There used to be a time when selling was a social activity. Sales people tracked their clients’ birthdays and anniversaries, knew their children by name, and fostered deep personal connections. It was a simpler time, it was a happy time. But times have changed. Today relationship sales reps do not hit quota.
Lynette Ryals, a professor at the Cranfield School of Management in the UK, did a study of 800 sales people and found only one in three reps were “consistently effective.” 63% of sales people don’t achieve their sales targets, and the worst performers were the “Socializers.”
Socializers are what we typically think of as relationship sales people. They’re good at initiating the relationship and establishing rapport, but they lack the knowledge and expertise to move the sale forward and close the deal.
Who has time for golf?
I appreciate sales people who take an interest in me and my business, but I need more than that. I need to solve problems, and move my business forward. And I’m not alone.
Time is at a premium. I don’t know any executive or business owner who isn’t concerned about their productivity or their time. They’ve got objectives to hit, and decisions to make. And when they engage a sales person they want someone who is not only pleasant to work with, but understands their business and gives constructive advice and feedback to make sound business decisions.
Sales aren’t made on the golf course, they’re made in the office.
Customers want Experts
Professor Ryals found the most effective sales profiles were “Experts” and “Consultants.” She writes, “Experts make selling seem effortless, keep customers happy, and consistenlty outperform their peers.” She goes on to state, “Consultants listen well and are good problem solvers; they develop solutions that meet their customers’ needs. But they tend to be one-dimensional and to forgo valuable case examples that could boost sales.”
The difference between Experts and Consultants is degrees of expertise. With some mentoring Consultants can integrate more case studies and industry expertise into their sales process. They have the foundation to facilitate the buying process, and as they grow in their job they’ll become Experts.
Experts and Consultants outperform Socializers, because they bring value to their clients. They are facilitators. They help clients contextualize all the information available to them, understand their needs and make sound buying decisions. And if the deal doesn’t make sense, they let the client know quickly so both parties can move on.
Great sales people are made
There’s an old myth that sales people are born not made. That may have been true twenty or thirty years ago, but not today. Extraversion and sociability may help a sales person initiate the sales process, but they’re not enough to bring it home.
Customers want experts: people who know their products and services, understand their applications, understand their place in the market, and can help clients navigate the buying process and make sound decisions.
These are not easy skills to acquire. It takes time, mentoring and lots of on the job training to grow from a Socializer to a Consultant to an Expert. The companies that outperform the competition get this, and work very hard at grooming their sales force into Experts.
What comments or suggestions would you add to this topic?
(Image credit: Chapel Hill-Carrboro Chamber of Commerce)
April 27th, 2012 
Posted by Jeremy Miller
Companies have a choice: get into social media, or get into it later. Either way every company is going to have to embrace social media as a key component of their marketing and communications very soon.
Yesterday I laid out this challenge to the Benefits Alliance Group in a keynote presentation titled, “Grow Your Brand in Social Media”. Right now social media is optional, but it won’t be for long. My suggestion to the group was to start mastering the tools now and get a head start in your industry.
Social media has tipped
In 2008 I wasn’t a big fan of using social media for B2B marketing. It wasn’t there yet. Not enough decision makers were using the tools.
According to Pew Internet Research, in 2008 73% of 18 to 29 year olds were using social media, while only 36% or 30 to 49 years and 16% of 50 to 64 year olds were using social media. In most companies the core decision makers are between 40 to 55, and in 2008 less then half of this demographic was using tools like Twitter and Facebook.
But the growth of social media has been a wave. By 2010 86% of 18 to 29 year olds, 61% of 30 to 49 year olds and 47% of 50 to 64 year olds were using social media. By 2010 social media had arrived and made sense for B2B marketing, because more than half of decision makers were participating in social media to some degree or another.
In less than 5 years social media has moved from the fringes of society to the mainstream, and it is becoming as ubiquitous as email and Google.
Avoid the resistance
Some companies are resisting social media.
“My clients don’t use Facebook and Twitter.” That may be perfectly true, but what about your future clients? Are you ignoring a key part of your prospect base by avoiding social media?
