Sales jobs: On the road to nowhere (unless we detour)
Tuesday, March 11, 2008/
The internet has changed selling forever. So why are your sales staff still selling in the same old way? International sales guru Tom Snyder warns AMANDA GOME that hundreds of thousands of salespeople will lose their jobs in the next five years unless the
By Amanda Gome
The internet has changed selling forever. So why are your sales staff still selling in the same old way? International sales guru Tom Snyder warns that hundreds of thousands of salespeople will lose their jobs in the next five years unless they re-invent themselves and the way they do business.
The chief executive of global sales consultancy Huthwaite, Snyder is in Australia to discuss his new book Escaping the Price Driven Sale – How World Class Sellers Create Extraordinary Profit.
He talks to Amanda Gome about how to hire a salesforce that can get through the door and close a great deal in the age of the internet.
To listen to the interview with Tom Snyder, click here. (Interview length 23 minutes.)
To download this mp3 file and listen to it later, right-click this link and “Save target as…” to your computer (Macs; option-click).
Amanda Gome: What’s happening that’s going to put these people out of work?
Tom Snyder: There are a couple of things that are going on, but the most important impact is related to the effect the internet is having on the sales profession. If you think back 10 years ago, prior to the internet becoming an important and invaluable tool inside most businesses, the only way that someone seeking to purchase a product or a service, particularly in a business-to-business frame of reference, or they could get information, was in meeting with a sales person face-to-face.
Now that the internet has become a prominent part of every office everywhere, they have access to all of the information about products and services from multiple suppliers and lots of comparative information without ever seeing a sales person. This has a number of different impacts, but most important is that the customer is now overwhelmed with information instead of starved for it, and they tend to default down to simply comparing prices unless a sales function can do something different with them.
So that’s one trend. What else is happening?
In 1988 the first version of PowerPoint was released and it began to erode the way that the sales function would conduct itself. We began to get in the sales function this business of simply showing slide after slide about the kinds of things we can do, and unfortunately that simply compounded these problems that were created in the internet – we’re providing too much information of too little value to the people we depend upon as our customer base.
The conclusion that our research came to was that if you don’t do something to provide your customers discovery, and that discovery is about their own business and about themselves – if all you’re doing is providing information particularly in an electronic format – you’re not doing much to differentiate yourself, and the customer will ultimately default to who’s cheapest as their only decision criteria.
That’s particularly dangerous for smaller businesses because they get their edge on being able to sell, being different, being able to provide those insights. So are smaller businesses in real danger with the advent of the internet?
The main asset of most small businesses comes in two forms. It comes in both their ability to innovate and their ability to react quickly, but those things are not necessarily related to just the product they sell or the service they represent.
It’s about the way they interact with their customer, and if you allow yourself as a small business to have only one means of providing value, and that is just a one-way talk on your website, you can find yourself being in very tough situation. If you’re selling a particular product or a particular service that isn’t information-related, then you can find yourself limiting the very value you can provide by being small.
I would imagine that this is only going to get worse as the Gen-Ys, or the more technological adept people, come through who can use the internet far better.
If you think about it now today, there is a whole generation of people coming up that now access the internet off their mobile phone. This is shrinking the amount of information you can stream to them and making the presentations more and more scannable and less and less content heavy.
At the same time this generation has become more and more used to using electronics as their only means of interaction, which means if you don’t do something very different around the way you interact with them as a sales function then particularly in small business you’re going to find yourself quickly commoditised and quickly appearing to disappear in terms of the differentiators you present to the marketplace.
What are the ways you can stand out?
I think the most important thing is to understand, as a small business in particular, what are the advantages you offer to your customer. What are the benefits you offer to your customer by virtue of being small. And you first need to put yourself through a rigorous analysis that says ‘what can I do as a small business or a medium sized business that larger competitors can’t do? What are some of the innovations I bring to the marketplace that my competitors can’t provide?’. And the key is to thinking those through in terms of the outcome the customer enjoys, not just the feature you present.
Can you give us an example?
Let’s say you were a small insurance brokerage and you are representing a broad line of insurance companies. Rather than simply putting up the characteristics of each carrier and the characteristics of each of the prices involved, if you could characterise it instead of ‘here are some outcomes in terms of risk management; here are some outcomes in terms of safety impact; here are some outcomes in terms of safety impact; and here are some outcomes in terms of the net savings that you can get in your own P&L statement from the kinds of services associated with insurance’… then you stand out. If you simply list off ‘here are the carriers we represent and here are the features of their policies’, that information is of no value to the client.
