The Future of the Sales Profession: How to Survive the Big Cull and Become One of Your Industry's Most Sought-After B2B Sales Professionals

By Graham Hawkins

B2B sales is harder than ever before.

Product lifecycles are getting shorter, sales cycles are getting longer, there are more competitors entering the market, and buyers are doing most of their research online before they even call you. When you finally get the meeting, buyers only want your best price

• Language: English
• Publisher: MacMillan Company Limited
• Release date: Mar 1, 2017
• ISBN: 9780995445307

Book preview

INTRODUCTION

TIMES ARE CHANGING

‘One of the best predictors of ultimate success …

isn’t natural talent or even industry expertise, but

how you explain your failures and rejections.’

– Daniel Pink

IN 2010, I had a sales meeting that changed the course of my career. At the time I was the Sales Director of a software company called Attachmate, and the meeting was with one of our largest customers – a little company called Qantas.

Once a year we would meet with Qantas’s procurement team to negotiate the terms and conditions of our AUD1 million annual support agreements. When we went to that meeting in 2010, the first item on the agenda was vendor bashing – the process of a customer complaining about everything a vendor hasn’t done in order to get a better deal.

After having played the same game for several years running, I was sick of it. And, for the first time, I called them on it.

I asked, ‘Do we really need to continue with this charade? Let’s just talk like adults and get to the point.’

Unsurprisingly, every person in the room looked at me like I’d gone mad. Didn’t I know that this was the way things were done?

Exasperated, I explained, ‘You keep saying you want partners and not suppliers, but when we try to be a partner, you keep us at an arm’s length. Then, every year, we go through the same negotiation charade.’

At that point, the then Head of Procurement and Vendor Management closed the meeting and asked me to join her for a coffee.

At the cafe, she took out a pen and a piece of paper and explained that, as the Head of Procurement and Vendor Management, she’d been given a directive to start the process of vendor rationalisation – doing more business with fewer vendors.

She explained that Qantas had categorised their vendors into three tiers. In Tier 1, they had nine IT vendors – industry monoliths like IBM and Fujitsu – who were their preferred suppliers. In Tier 2, they had thirteen vendors, which included the likes of Microsoft and Oracle.

Attachmate was in Tier 3.

At the time of that conversation, Qantas had 363 vendors in Tier 3, and the Head of Procurement and Vendor Management had been tasked with cutting that number to 100.

This meant one of two things for Attachmate. Either we would be culled from Qantas’s list of vendors and they would find a substitute for our products with one or their Tier 1 or Tier 2 vendors, or we would be forced to sell our products via one of their Tier 1 vendors.

Either of these outcomes spelled disaster.

This meeting changed the way I saw my chosen profession of sales, and the future of that profession.

Before that meeting, the buyer landscape was wide open and filled with opportunities to sell into every market.

After that meeting, I saw that the market was shrinking. Existing customers were culling us and, unless we were one of the industry titans, new customers were less likely to choose us.

The dawn of a new era…

Times are changing for every member of the sales profession.

Buyers are not only more discerning than ever before, but they are more demanding. It is, therefore, getting harder and harder to engage with them. None of your customers care about returning your calls, and they rarely agree to that regular coffee catch-up unless there is a clearly defined agenda for the meeting.

Online shopping and eCommerce platforms enable buyers to search for, identify and acquire products and services on a global scale, often without the need for any human interaction. Buyers can now diagnose their own problems and prescribe an online purchase to solve those problems, meaning they no longer need sales people the way that they once did.

Meanwhile, competition has intensified across almost every industry, segment and category globally, with lower barriers to entry than ever before. This has led to buyers having more options and more information than they used to, resulting in the increased commoditisation of most products and services.

This is leading to margins (and profits) being squeezed as vendor sales people are forced to compete on price.

At the same time as sales profits are going down, the cost of making a sale is going up, with average sales cycles increasing due to the rise in consensus buying, with 6.8 decision makers involved in every purchase decision.¹

It’s no wonder that vendor businesses are now looking at ways to reduce costs, with a field sales force being one of the most expensive costs on the balance sheet. And, while one can argue that sales teams have always been expensive, the difference now is that there are more economical alternatives – such as engaging professionals on a contract basis, creating an inside sales force, and letting technology usurp the role of the sales person.

So why would a vendor business continue to invest in the sales function?

It is a classic pincer movement where sales people are being squeezed from both sides of the value chain: Buyers now prefer not to engage sales people, and vendors are being forced to reduce the high cost of sales in order to remain competitive.

This leaves you, as a sales person, under more pressure than ever to deliver results – and to deliver them quickly.

Your sales manager is pushing you to get your activities up and build your sales pipeline, all the while putting more and more scrutiny on your sales performance. It feels like the pace keeps speeding up: More calls, more meetings, faster, faster, faster!

Your weekly sales meeting is now a dreaded activity, a draining routine of deal analysis and high-stakes questioning regarding your activities and output. Which deals are you working on? Where’s your pipeline? Why is this deal stuck? What have you done to progress this deal? Where is your territory plan? Do you have a strategy? This deal looks unchanged since last week – why? How many meetings have you lined up this week? How many cold calls have you done this week?