“I don’t have time for social media.” That too may be true, but you have a choice. You can choose to portion out some of your time towards these tools, or you can delegate it. If a company prioritizes these activities they’ll find the time and resources for it.
“I don’t know what to talk about.” Don’t over think it. Focus on the relationships. Look for opportunities to enhance your existing communications. For example, can you use these platforms to communicate more efficiently and effectively with your existing clients? What about your suppliers and partners? Go for the low hanging fruit first, and then consider how it can assist your marketing efforts.
You have a choice
I compare the growth of social media to websites. In 2000 having a website was optional, in 2012 you’re not a business without a website. Today social media is optional, but it won’t be for long.
Don’t play catch up. Get into social media, and start to enhance and extend your relationship building online. It’s amazing what you’ll discover once you get started.
What do you think?
(Image credit: Gee Ranasinha)
April 20th, 2012
Posted by Jeremy Miller
There’s a prevailing attitude that “sales driven” companies are superior. I know I held that belief for the longest time. But it’s a fallacy. Being sales driven is fine, but without continuous innovation sales are not sustainable.
This idea rang home for me while reading the Steve Jobs biography by Walter Isaacson. Steve Jobs said,
“I have my own theory about why decline happens at companies like IBM or Microsoft. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesmen, because they’re the ones who move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company. John Akers at IBM was a smart, eloquent, fantastic salesperson, but he didn’t know anything about product. The same thing happened at Xerox. When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off.”
I concur, but the idea is completely contrary to my upbringing and training. I was brought up to admire companies like Xerox and IBM, and the way they developed their sales forces. I grew up listening to Tom Hopkins’ sales training tapes, and reading all the sales books I could get my hands on. I believed all great organizations were sales driven. But the unspoken truth is a great sales force cannot be great without great products and services.
Sales people are sales focused
One of the best examples of a company that was derailed by being too sales driven is Xerox. Xerox became a great company based on its innovations. They fundamentally changed the way we manage and share documents by making it possible to quickly and easily copy documents en masse.
In 1938 Xerox, then known as The Haloid Photographic Company, invented xerography – the first dry photocopying technique. In the 50′s they commercialized the technology, and in 1959 launched the Xerox 914. The 914 took off with business users, and Xerox became a serious player.
But in the late 70′s, Xerox lost sight of its innovation roots. It still had incredible R&D strength, but the company’s management didn’t value it. The leadership was focused on the cash cows, large photocopiers, and they didn’t value the incredible innovations coming out of their PARC research facility. Instead, Xerox’s leadership let the likes of Steve Jobs and Bill Gates take the innovations of the PARC team, and commercialize them into the Macintosh and Windows.
History repeats itself
Xerox is not alone. As Steve Jobs points out, losing sight of innovation can happen to any large, successful brand. As the company matures the sales force appears to have the most immediate impact on the company’s growth, and it’s easy to forget the present sales successes are based on products created 5, 10 or 15 years ago.
We can see the same story playing out at Research In Motion, a better sales force won’t cure RIM’s woes. The only way they’re going to recapture their glory is going back to their roots: innovate, design and launch game-changing products.
Steve Jobs said, “My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary.” The key line there is “make great products.” This is contrarian. Steve recognized great products build great businesses, not great sales forces.
What’s your take?
(Image Credit: FadderUri)
February 24th, 2012
Posted by Jeremy Miller
“Sales can exist without marketing, but marketing can’t exist without sales.”
This attitude is pervasive, especially in traditional industries, but it’s not true. As much as marketing can’t exist without sales, sales can’t exist without marketing either. They are intrinsically linked and dependent on each other.
In the pre-Google era B2B companies grew one sales person at a time. Ads and brochures didn’t sell complex products like servers, copiers and professional services – sales people did. As a result companies like Xerox, IBM and Canon built huge field sales forces to grow. They tasked their sales people to prospect and engage customers, educate them on the products, and ultimately sell them. Marketing was there to provide collateral and tools, but sales people were the heroes.