Most people don’t realise that, for example, safety programs actually have a huge impact on the customer satisfaction; that is customers of the business that runs in a safe way. It doesn’t seem like those things are even connected, yet research will say those companies that operate safely also have very high levels of satisfaction among their own customers. So if I’m operating in a business of insurance, for example, I don’t want to just sell a safety program. I want to make the connections, and we have a client that’s done just this. Make the connections for their clients around the other benefits that come associated with employee safety programs.
So you’re almost walking the talk in a way.
Exactly. You’re showing them that it’s not about what you’re buying, it’s about the outcomes you’re getting – and that’s the big change in sales. Don’t talk about what you’re selling them, present it to the outcomes they will enjoy. The solutions that they’ll have. The benefits they get. Not just what you’re selling them.
Does that mean the old fashioned sales person who walks in and pumps the hand and has lunch and goes ‘mate, mate, and we’ve got a deal’. Are they gone?
They’re disappearing very quickly. In the last five years two-and-a-half million jobs of those kinds of sellers have disappeared between Europe and the
Are you still seeing them here?
To a certain extent. I think the Australian market is essentially very very similar to the
What do you look for then when you hire, because sales people are very good at selling themselves. The professionals that do that can be the most likeable, and you would like to give them a job.
We have a tradition in selling don’t we… about hiring personality. I don’t think personality is a bad thing to look for, but the most important skill set is a natural inquisitiveness. A genuine sense of wanting to understand before you’re wanting to be understood, and that is not the way the traditional salesperson has been viewed. The person who’s identified as ‘born to sell’ tends to be a gregarious and outgoing person who also happens to be blessed with verbal acuity, but that’s not really the key skill set anymore. It’s a natural sense of empathy and a desire to understand; those were the two keys that I would look for first.
How do you look for those?
You’re actually going to interview that person around whether or not their experience in selling has been about the things they’ve enjoyed most. Was it making a big sale, or the things they’ve enjoyed most were helping customers succeed. So I’d ask questions about ‘tell me about your most rewarding sales experience? Tell me about the ones where you had a great customer relationship. Tell me about…?’ and what I’d be listening for is do they talk about their understanding of the customer’s business, do they talk about their desire to see the customer succeed or do they talk about the size of their sale and the size of their commission and the amount of revenue they generated for themselves.
How do you reward these sales people if you’re trying to get a different outcome to that focus on the commission?
There’s two things I’d commission them on, in addition to revenue. I wouldn’t just give them pure revenue commission. I would give them commission which is based partially on three different things. Profit, revenue and customer satisfaction.
How do you measure customer satisfaction?
The most effective way that I have seen is around something called the net promoter value. Reicheld (Reicheld & Sasser, Harvard Business Review), who did some of this groundbreaking research, says there’s really only one question that matters in business. That question is would you recommend my company to another company, and you ask that on a 10 point scale and all the companies who answer nines and 10s are called promoters. People six and below are called detractors, and the sevens and eights are neutrals, and what you’re looking for is rewarding the sales person based on the number of nines and 10s they get from their client relationships.
But wouldn’t they also argue it wasn’t just them, it was the company or the product that they are selling?
Actually I would argue back against that. You’ve got to have a great company and a great product and terrific service these days just to be able to get into the competition. There are too many companies doing too good a job in every market for you to rely just on customer service and good products to win. What you need to do now is use that as the starting point, but it really is the value of the sales function that makes the difference.
Give us a little script when you would actually cold call for. Say you’re selling, I don’t know, choose a product, how would you open a telephone conversation?
Most people today are impossible to reach because they’ve got a whole army of things standing between themselves and having to answer that phone, so you’re likely to get voicemail aren’t you. The tendency of most of us is to leave what I would describe as a verbal resume. We talk about ourselves, we talk about our company and we talk about the reasons to call us back. Our research would say that fails. At least 88% of the time, the customer absolutely is uninterested and doesn’t even listen to the whole message. The key to great prospecting is to pose a question in your prospecting message that you know the answer to and you suspect the customer does not.
Think about it this way. If I were to call up… let’s take the business that I’m in. I’m a consultant and I’m a consultant around sales performance. I could call up and I could leave a message that says ‘Amanda my name is Tom Snyder. For the past 33 years I’ve been in the business doing research about what separates the excellent from the average. We have a great understanding here at Huthwaite of how to turn good sales people out. We’d love to talk to you.’ When did you hang up? You hung up at Snyder, right? You didn’t even listen to that message.
Now imagine if instead I left a message that says ‘Amanda, this is Tom Snyder with Huthwaite. One of the things that we’ve noticed in the marketplace is that companies are frustrated with how to measure the effectiveness of their sales people. I was wondering if that’s an issue with your company.’
Boom, just leave it. And then resist the temptation to answer your own question. Just leave the question in the message. You will at the very least be memorable, and our research says that you will get four times as many responses as you would from the previous message.
What if you’re knocking on the door?
Same idea. Here what you would want to do is of course the niceties, but as quickly as possible get to posing questions and make sure those questions are of more value to the answerer than to you. So again pose those questions that you know an answer to, that you suspect from experience they would struggle to answer.
You’ll know you’ve been successful if they come back to you with a question. That you pose the question and they say ‘I don’t know. What are you driving at? What do you know?’ That kind of thing.
What about closing; how is closing a deal changing?
We used to have in the field of sales this idea that there are closing techniques and there is all kinds of stuff that was written, principally back in the 70s and 80s, about closing techniques. Closing techniques, if you actually study the research the way we have, with field research, actually don’t work. In fact they usually anger the client unless the client is ready to buy anyway.
What you need to do is realise that the purpose of sales is creating an atmosphere in which the customer chooses to buy. Therefore if you continue to focus on their needs and understanding how your capabilities map to their needs; you’ll find more sales closed than by the use of any particular closing technique.
One of the things we teach people is the difference between the kind of need that a client is going to act on and the kind of need they’re not. Being able to discern that difference is important in knowing where you are in the sale. You will often hear a client say ‘well that’s interesting’, or ‘well that’s a bit of a problem’ and our tendency is to think that they’re telling us they’re going to buy something. They’re not. That’s the kind of need they’re not going to act on.
On the other hand an expression that says ‘we have a problem here at our company we need to solve right now’; they’re saying they’re actually going to purchase. In the former, to tell them about all the things we have to offer is to move that sale backwards. In the latter, we’re actually making that sale move forward.
What are the new trends you’re seeing in the States?
A lot of companies these days are investing in customer relationship management systems. Things like Salesforce.com and its competitors. The trick you have to be careful of with these brilliant pieces of software is that you have to make a fundamental change in behaviour in the sellers. Otherwise all the promises of that technology will not come to pass, and there are a lot of companies these days that are spending a lot of money and being very frustrated with the outcomes they’re getting.
Because people aren’t filling it in properly or haven’t learnt it?
The most glaring problem is that the value of those systems depends upon the people loading in the information. The people loading in the information are sales people and if they don’t see some value in it for themselves, forget how valuable it is to the company. They’re not going to do it.
How valuable is it to a company?
Well if it’s done right it’s invaluable, because it understands your customer base very precisely. The problem is if you don’t make it a behaviour change initiative with your sales people, the data will be corrupted and you’ll be fooled by what you see, because it actually won’t be an accurate representation.
A large portion of the sales people won’t enter the correct data. They either won’t do it at all, or they will do it in a way that gets the boss off their back, but they won’t be careful to make it accurate information.
So how do you make them do it?
What you need to do is start by defining how they’re going to be better off by virtue of using the tool. Most of those tools are designed to be useful to managers and they’re not useful, in the way we implement them, to be helpful to the individual sales person. You have to specifically identify how you’re going to put that sales person in a place where they can make more money, have greater job satisfaction, have greater effectiveness.
Other new technology people are using to sell?
There are a number of technologies out there that allow you to load voice and video on to email. There are technologies out there that allow you to do podcasts of certain sales demonstrations, that kind of thing. So there’s a lot of electronic stuff, but it all comes back to are you talking about the customer or are you talking about yourself.
So those things can all be quite effective?
Very much so if we do them in the right way.
Webinars are great, particularly because it allows you to reach a very large number of prospective customers in a very compacted piece of time. Again the key is to make sure it’s about customers and solutions and problems, not about the products and the features.
Can you tell us a story about a fantastic sales person who beat the odds, that wowed you?
One of my favourites is we had a seller come to us who was involved in a world where every decision seemed to be made by their customers based on price, and his average discount rate was running at 50% below list price. We showed him a few things about how this value message can be created, and he tripled his income in six months and increased the sales of his particular division by almost quadrupling his quota. Just in turning the message he was using from being about himself and his company to being about the customer.
There’s a real shortage of sales people here. I suspect a lot of people are putting up with these older style sales people. What can we do, if we can’t get the people?
First of all, the people you have can be trained to be quite good. It’s just getting them to be aware of the fact that excellence in selling is one of these things that gets redefined about every five years because the customers change. So if we keep doing what we did five or 10 years ago, we’re moving backwards.
We can train these people to do the right thing, and actually there are lots of people who are capable of being great sellers and don’t even know it, because all they have to be able to do is understand that it’s an investigative skill that matters. It’s not standing up and showing PowerPoint slides.
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