Bye, Bye Sales Force
Gary Brighten, a GM engineer, logs on the Williams Controls website and goes to the GM-secure area. He clicks to the file he’s been working on all week, a CAD program that lets him design the farm equipment part he needs. He finishes the design and sends the program over to the sales department after filling out the online purchasing order. In six weeks, 278 GM farm equipment dealerships will receive a supply of the part. He didn’t visit with one sales rep. He didn’t fax over a paper purchase order. He never talked to a human being. It didn’t even take a sales rep to get him to participate online. Brighten’s boss talked Williams into offering the service.
So tell me, who the heck needs a sales force?
When the dealerships need to reorder the part Brighten designed, they’re not going to call their sales rep. They’ll log on to the site and click the part into an online shopping cart. In a few days they’ll receive the part, an invoice and a copy of their online purchase order. Yet Williams insists its regional reps will receive a commission on the sale. These vendors are quick to insist they intend to pay commissions for online orders. They say they need sales reps out there meeting customers face-to-face. It’s striking how adamant they are about supporting a sales force with a diminishing role in sales.
My guess is the loyalty to the sales team is just a corporate habit. The writing is on the wall. American corporations are becoming more productive, which helps to drive our bull economy, giving us growth without inflation. That productivity comes more and more from the savings corporations take by purchasing and delivering services online. The reduction of sales commissions will be a major contribution to productivity when corporations get up the nerve to make some real changes.
And there’s more to the picture. One of the weak areas of Internet commerce is customer service. In the retail sector it can be deadly. As companies move their business online, the customer service function usually falls behind. As the company adds more customer service support, the Internet business expands, leaving a customer service gap that widens even as the company adds personnel. Hmm. They keep the sales team on even though they are not as critical to the sales process because they want customer contact. Meanwhile, they fall behind in customer relations where the contact is crucial.
You can see what’s coming down the road. In the future, corporations will trim down their sales teams. We’ll see sophisticated customer service groups staffed by highly trained salaried professionals. The customer service pros will work closely with clients, ensuring smooth communications. Corporations will lend some of these pros to the production teams of their major clients to get involved in product development. In time, it will be hard to tell where the client stops and the vendor begins.
This won’t happen because some CEO decides it’s the best way to serve the market. It will happen because some young-minded, nimble corporation will begin offering extreme customer service in place of sales reps and the clients will respond by moving their business. The corporate sales force is a deeply ingrained part of corporate culture. It won’t be jettisoned until it becomes a glaring liability that renders the corporation less competitive. Then it will go handily into the trash can of corporate history.
These structural changes will become common in the early years of the 21st century. There will be books about the new corporation with its intense client contact and highly educated customer service teams. When graduates come out of the engineering schools, one of their options will be a customer service position that will allow them with work with the engineering groups of their employer’s customers. This will become a coveted position because of the nomad ability to work with a number of organizations.
Rob Spiegel is the author of Net Strategy (Dearborn) and The Shoestring Entrepreneurs Guide to Internet Start-ups (St. Martin’s Press). You can reach Rob at firstname.lastname@example.org.