Call this the era of the hard sell.
In a perpetually post-recessionary economy that’s doing little more than shuffle along sullenly, many salespeople are finding it tougher than ever before to close a deal. Product cycles are shorter, but sales cycles have grown longer. Ultra-sophisticated data-mining services produce reams of leads, but no one answers the phone anymore, especially for cold calls. E-mails get zapped by overactive spam filters. Everyone’s wise to the financial-planning seminar shtick. Call centres generate a torrent of telemarketing, making a mockery of the importance of the personal touch, long the sine qua non of the successful pitch.
When or if sales reps finally do connect, they encounter prospective customers who are, by turns, deeply skeptical or dauntingly well informed about what they want to buy, what the competition offers, and how much they’re prepared to spend. They’ve been to the B2B website, read the specs, know the tricks and don’t have much time anyway—certainly not for a liquid lunch or a leisurely round of golf. The upshot is that the long and difficult task of orchestrating a sales call increasingly leads…nowhere. “It’s a bit of a perfect storm,” sighs Harvey Copeman, president of the 30,000-member Canadian Professional Sales Association.
Sales is in a state of deep flux, and some observers believe traditional sales professionals—those affable, commission-driven vets versed in the art and science of salesmanship—are a dying breed. At the least, sales departments at many companies are contending with an existential crisis. “There have been some pretty radical shifts,” says Mark Stuyt, a sales force coach for Salesworks, a Vancouver firm. “[Selling] is much harder now than it’s ever been. There are more sales opportunities that are ending up in no decision.”
In a profession intrinsically fuelled by confidence and optimism, the steady accumulation of bad news has a funereal quality, especially for those who remember the heyday. After the Second World War, Americans flocked to sales gigs with the gusto of a nation eager to assert itself as the world’s dominant economy. During the 1980s, when the baby boomers had by and large entered the labour force, the profession grew in the U.S. by a staggering 54%. But with the advent of the Internet and e-commerce, the decline of U.S. manufacturing and the huge increase in imported goods from Asia, the expansion in U.S. sales jobs begun to recede. By 2007, according to Massachusetts Institute of Technology economist David Autor, the category began shrinking in real terms, and doing so faster than any other employment sector.
While Canada saw a similar postwar boom in sales jobs, it hasn’t experienced a comparable slump. In 1987, 8.6% of the labour force worked in sales jobs, estimates Statistics Canada; a generation later, that figure has inched up to 9.7%, with about 3.7 million Canadians working in “sales and service” as of September 2011. But the industry here is also in upheaval, with its main challenges centred on recruitment. Canadian firms struggle to attract skilled sales reps because the required skills have become much more specialized. A January 2011 global survey of almost 39,600 employers worldwide, conducted by Manpower Inc., found that in Canada, sales rep jobs ranked second on the list of 10 most-difficult positions to fill (top honours went to skilled trades).
It’s an international problem. Indeed, job seekers appear to be steering away from sales positions because of the uncertainty associated with commission-driven compensation in a tough economy. But the statistics don’t tell the whole story of the turbulence sweeping through the sales department. Many of the most wrenching changes involve structural and technical forces. These include:
¦ Consolidation. In recent years, many sectors experienced waves of mergers that gutted regional sales jobs as head offices centralized purchasing. “There are fewer salespeople because there’s less of everything out there,” says Bob Lupmanis, vice-president of enterprise sales at Thomson Reuters, provider of specialized business information. Client firms, he adds, are doing their own form of centralizing, increasingly looking to consolidate relationships and the number of vendors they deal with.
¦ Commoditization. Many types of products (and services) now make the transition from high-value good to mass-market commodity in a shorter period than was the case even a decade ago. The result of this accelerated cycle is sharp downward pressure on margins, says Jeff Goldberg, Toronto-based regional account executive for Success Factory, a California firm that sells workforce performance software. Companies facing price spirals have little choice but to slash their sales force or move to indirect or e-commerce channels to protect their margins. “You have to be prepared to sell the way people want to buy,” says Goldberg.
¦ Redefinition. In fiercely competitive sectors such as financial services or telecommunications, sales responsibility is increasingly pushed right down to the front lines of customer service. Alan Middleton, a professor of marketing at the Schulich School of Business, points out that the big banks now train tellers to upsell whenever they’ve got a customer standing at the wicket or asking a question on the phone. “They’ve recognized that by selling through head office, they’re losing the ability to cross-sell,” Middleton says. “But that won’t be called selling because no bank person wants to be called a salesperson.”
¦ Information access. The Internet has done more to unravel traditional selling than anything else. In the old paradigm, sales reps were the ones who supplied prospective customers with product information and expertise. Not today. “When a customer picks up the phone, they’ve already done their homework,” says Jeremy Miller, co-founder of Leapjobs, a Mississauga, Ont., sales recruiting company. As a result, salespeople struggle to make themselves relevant in the transaction process.
All these trends have made it dramatically harder for sales professionals to nail down a deal. Dan Richards, who runs Client Insight, a Toronto firm that offers sales training to financial advisers, says the traditional “10-3-1” rule no longer computes. Once, a sales rep would make 10 cold calls to generate three appointments, one of which would culminate in a sale. Today, a sales team may make 2,000 calls, an effort that yields about 80 conversations with real people, five meetings (two of which will be cancelled) and one sale. “That illustrates how daunting the math has become,” he says. “The landscape has fundamentally changed the way people want to be communicated with.” And companies have no choice but to adapt.
