Saturday, January 16, 2010

What is the Value Proposition of a Salesperson?

It's not a revelation that the web has affected the way business is conducted. So it shouldn't be a revelation that the sales profession is perhaps one of the most impacted. In light of this transformation, the question is: Has the perception of value, to an organization, of a sales person (SP) changed? And if so, what is this value?

What is, then, the role and contribution of a SP in the post-Google /YouTube era? Why and under what conditions would companies rely on sales people rather than on on-line sales or on any other sales channel? And, an equally important question is, what skills must a sales person now have in order to deliver high value to companies that employ them?

To the cynic, like me, the answer would be simple: sales and marketing costs should be managed to under 20% of revenues. So, as long as cost of the sales person lies within that parameter, there is value. Ha!.

Complex vs. Simplex:
I recently posted this question as a discussion to the Sales Best Practices Group on LinkedIn. In order of appearance, the majority of the responders agreed that the Value Proposition depended on the market and or on the complexity of the sales process. The more complex the product, the more valuable that the SP is in securing a sale. This is my view as well. I've worked for companies selling complex software solutions for the last 12 years and indeed, the role, and the value of a sales person shows up in the execution of the sales process: Qualifying, Identifying Requirements, Developing The Solution, Marketing The Solution, Negotiating, and Closing The Business.

At the other extreme of complex product sales is the sale of consumer products. These, for the purposes of common understanding, are the products that are the same, or almost the same, for all or most of users. Razors, shampoo, toothpaste and even Microsoft Excel, are examples of products that deliver the same functionality/benefits to all customers. There are no direct sales persons selling razors, although there is a lot of "marketing". The success of selling these types of products seems to hinge on the ability to differentiate from competitive alternatives, on delivering higher value (ratio of benefit to lower price) or even on conveying the message that if someone who is prominent or famous uses the product, then its OK for the rest of us to use the same product: Wheaties and Tiger Woods! (OK, bad example); Nutrisystem and Dan Marino; and many others.
The success of making the sale, in these instances, lies on "capturing the mind of the consumer" or in successful positioning of the product. Examples abound:
Apple: the computer for the rest of us!
Nyquil: the only nightime cold medicine so you can really sleep (hey, they all make you sleepy!)
AVIS: we try harder
Campbell's Soup: mmm-mmm goood!
etcetera, etcetera, etcetera!!

I argue that in this case the SP's value proposition is the positioning statement itself and that the SP is the "marketing" department or creative genius who articulated the positioning statement.

The value of relationship
Well over half of the respondents said that relationship, communications skills and product knowledge were, in some combination or other, the Value Proposition of the SP. Not just for the modern SP but at all times.
I personally believe that the value of relationship is misunderstood, specially if the foundations of the relationship are ill defined. I must say though, that throughout my over twenty years selling complex technological solutions, I've found that, all other things being equal, the relationship (based on trust) I had with my customers afforded me the opportunity to be considered as a potential bidder and not really to have an unfair advantage over my competitors. My company, my company's product, my sales team and I still had to win the business by demonstrating superior value over other options for the buyer. We had to establish and demonstrate trust during the selling process.
I feel the need to define and explore and reframe the true value of a seller-buyer relationship in more depth. I promise it will be the subject of a future blog!

Consider that buyers/customers choose from whom they buy and how they buy. Most car buyers dread the car buying experience. Why? Traditionally car buying is a contentious and aggravating process. Innovative and progressive car dealerships have modified their sales process to eliminate the unpleasantness of the car buying experience. In fact, they have strived to enhance the car buying experience for the customer.
Ways in which this has been done range from fixed price - no haggling, to posting the car information on the web and even providing a quote on-line. My girlfriend recently negotiated a car purchase over the phone without meeting the SP nor visiting the dealership until she was close to making a purchasing decision: one visit to test drive the car and one to pick it up. I must say that experienced was preceded by a series of dreadful negotiations with another dealer that relied on the old and tried tactics. A dealer that did not get the sale.
The point being that even purchasing a car, most people's second largest purchase and truly a complex product, can be accomplished with minimal intervention from a direct sales person and still with extraordinary results.
In this case, the SP did not have a prior relationship with the buyer, did not generate interest nor did it find the lead by himself (the SP was responding to my girlfriends web based inquiry). The SP did have to demonstrate product knowledge. The clear communications of the commercial terms of the offer was delegated to the finance manager so the SP did not have to negotiate the offer. In spite of his, supposedly limited participation, the SP delivered value to the organization: he closed the deal.

The modern SP
Need I say that the role of the SP under this environment is totally different than that of a car sales person ten years ago, or even three years ago? Need I say that the value proposition of the SP is still to deliver the sale but not in competition with new technologies but in collaboration with them?

The Value Proposition
The conditions under which this happens have dramatically changed in many industries and, in order for the sales person to continue to perform effectively he or she must learn and adapt to take full advantage of the value of these technologies.
In the end, whether selling a complex product (cars, homes, system software) or a simple consumer product, the Value Proposition of the contemporary, post-Web2.0, Twittered, Facebooked SP is and remains the same: to deliver the sale.

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