Times have changed. For many companies, sales people don’t initiate the customer relationship anymore, websites do. And the website is just one touch point in forming and managing a cohesive customer relationship.
Create a total customer relationship
Your customers are going to multiple places to find the information they need to make informed purchase decisions. They go to Google. They go to your website. They go to YouTube. They go to blogs and social media. And they talk to human beings too. We live in an information rich world, and we constantly tap into the available tools to get the data we want and need.
If you don’t manage all the customer touch points, all the places they go for information, then you aren’t managing your client relationships effectively. Sales people can’t do all this work on their own, they need marketing. Marketing manages the informational client relationships, and sales people manage the human relationships.
Sales people are more valuable than ever before
Sales people may not carry the same influence they did a decade ago, but their impact on the buying process is essential. Since information is cheap, customers can find all the data they need to get informed. The problem is they’re overloaded with information and need help. That’s where sales people come in. They humanize the business, and facilitate the purchasing process.
Complex products don’t sell themselves – they never did. The difference today is a sales person’s role is not to sell, but to facilitate. The customer needs someone to contextualize the information they’re finding, ask questions to provoke greater understanding, negotiate terms and close deals.
One doesn’t exist without the other
Over time sales and marketing have evolved into completely separate business units and functions inside an organization. But it’s time to challenge that notion. One cannot exist without the other. It’s the collective work to form, manage and scale customer relationships that builds a brand and drives revenue.
Companies with amazing brands are already figuring this out. They have sales and marketing aligned with clear objectives that tie back to the overall business strategy. Their sales and marketing teams work together to serve customers and build relationships. They work as one cohesive unit – and that’s the point.
December 8th, 2011
Posted by Jeremy Miller
Splitting a sales force into hunters and farmers is a popular model. The hunters are responsible for new business development, while the farmers work on managing and growing the existing account base.
The concept brings a Taylorist view to sales force design, and one I advocated for six years ago. In January 2006 I wrote, “Hunting and farming a territory are two distinct activities, and by separating them you can improve sales performance by focusing your people on what they do best.”
I was wrong. Dividing a sales force into hunters and farmers makes sense on paper, but in practice it doesn’t work very well. The model suffers from three major problems:
- Increased sales force turnover
- Increased cost of sale
- Stunted customer relationships
Let’s unpack these further.
Increased sales force turnover
Hunting focused sales forces experience very high turnover of first year hires, typically in the 50% to 75% range. Reps are hired and put in the field, but only a small number survive. That’s why many sales managers will hire four sales people with the expectation that only one will make it to the second year.
It’s easy to blame sales people for not being “good enough,” but that’s a cop out. If the turnover rate is greater than 25% in the first year it’s not the sales reps’ fault, it’s a sales force design problem.
The hunter-farmer model is ineffective, because it has a poor return on effort. Hunters face a daily barrage of rejection as they look for new customers who need their products and services right now. It is hard, discouraging work. Sales people could deal with the daily rejections if they were paid for it, but the reality is sales people are only paid commissions for sales successes not sales work. New hires quickly realize they are in a losing battle. The job is hard, the results are sporadic, the chances of success are limited, and in the end they move on.
Increased cost of sale
A hunter sales force is basically an expensive lead generation platform. Hunters are responsible for finding new business by networking, cold calling, knocking on doors and building relationships with future customers. Their job is to touch enough prospects on a regular basis to be their first call when they’re ready to buy.
The problem with using sales people for lead generation is their reach is severely limited. A sales person can only talk to one person at a time, and there are only so many hours in the day. With the growth of the internet, social media and Google there are far easier and more scalable ways to engage customers. Employing sales people to hunt is an 80′s and 90′s model, technology displaced it.
Stunted customer relationships
Above all else, the hunter-farmer sales model benefits the company not the customer. It focuses on selling activities versus relationships.
Before a customer buys they have to like and trust the brand. They have to believe the company will deliver on its promises, and fulfill their expectations. Part of forming that belief comes from the sales person they engaged with from the beginning. When a new person is parachuted in after the contract is signed, the relationship process is forced to start over.
