Death of a Sales Model?

By Jake Sorofman | January 22, 2013 | 5 Comments

Take one look at any modern business model and you’ll notice a clear pattern forming: Marketing is moving from outbound to inbound and sales teams are coming home to roost. Yesterday’s expensive field sales organizations are being traded for lower-cost inside teams, even in the world of complex, high-consideration products and services.

The recent Bloomberg Businessweek article “Rebirth of a Salesman,” despite its cheerful title, paints a fairly bleak picture for the future of outside sales. Perhaps a better title would have been, “Death of a Sales Model”—because, everywhere you look, the field-centric model is in a state of decline.

Why? Because road warriors are expensive: travel, car allowances and fatter paychecks are just part of the cost. Selling in the field can also be less productive: when the deal doesn’t materialize, that onsite visit to Louisville is pure cost—in both expense and opportunity forgone.

But perhaps more importantly, sales models are changing because marketing models have changed. The rise of digital marketing has shifted the power to the consumer, who can navigate the front end of the sale cycle without the assistance of a sales rep. Search and social networks allow consumers to discover and validate options and alternatives before engaging with sales. And when they do, they’re further into the consideration phase and often ready to buy. An onsite visit becomes overkill. Inside sales becomes a better match for inbound business models.

We won’t get there overnight; but we’ll all get there over time, often as a matter of necessity.

But what about the most arcane products and services that require a PhD to understand? First, these products are losing the battle to simpler alternatives that embrace more consumer-oriented design principles and cloud-based delivery models. And, even when products and services are necessarily complex, they’re often repackaged to capitalize on this new dynamic. Freemium features allow customers to get a small sample of your value without the friction of cost. Same with open source models that unleash free IP toward the goal of commercializing something downstream. Of course, draw the lines between free and commercial incorrectly and you risk getting stuck in the tar pit of free stuff. A compelling up-sell is absolutely critical to making this work.

All of this is to say that the inbound/inside model is the future of modern business. But, you might ask: what about relationships? They’ll always be essential to effective selling. But the strongest relationships are based on empathy, which requires a deep appreciation for your counterpart’s desires and circumstances. Today, that often means grounding your fleet of pitchmen (and women) and letting customers come to you, on their terms.

The subtitle of the Businessweek article probably says it all: “The New Willy Loman Survives by Staying Home.”

5 Comments
  1. 25 January 2013 at 1:32 pm
    Bob O'Brien says:

    Excellent analysis Jake. These are significant and fundamental changes impacting the business of marketing & sales. It is going to be a tough transition for companies but also for field sales reps who, in many cases, have spent most of their career in the field. I do see a scenario of inbound marketing & inside sales ‘landing’ acounts and a field reps – albeit a fewer number of them – focusing on the ‘expand’ business. In those situations they typically will have a greater productivity with customers.

    Bob

  2. 25 January 2013 at 2:21 pm
    Jake Sorofman says:

    Thanks very much, Bob. Agreed! Suggesting a wholesale roosting of the field team is oversimplifying it, for sure. We’ll see hybrid scenarios like the one you described as well as field-based pre-sales engineers pooled or teamed with inside reps. Here, the deal happens on the inside, but the proof happens onsite with prospects. This will all vary by vertical and circumstance, but I think trend line is unambiguous: Inbound/inside is the future.

  3. 28 January 2013 at 7:44 pm
    Richard Fouts says:

    Sure, the time and money associated with a direct sales force is a burden, but this move isn’t just about cost avoidance. One could argue that today’s digital buying experiences are even better than the classic sales call. I’m not talking about search and social, rather enriched scenarios, that include video … a buying experience that takes all the good things buyers like about personal seling, but keeps them in control. That’s what this is really about. Buyers in charge of the buying process verus sales people in charge of the selling process.

    This trend is spilling over into other scenarios. Companies that fly people into HQ for an interview are turning to video. These days, a job candidate directs employers to his blog … and his YouTube channel.

  4. 28 January 2013 at 7:48 pm
    Richard Fouts says:

    It’s been said when one door closes, another opens. What types of new opportunities does this trend open up for the field sales person?

  5. 29 January 2013 at 2:48 pm
    Jake Sorofman says:

    Great points, Richard. Yes, combining the richness of personal selling with digital experiences should be part of the thinking. The reality is that customers still have expectations of sales organizations. They just want to control the ground rules in the front end of the consideration cycle. Once they’ve raised their hand, prospects still expect to engage with a pro. What does this mean for field reps? More efficient selling by way of a self-identifying pipeline. No more chasing ghosts down blind alleys. No more hoping and praying for a cold pipeline to convert. And, maybe, a little less time on the road, which isn’t a bad thing. Those who adapt to these new realities will find themselves better for it.

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