Six years ago, Purolator was saddled with an out-of-date sales operation. The courier company’s reps spent lots of time manually filling out forms, and sales managers lacked a crisp sense of customer churn, what was in the pipeline and other important sales data. To fend off shipping giants like FedEx and UPS, Purolator overhauled both what and how it sold. For starters, the U.S. division decided to move away from a purely transactional approach to a more “value-based” selling strategy—a shift many companies are making as they try to create enduring relationships with important customers. “If you win customers on price, you’ll typically lose them on price,” observes Harry Smit, Purolator VP of sales.
Instead of looking to undercut competitors, the company began offering corporate customers customized large-freight shipping services. That, in turn, required a more intensive approach to selling, says Smit. “You’re more than just a rate sheet. The length of the sales cycle can be extended. But the prospect of closing has increased.” Indeed, since 2005, Purolator has grown its large freight business from nothing to $70 million a year.
As part of this push to value-based selling, in 2009 the company also armed its 200 reps with a customer-relations management system from Salesforce.com. The San Francisco–based CRM leader has borrowed copiously from social-networking platforms to create a sales-oriented social network that has rapidly eclipsed more traditional CRM tools. Features such as news feeds, status updates and friends hasten the sharing of up-to-the-minute lead databases, sales presentation decks and other tactically useful information. Smit’s team uses such software to track where the reps are in the sales process, which deals are at the closing stage, and whether a team in a certain region has locked on to a successful formula.
Purolator is hardly alone in shaking up its sales operation. In many sectors, sales teams are reprogramming themselves. Jeremy Miller, the sales recruiting consultant, says his 21-year-old firm worked for years in a very traditional way: generating leads, making appointments, then signing recruiting contracts. But by the mid-2000s, the company was making a thousand calls a day to generate one client. The clients it did win, moreover, were less than inspiring—the sort that tended to churn through consultants and not pay their bills.
About six years ago, Miller’s firm rebranded and changed its sales approach. In place of cold calls, it shifted resources to search-engine optimization, social-networking techniques and other “pull” techniques. “We wanted to build relationships with people well in advance of them changing jobs or hiring us,” Miller says. It was a tough transition, but the overhaul has yielded a better quality of client and more job satisfaction for the sales staff. “You’re not sitting there and getting rejected all day long,” says Miller.
Customization to each client is key today. Sales trainer Richards counsels his financial company clients to take steps such as inviting potential customers to sit in on financial management sessions or sending out differentiated newsletters based on the prospects’ interests. “What you’re communicating is that this isn’t a traditional sales pitch,” he says.
Customers don’t have the time or patience to endure a lengthy sales call, even if they do want information about a product or service. In response, sales productivity companies have devised technologies that effectively deconstruct the sales call, allowing prospects to absorb the pitch on their own schedule. Salesman Jeff Goldberg recently began using Brainshark, software for building online presentations. It improves on PowerPoints and webinars by incorporating extras such as narration, video, podcasts and visitor comments. And because these presentations are web-based and hosted by Brainshark, sales reps like Goldberg can collect tactically relevant metrics, such as who viewed the presentations and for how long.
To address today’s business client—time-pressed, confused by data overload, unsure how to best allocate scare resources—sales reps, perhaps above all else, need to show a deep understanding of the prospect’s particular business needs. To become more relevant to the customer, says sales force trainer Mark Stuyt, the rep “needs to understand how that business operates. Industry content is absolutely critical.” But, he adds, “a lot of sales professionals know more about the product than the industry they’re selling into. By and large, they are ignorant of a lot of business processes.” Well-practised sales methods, such as buttonholing clients at industry functions, will no longer close a deal. “Business acumen trumps more traditional sales tactics,” says Stuyt.
At Purolator, for example, efforts to better understand the logistical needs of prospective clients led the company to send its sales force for business training at the Schulich School of Business. But Smit adds that Purolator has also sought to recruit a different breed of salesperson, one able to figure out what clients really need to solve their challenges, even if those clients don’t quite know themselves.
Many sales recruiters are looking for skills that go well beyond salesmanship, especially for technically complex businesses. “I know of pharmaceutical companies who have hired medical doctors with MBAs to work in their sales teams in Canada,” says David Soberman, a professor of entrepreneurship at the University of Toronto’s Rotman School of Management. Companies such as Alstom, Bombardier and Siemens, he says, hire engineers with postgraduate degrees to work on sales teams that go after major capital projects, such as high-speed trains or large airplane orders. These sales professionals “have to be technically brilliant to sell products of that complexity,” he says. “The salesman is no longer Willy Loman.”
In some businesses, in fact, the sales operation is now a team affair that draws on sources of expertise both inside and outside the sales department. At Thomson Reuters, for example, Lupmanis now works with a highly specialized group that includes experts in the technical specs, the content and regulatory issues—people who may be in New York, London or Bangalore.
Twenty-first-century selling isn’t all a hard slog, of course; just think of the guys peddling iPads. But most sales teams aren’t that lucky. In the current environment, reps need to be technologically versatile and thoroughly knowledgeable about their target audience. At the heart of this transformation lies the question of whether the sales function has lost the human interaction that once seemed essential. Yet, even in an era of downsized sales teams, automated purchasing and state-of-the-art CRMs, sales experts insist the personal element remains crucial. We still prefer to buy from people we like.
What has changed is that salespeople must have a very keen sense of how to make themselves genuinely useful to clients during a deconstructed transaction process that is a lot more complicated than it once was. Goldberg uses an analogy from the world of retail to illustrate the point: “Going into Home Depot doesn’t let you build a house all by yourself if you haven’t done it before.” Point is, those Home Depot clerks know how to talk up the snazziest power tools. But you trust them because they know how to build the houses, too.