Thursday, September 24, 2009

Comparing Sales 1.0 to Sales 2.0

Traditional sales channel development has been based around the company hiring a Sales Pro to set up the company’s sales team. The typical structure for a manufacturing company would be to have a VP of Sales, then Regional Sales Managers, and then either direct or independent sales agents selling products in a defined territory. There usually is a Marketing Manager who would place advertisements and set up trade shows. These advertisements would generate leads into the company which the sales team followed up. This concept seems to have worked for a long time, but its effectiveness has dropped off dramatically in the last few years.

Some of the trends that I will be talking about in this article have dramatically changed the focus of the selling process. Companies that are able to adapt to the change will survive. The companies that can not adapt will perish. I call this concept “Seth’s Theory of Business Evolution”. Just as Darwin postulated that Natural Selection caused animals to adapt to their environment or perish, business must also adapt to changes in the business environment or perish.

One of the problems with the old sales model, is the disconnect between a customer seeing your marketing message in a print advertisement, and the sales person making a face-to -face presentation. During the 1980’s the company I worked for would run advertisements in magazines showing their latest Servo Motors and Controls. When a potential customer, Bob the Engineer, saw the ad, he would circle a Bingo card and mail it back to the magazine publisher. At the end of the month, the publisher would compile a mailing list of all the people that were interested in my company’s motors, and mail them to us. We would take that list and type up letters to add to a printed catalogue, which was mailed out to the prospect. At the end of the second month we would send a pile of papers to independent sales reps across the country, with the names of the people who received the catalogues. When the sales reps actually called to follow up on the literature request, most often Bob the Engineer, who originally requested the information, had forgotten why he requested it! This system had a two to three month time delay between initial inquiry and the follow up by a local sales agent with a customer.

As time progressed the concept of mailing out printed literature in response to a request had been replaced with the Internet. It has become the Infinitely Big Catalog of Everything. Unfortunately there are a lot of companies that still have sales teams and management concepts that are based on the old outdated Sales 1.0 model.

New! Improved Sales 2.0! With extra power!

Let’s think about Bob the Engineer again, but now he is interacting with a company that is using the Sales 2.0 business model. Bob has a problem he needs to solve for his company who manufactures gears. He needs to increase the rate of his gear deburring, while lowering his cost per part. Let’s break down the sales process into a series of steps, that are focused on Bob the Engineer’s problem. I have included references to my prior Blog entries to highlight prior discussions.

1. Bob gets called into his boss Mr. Spacely’s office. The boss wants to reduce the cost of each gear and asks Bob for ideas.
2. Bob returns to his office, sites in front of his trusted computer, and types some keywords into Google: Gear, Deburring, Automation, Increase Production, Reduce Cost. Notice that Bob’s keywords describe his problem and are not the buzz words most manufacturers think of. This is the SEO, and Keyword Selection which I wrote about in a prior Blog.
3. Google then searches its index of web sites which have these keywords and comes up with some recommendations. At the top of the list are some highlighted listings. These are really paid advertisements using the Pay per Click technique I outlined in a prior Blog.
4. Bob sees a listing for a Robotic Deburring Cell and clicks on the link. It is really a very cleverly placed Pay per Click advertisement. Good job with that Google Ad placement!
5. Bob’s Firefox web browser opens up a new tab showing George Jetson’s Robotic Deburring Cells. He looks over the different sized cells and thinks the larger model, Rosie, will meet his goal of reducing costs and increasing throughput.
6. Bob clicks a contact request box at the bottom of the Rosie Robotic Work Cell page, fills in his contact information, and presses the enter key. This relates to discussions on Web Site Design in a few of my Blogs.
7. Immediately George Jetson receives an email with Bob the Engineer’s contact information. George also has set up a link which imports the data from his web site into his Sales Force Automation System.
8. Dominic the Rep, George Jetson’s best sales agent, who also happens to be in the same city as Bob the Engineer, logs into his web based Sales Force Automation system four times per day. When he logs in, he sees that there is a new inquiry for the Rosie Robotic Work Cell from a Mr. Bob the Engineer. Dominic calls Bob right away to set up a face to face meeting, and visits Bob later that day.
9. Dominic reviews Bob’s needs and goals, and then confirms that Rosie Robotic Work Cell will solve Bob’s problems. Bob and Dominic present Rosie to Bob’s boss, Mr. Spacely.
10. Mr. Spacely likes Bob the Engineer’s idea to use the Rosie Robotic Work Cell and is so impressed with Dominic’s presentation, that he approves the capitol expenditure while Dominic is in his office. The sale is made, and the order is booked using Dominic’s laptop on the spot!
11. Everyone goes home happy at how much that have accomplished that day.

Reviewing this story, we have seen how our efforts using Search Engine Optimization techniques, Web site design with customer data collection, and the integration of a Sales Force Automation system have dramatically shortened the sales cycle. Compare the immediate solution to Mr. Spacely’s problem and Dominic’s presentation that same day to the Sales 1.0 Company. These techniques have also boosted the perception by the customer and his boss about our Robotic Company. We have also improved the perception of our company by our sales agent Dominic. He happily follows up every inquiry he receives from George Jetson’s Robotic Company, because he knows that they are all hot leads. The sales leads he receives are from his other principals, who still are following the outdated Sales 1.0 business model, and are usually 2 to 3 months old by the time he receives them. Even with all of Dominic’s efforts, the Sales 1.0 Company has a low closure rate and often complains about how bad the economy is. The typical Sales 1.0 Company response is to cut their advertising budget to save money for their company, rather than look at ways to improve their operation, shorten response times, and close more sales.

I hope that this story has given you some ideas of how Sales 2.0 techniques can provide your company with measurable improvements in the sales process which will lead to increased sales of your products.

Sales Management Consulting is available to partner with you to grow your sales. Please call or email.

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