What is your plan to bridge the gap between your current quota performance and your target?

If this sounds familiar, then the sad truth is that you are not alone. This situation is playing out weekly in boardrooms all over the world, with the pressure flowing from senior management to your sales leader and then, ultimately, to you.

Where sales used to be fun, now it’s a real grind. Where you used to feel respected, now you feel rejected.

And all of this has left you wondering whether you are in the right job, or whether you should be looking for another one.

A bleak future for sales professionals

Having spent close to thirty years in sales, the majority of my business associates are also working in B2B sales roles, and almost all are now complaining about how much more difficult and competitive life has become for B2B sales people.

Many of them are regularly missing their quotas and being put under increasing pressure to deliver results that continue to look unachievable, with Objective Management Group reporting that three out of four sales people are failing.² Similarly, a 2016 Harvard Business Review study puts the figure of sales people who are underperforming at sixty-three per cent,³ while CSO Insights puts the figure at 55.8 per cent.⁴ Regardless of the measure you choose, the fact is that an increasing majority of sales people are failing to hit their targets.

What future can there be for a profession in which more than half of the practitioners are inept? If this same ratio were applied to medicine, there would be patients dropping dead all over the place!

With more and more sales people deemed to be underperforming, and many sales people suffering the stress and humiliation of being ‘managed out’ or put on a ‘performance improvement plan’, it’s unsurprising that the average B2B sales team is losing twenty-seven per cent of its members per year.⁵

Over the past eighteen years, the number of sales people in the US per million dollars of GDP has halved, and Forrester Research predicts that over twenty per cent of all B2B sales people will be displaced by self-serve eCommerce by 2020.⁶

Why? Simply, buyers are highly educated with more access to information than ever before, which means they no longer needs sales people like they once did. Technology is facilitating automation and self-service transactions, meaning that the sales process can bypass the sales person entirely. And cost optimisation by vendors to address shrinking margins means that there is less money available for sales than ever before.

The end result is that fewer sales people are needed to keep the B2B sales machine running.

Which means the future is looking bleak.

How you can leverage the new realities of sales

So where does this leave you? As a sales person, is your only option to keep your head down, your activities up and hope you stay under the radar?

There is another option. Rather than succumbing to these new realities and simply hoping for the best, you can leverage these new realities to become one of the most highly paid and highly valued sales professionals in your organisation, and your industry.

The Future of the Sales Profession will show you how.

In Part 1, I cover a brief history of modern sales, from the inception of the modern sales force in the 1880s through to the digital, global economy in which we operate today.

In Part 2, I cover the cold, hard facts relating to the future of the profession – the macro trends that have led to a perfect storm of increased commoditisation, extended sales cycles, higher turnover and the disappearance of customer loyalty. In this part of the book, I will shine a light on major changes to the B2B landscape that may make you uncomfortable, because these changes demonstrate why past sales mindsets and strategies will not continue to achieve the same results (if any).

These trends are causing the role of the traditional, outside sales person to erode, and the truth is that many sales professionals won’t survive.

If you want to be one of the few who not only survive but thrive in your chosen profession, Part 3 will provide the blueprint required to withstand the tsunami of change that is now hurtling towards the sales profession, including how to proactively protect and enhance your career in sales. This part of the book will arm you with the strategies you require to get out in front of the pack and position yourself as a digitally driven, socially connected, mobile and highly specialised consultant.

Regardless of your employer type, industry sector or geographic location, this book is a must read for all B2B sales people. Your career now depends on how well you understand the new realities of sales, and how well you leverage them to shape your future.

A call to action

How will you respond? Sit back and wait to see how it all unfolds? Or take a proactive stance in order to protect your career and your future livelihood?

Millions of B2B sales people globally will be searching for a new profession in the coming three to five years. Will you be one of them?

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1 CEB Blogs. 4 Ways to Simplify the Seller Experience. https://www.ceb-global.com/blogs/4-ways-to-simplify-the-seller-experience/

2 Lyons, Dan. Sales Reps Have Little to No Idea What They’re Doing. The Huffington Post. March 12, 2014. http://www.huffingtonpost.com/dan-lyons/sales-reps-business_b_4949207.html .

3 Ryals, Lynette, and Iain Davies. The 8 Types of Salespeople. Harvard Business Review – Ideas and Advice for Leaders. January 21, 2016. https://hbr.org/

4 Schenk, Tamara, and Jim Dickie. 2016 CSO Insights Sales Enablement Optimization Study. CSO Insights. 19.

5 Hughes, Tony. How many sales people will be left by 2020? LinkedIn Pulse. March 25, 2015. https://www.linkedin.com/pulse/how-many-salespeople-left-2020-tony-j-hughes .

