Technology

Transformation of a Salesman

Sales, the lifeblood of business, is undergoing a sea change. Companies are looking for salespeople who know their customers’ business problems bet...
David RosenbaumNovember 13, 2012

Change is the new normal, so it shouldn’t come as a surprise that one of the world’s oldest professions — sales — has changed.

A survey conducted in 2009 by the Massachusetts Institute of Technology and SKK University of more than 400,000 U.S. companies showed a growth in inside sales positions (people working phones and computers) of 7.5%, while outside sales jobs (people meeting with customers in the field) grew only 0.5%.

As the economic recovery creeps in its petty pace, it makes sense, says Toffer Winslow, General Manager, Analytics Business, of business intelligence software provider Lavastorm Analytics, that the trend toward an inside sales model, with “a younger, less highly compensated, more heavily managed sales force,” will gain momentum, especially in growth-focused businesses. Inside sales is less expensive to run than outside sales, and inside sales activities (such as phone calls and e-mails) can be tracked more easily. With more tools at their fingertips, inside sales reps are quicker to respond to leads. And quicker response times lead to more sales. Just as important, conversion rates (contacts turning into names on dotted lines) are more transparent than they can be in the relatively opaque outside sales model.

“We used to hire salespeople for their experience and give them a big base salary,” says Winslow. “We measured their performance by deals closed. So given the average length of a deal cycle, we wouldn’t know anything about how the salesperson was doing for 6 to 18 months.”

Business is no longer willing to wait that long, or invest in the salesperson described by Arthur Miller in Death of a Salesman as “a man way out there in the blue, riding on a smile and a shoeshine.” With new technologies automatically serving up leads on computer screens, and automation tools such as Salesforce requiring salespeople to track everything so finance officers can monitor the progression of deals through the sales funnel to forecast revenue, businesses are looking for a new kind of salesperson who’ll fit into a new kind of sales process.

Death of the Old Salesman
Dominick DiPaolo, head of worldwide sales at BlackLine, a financial-close software vendor, was speaking with human resources about a potential hire when he suggested that the person they were considering might be too aggressive. The idea that he wouldn’t hire a salesman because he was too aggressive is, he says, “a huge change.”

Explains DiPaolo: “The most important thing for us is team performance, team success.” BlackLine, which, as an software-as-a-service (SaaS) provider, depends on recurring revenue — meaning customers that reup — doesn’t want its salespeople to subscribe to what he calls the old “kill, close, and move on” credo.

“I will stay away from old-style sales folk,” he says, referring to Miller’s individualistic and solitary breed. “We team people up because they learn from each other. It’s nice to be able to turn to a person who does the same job as you, maybe in a different territory, and ask, ‘How’s that working for you?’ When people get along, it’s good for the employees. It’s good for the business.”

The shift to inside sales is also good for the bottom line. Benjamin Nye, managing director of the software and infrastructure group at Bain Capital Ventures, says that looking across his portfolio of software companies, “there’s not one outside sales guy on the street. We run either lower-cost, inside sales selling teams or marketing, e-commerce software sales teams. But we don’t have the traditional outside direct-sales model that we had in the 1990s and 2000s.”

The number a CFO must think about — especially at a young or small business where working capital is critical — is the ratio between the cost to acquire a customer and the lifetime value of that customer. If the cost to acquire (including sales, marketing, salaries, and support) is too high, it will be difficult to get funding, let alone keep the business going.

Plus, thanks to its high overhead, outside sales, says Nye, generates a higher price for products and services, creating a “higher hurdle” for potential customers. So not only is that old-style salesman expensive to support, he drives up the price of a company’s product, making it less competitive.

Birth of the New Salesperson
The biggest change in the sales landscape, says Matt Bertuzzi, business-to-business marketing consultant for The Bridge Group, is that the “asymmetry of information” between customer and salesperson has been collapsed by the Internet. “The salesperson,” he says, “used to have all the information.” Now, the customer can see the case studies, compare prices, and find information about competing products. Consequently, says Bertuzzi, “If you can’t give me, the buyer, new insight or new ideas, you’re just adding to my workload and I don’t have time for you. You have to know more than the buyer.”

In order to do that, the salesperson has to be able to learn his customer’s business at a deeper level than simply noting how many units it bought last year.

“It’s about the customer’s needs,” says Preston Flowers, one of BlackLine’s first employees and a top-performing sales team member. “What have they already seen? What do they like?”

Before coming to BlackLine, Flowers was a salesman at tech retail giant CDW. “We had to make 100 cold calls every day,” he recalls. “The more people you called, the better chance you had of making a sale. Now, my job is about closing because, with our research, I’m getting more warm leads.”

Because the new salesperson has to use that research to understand his customer’s business, Lavastorm’s Winslow says the people he hires have to be “intellectually curious. They have to understand the product and how it solves the customer’s problem better than the competition’s.”

Finding the New Salesperson
Kevin Akeroyd, senior vice president of field operations for gamification provider Badgeville, has been hiring sales staff for 20 years. He looks for people who can excel in what he calls both the art and the science of sales. The art, he says, consists of the salesperson’s presentation skills, charisma, and likeability. “That’s important,” says Akeroyd, “but you also have to be quantitative. That’s the science. That’s discipline, process, and metrics. You have to be able to learn from success and capture it so you can repeat it.”

Akeroyd emphasizes that the new salesperson is not necessarily a youngster. “I look for people who are willing and able to learn. People who are change-averse, no matter their age or demographic, are struggling in the sales profession today,” he says. “I’ll take a 55-year-old willing to adapt and update his tools over a 20-year-old hotshot who thinks he knows it all just because he grew up in the right era.”

But that 55-year-old also needs to get into the swim. “Customers are living their lives on social media,” says Akeroyd, “so our salespeople need to meet them there.”

And it makes sense to find your new salespeople in the same place. “I’d argue that LinkedIn is the biggest recruiting tool ever,” Akeroyd says. “I can source people via social networking and screen a thousand candidates for a sales position better than I used to be able to screen 10.”

Bertuzzi suggests than even with all the technology at the salesperson’s command, technological skills are less important to a salesperson’s success than his or her ability to empathize with the prospective buyer. “I can fudge the tech,” Bertuzzi says. “I can’t fudge the buyer.”

And talent still goes a long way. “You can overdo the technology,” says Akeroyd. “There are some superhuman salespeople, rock stars, that don’t need this stuff. But if you can capture what makes Joe such a rock star, how he handles objections, the anatomy of deals he got that no one else did, you can disseminate that to the other 99%.”