Most customers will accept the process, because they want the product or service they purchased more than the sales person. But it also stunts their overall relationship with the brand. It reduces their potential to provide future referrals and references. Since the hunter moves onto the next prospect and the farmers are not rewarded to find new business, customer referrals and references are overlooked. The customer is moved through the proverbial sales assembly line to maximize the organization’s efficiency not relationships.
Focus on the relationship
Organizing a sales force for maximum productivity is essential, but we need to refocus our attention on relationship building.
Customers go through a typical relationship cycle: aware, like, trust, buy, repeat, refer, reference. Customers aren’t going to buy simply because they’re aware your company exists, they have to like and trust you first. Once they become customers they have to be confident in the product and your capabilities before they will refer you to friends and colleagues. Often times they will purchase a few more times before they give out referrals and references. Recognize how your customers buy, and organize sales people to build rock solid relationships with them.
A sales force aligned to maximize customer relationships will experience three benefits:
- More loyal, engaged customers
- More referrals and leads from customers
- Lower sales force turnover with more fulfilled sales people
What’s your take?
What is your opinion? Does the hunter-farmer sales model work? What sales force design do you think is most effective?
July 12th, 2011
Posted by Jeremy Miller
Social media used to be something used just by teens and tweens. Not anymore. Everywhere you turn you can see social media’s influence. For example, every major news story this year has included a social media angle.
According to the Financial Times, activity on Twitter hit its highest sustained level ever when news emerged of Osama bin Laden’s assassination. People were tweeting 3,440 times per second between 10:45pm and 12:30am on May 1. Put that into context, that’s 21,672,000 tweets in an hour and forty-five minutes!
Twitter was launched in 2007. It took over 3 years for the site to reach a billion tweets. Now we’re seeing upwards of a billion tweets per week. And each time we see a major world event, the adoption rates and usage levels increase.
Just look at the events of 2011 alone. It started with the people of Egypt and Tunisia leveraging the communication powers of Facebook, YouTube and Twitter to organize and overthrow their governments. We then watched the devastation of the earthquake and tsunami in Japan in real time. Even President Obama’s announcement of Osama bin Laden’s death was upstaged by Keith Urbahn, the former chief of staff for Donald Rumsfeld. Urbahn wrote at 10:25pm May 1, “So I’m told by a reputable person they have killed Osama Bin Laden. Hot damn.”
Social media has tipped
It’s really striking to see how fast social media has grown in the past 5 years. Facebook was only launched in 2004, and already has over 600 million members. Twitter was launched in 2007, and is now the number one source for breaking news.
What is also interesting to look at is the social media adoption rates amongst adult internet users. According to eMarketer, in 2005 only 16% of 18 to 29 year olds were using social media, and by 2010 86% of them were using social media. 12% of 30 to 49 year olds were using social media in 2005, and by 2010 61% of 30 to 49 year olds were using the platforms.
The masses are jumping into social media worldwide. The platforms are easy to use, easy to participate in and they’re becoming increasingly integrated into our day-to-day lives.
Business is not quite there yet
Even though individuals are using social media, companies have a long way to go.
Citibank surveys small business owners annually. In 2011, only 36% of small businesses are using social media for their marketing. That’s up dramatically from 2010′s level of 19%. But still, doesn’t it seem odd that just over a third of small businesses are using social media for their marketing?
If we look at the adoption rate of social media in a business context, more than two-thirds of 30 to 49 year olds are using social media. That’s the core age group of B2B decision makers. If two-thirds of your buyers are using social media, it’s a pretty good indicator you should be too.
Even though the general population has jumped into social media with both feet, many businesses are hesitating. The challenge is it’s so new. There isn’t a clear path for how businesses should drive revenue through these platforms. The marketing model hasn’t become second nature yet.
But I see that changing. There’s a lot being invested to understand “how to use the tools” for marketing. Soon we won’t even be talking about social media, its growth and its applications. Soon we’ll just accept it, and use it like any other communication tool. It will be as natural as email or phones.
What’s your take?
May 13th, 2011
Posted by Jeremy Miller
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