 2012
9. “Dismantling the sales machine” Adamson et al Harvard Business Review November 2013
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Your personal risk evaluation
Risk For our sales organisation this risk looks like Follow up work to be
done
Replacement by
technology
Economic
Client
Competition
Inflexibility
Legislation
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Selling Interactions Limited
2nd Floor – Quayside Tower
Broad Street
Birmingham
B1 2HF
To find out more contact us:
T: +44 (0) 121 277 4642
W: www.sellinginteractions.com