6 Hoar, Andy. Forrester Research, Inc. Death of a (B2B) Salesman, Cambridge, MA. 2015, 7.

PART 1

A BRIEF HISTORY

OF THE

SALES PROFESSION

CHAPTER 1

130 YEARS ON REPEAT

‘If you don’t know history, then you

don’t know anything. You are a leaf that

doesn’t know it is part of a tree.’

– Michael Crichton

MOST SALES PEOPLE don’t realise that the sales profession has undergone more change in the last five years than it has in the last 130.

But how can that be, when, over the past century or so, methodology after methodology, book after book, and training program after training program has been released, promising to revolutionise the sales landscape?

My mother is a history teacher, and she has always said that it’s impossible to know who you are today if you don’t understand where you have come from. For this reason, when I first began making judgements about where the sales profession was headed, I researched where we had come from and why our legacy approaches, attitudes and stereotypes exist today.

What I found was surprising. Putting aside some minor tweaks and variations, and some new terminologies and fads, sales people have performed the same fundamental role since the late 1800s.

Throughout the years, sales people have acted largely as autonomous agents who have been rewarded with commissions and bonuses. Their role was to push products into markets, and the value they delivered was sharing information that customers couldn’t access independently. Consequently, the sales person was seen as an expert in their field, and sales people who focused on addressing their customers’ needs and building relationships were able to position themselves as trusted advisers.

While a range of new methodologies emerged over the years, many of them didn’t offer anything new, as you’ll discover in this chapter. They sold systems and principles in a new package, but the fundamental structures and methods of the profession remained largely the same.

1800s: Rise of the snake oil salesman

When America established its western frontier in the 1800s, migrants lost access to many of the benefits of established cities in the east, including medicine, fashion and news. This led to the rise of the travelling salesman, with sales people travelling from town to town in horse-drawn wagons peddling a range of goods.⁷

There were no controls or regulations for these salesmen, leaving customers unprotected and the salesmen unpunished should their goods not deliver the promised results. This left peddlers free to make farfetched claims about the properties of their products in order to make more sales.

Unsurprisingly, this was the time of the ‘snake oil’ salesmen, or salesmen offering miraculous potions that would cure all manner of ailments – balding, pimples, in-grown toenails, aches and pains, and more.

To sell their potions, they would use elaborate sales pitches, including skits to entertain the audience, ‘lectures’ on the product itself, Quakers recruited as assistants to lend an air of moral respectability, and Native Americans recruited to validate the truth of the salesmen’s claims. They also planted ‘shills’ in the audience – people claiming to be satisfied customers who would support any claims.

The most well-known of the peddlers claiming to sell literal snake oil was Clark Stanley. After eleven years as a cowboy, Stanley maintained that he studied with a Moki Pueblo Indian medicine man who gave him the recipe for his Snake Oil Liniment. He then fashioned himself as ‘The Rattlesnake King’ and sold his liniment throughout the country in presentations that included killing rattlesnakes and squeezing their bodies for oil.

An advertisement in the 1890s described Stanley’s snake oil as ‘a wonderful pain-destroying compound’ and ‘the strongest and best liniment known for the cure of all pain and lameness.’ According to the campaign, the oil treated ‘rheumatism, neuralgia, sciatica, lame back, lumbago, contracted muscles, toothache, sprains, swellings, etc.’ as well as ‘frost bites, chill blains, bruises, sore throat, [and] bites of animals, insects and reptiles.’⁸

However, federal testing in 1917 found that not only did Stanley’s ‘snake oil’ have no medicinal value, but it didn’t even contain snake oil, being made of mostly of mineral oil, with one per cent fatty oil, some red pepper, turpentine and camphor.⁹

Unsurprisingly, snake oils and the like damaged the reputation of sales people. They started to be seen as liars and exaggerators with little care for their customers,¹⁰ willing to push a product onto a customer whether they needed it or not. Unfortunately for us, this has contributed to the bad reputation that sales people still suffer from to this very day.

1880s: Birth of the modern sales force

The idea of a modern, coordinated sales force came about when James H Patterson formed the National Cash Register Company (NCR) with his brother in Dayton, Ohio, in 1884.

At the time, there was no market for cash registers, with fewer than 400 having ever been sold. Few retail businesses saw the value in a machine that was seen to perform a simple task in an overly complicated fashion, and some clerks feared that the machines could be used to spy on their integrity.

Additionally, the salesmen themselves were a problem. Salesmen in general were seen as having questionable reputations, especially among established business people, and the sales people already employed by NCR were disorganised, unprepared for sales presentations and uncommitted to the company and the product.

As a true believer in the cash register – having cut his own retail store debt from USD16,000 to USD3,000 in six months and showing a profit of USD5,000 – Patterson knew something needed to change.

This led to a process of trial and error where Patterson invested in advertising, publicity, and direct mail that was distributed to millions, featuring pictures of the cash registers and testimonials from satisfied customers. The result was that prospects who had been unaware of the product started to develop a need for it.

Yet, with his salesmen unable to convert interested prospects into paying customers, Patterson needed to turn his attention to NCR’s sales force. He visited sales offices in over fifty towns and cities in just fifty-one days and discovered that: