Virtual Selling: Going Beyond the Automated Sales Force to Achieve Total Sales Quality - Softcover

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Michael Malone is an author and television writer.

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Chapter 1

Finding the Path

In slower times, achieving results was simpler. For leading organizations, outperforming competitors demanded little more than business as usual. Not so any more because intense competition is rendering historic success formulas obsolete. To continue achieving results in the future, organizations will need to compete in new ways, with new skills to satisfy ever-changing customer demands.

Andersen Consulting

Outlook 1994

In the last few years, companies have taken such warnings to heart.

They have been told they must flatten their organizations, re-engineer their processes, form "virtual" alliances with suppliers, distributors, and customers, and most of all, take advantage of the productivity leaps made possible by the rapid advances in information and communications technologies. The most successful firms in the United States, Japan, and Europe have done just that; one by one, their key operations -- their "basic building blocks" -- have been transformed.

Over the last two decades, accounting and finance, manufacturing, research and development, human resources, and customer support have all been transformed by technology. They have been automated, streamlined, been made more flexible, responsive, and adaptive. Ultimately, their success has resulted in reduced costs, increased productivity, and greater customer satisfaction.

We are now at the last great unautomated corporate frontier: sales.

The image is a resonant one. Sales is the untamed frontier of the business world: unpredictable, passionate, theatrical, full of eccentric characters, and dangerous to the newcomer. Like the frontier, the destiny of sales is to be explored, settled, and tamed by people using the right tools and technology. But many also will perish on this frontier, because they are unprepared, unnecessarily exposed to the elements, and annihilated by quick-footed and aggressive foes. The real question is: how many bones will lie bleaching in the desert or buried on Boot Hill before the new era finally arrives? And will you be one of those victims?

Sales force automation is rapidly rising to the forefront of the business computing market. According toPersonal Selling Power magazine, "...whether managers realize it or not, automation has become an operating cost in the sales budget" -- a cost which may rise as high as $12,000 per salesperson. Right now, as this book goes to press, as many as 500 companies are rushing into the market offering information technology tools for sales. Their target is the 9 million salespeople in the United States, and perhaps four times more in the rest of the industrialized world. The sales automation software market was estimated to be $700 million in 1995 and is expected to reach as high as $10 billion by the turn of the century. That makes it the fastest growing market segment in the computer software business.

Already, at least 2.5 million corporate salespeople have been affected in some way by automation or information sales tools. In 1993, whenComputerworld surveyed the information services departments of its largest corporate readers, 58 percent said that the user department receiving most of their attention was sales and marketing -- compared to just 3 percent that named either research and development or corporate administration.

Two of the largest system-integration companies in the world, Andersen Consulting and KPMG Peat Marwick, have now set up focused business practices deployed solely to deliver comprehensive turnkey Sales Force Automation solutions on a global basis to their large corporate customers. According to Phillip Tamminga, director of the Sales Effectiveness practice at Andersen Consulting, "We formed this practice in direct response to market forces. Quite simply, our largest customers are increasingly demanding a focused, highly specialized response to their growing sales automation requirements. We have rarely seen such dramatic growth in market demand."

Clearly we are seeing an extraordinary market shift. In the 1970s and early 1980s companies dabbled occasionally in this area to save on costs. By the end of the 1980s companies began to deploy early sales automation tools in an attempt to increase profitability and obtain strategic competitive advantage. Now the race to automate sales has taken on a life of its own. Companies are today treating the investment of millions of dollars on sales automation tools as if it is a matter of survival.

Why the rush to re-engineer sales?

* Complexity: It is getting more and more difficult to make a sale. One reason is that products themselves are getting more complicated. Thanks to programmability, manufacturing and design automation, and new delivery systems, many items that used to come in a couple of models and with a handful of options may now be available in thousands of permutations. In some cutting-edge industries, such as gate array circuits, even the traditional notion of "model" has disappeared, to be replaced by a set of capabilities. Clearly the days when a salesperson could carry the company catalog around in his or her head are rapidly disappearing. Instead, salespeople will now be designing products on the spot. But that can only happen if they are both trained to do that and supplied with constantly updated information on those capabilities.

That's only half of the challenge. Customers too are changing. With products becoming so complex, it is often the customers themselves who best know what they want.., and more and more have a greater understanding of their supplier's offerings than their supplier's own sales force. Faced with such an "information affluent" customer, a salesperson must have the relevant information at hand just to keep from impeding the sales process, much less drive it. Better yet, that salesperson needs the tools to enlist the customer in the product design and order process.

These two forces, product indeterminacy and customer sophistication, combine to create a radically new sales environment, one that is alien to traditional sales. As The Conference Board recently wrote:

The salesperson is increasingly the "point person" who presents to the customer the combined efforts of separate company function: product development and design; advertising, merchandising and promotion; R&D and manufacturing, etc. In some instances, this is done by building customer relationships, acting as a consultant, and even co-producing the product with the customer...Contact is continuous, not only at the time of the sale, but before that, in design assistance and cooperation, and later, through service and follow-through.

Needless to say, there are few sales departments today capable of such a balancing act.

* Re-engineering: One of the most obvious characteristics of the new corporation is the increasingly flat organizational structure. Many of the layers of middle management, whose historical role was to condense raw information flowing upward to top management and to elaborate on instructions flowing downward to line employees, have been stripped away. Replacing this hierarchy of managers are information networks, which automatically download new information to salespeople or present summaries to them the next time they log on to the automated information system. In practice such reorganization also means greatly expanded spans of control and increased responsibilities placed upon those managers who remain.

Sales, as one of the most traditionally-organized corporate operations, is a target ripe for restructuring. But therein lies a dilemma: every minute spent by a salesperson on administrative tasks once...