Should You Fire Your Sales Force?

Ok, maybe firing the entire sales force is a little radical. But wait…put yourself in the shoes of a product exec trying to grow her business unit within a mid- to large-size enterprise. Here is what many, many executives are experiencing in the digital transformation of the four Ps — product, price, promotion, place:

Digital Transformation’s Changing 4P’s

Traditional Product

Digitally Transformed Product

Product

Physical product or service (bare metal servers, professional services)Cloud Service (e.g. on-line storage, streaming media, SaaS)

Price

One-time purchaseOn-going subscription, either by usage or PEPM (per employee, per month)

Promotion

Direct marketing, product spec sheetsContent marketing, online demos, trials/freemiums

Place (channel)

Field sales, inside sales, local channel partnersTraditional channels plus ecommerce with instant delivery, employee-in approaches, remote specialists, and new or completely transformed channels

Clearly, he or she sees value in their company’s legacy sales force; they have relationships with strategic buyers, existing purchase agreements, and plenty of arcane knowledge about the existing product base. But as new products are introduced or mature products upgraded—and today that means digital product enhancements—it can often be a challenge to get traditional sales channels to sell new or upgraded digitally transformed products and services.

Why? Well, most sales reps (and we have ALL been there) seek the fastest, easiest path to make their quota. Typically that means selling a) the products they know, b) to the buyers they know, c) based on traditional product pricing and compensation models. But as more companies go through digital transformations that change both product form (e.g. from a physical device to a cloud service) and pricing model (e.g. one-time purchase to subscription), new/next gen products become a real challenge for legacy sales channels.

Consider this story: In 2017 the #2 executive in a Fortune 1000 company was being presented a critical new product launch plan. The new product added significant digital features and capabilities to a traditional, on-premise physical product. This product launch was BIG. Wall Street was watching. The company had an installed base of over 500,000 B2B customers, but new, startup competitors were offering totally cloud-based SaaS platforms. It was now or never. As the launch team reviewed the results from a 3-month sales pilot against the skills of a 100-person legacy inside sales team, the senior exec stated out loud, “I don’t think this channel can sell this new product.” She quickly decided on two actions: 1) over the next 12 months, replace as many as 70% of the sales team, and 2) rapidly pursue additional 3rd partner channel partners with the required skills and buyer relationships.

The pitfall is that execs too often rely solely on “upskilling” traditional sales channels (e.g. new product training, sales enablement tools, and re-jiggered comp plans) to incent new product launches. That is necessary and can partially work, but with our clients we are learning that very often “you just can’t change the stripes on a zebra!”

So as your digital transformation efforts turn to a practical Go-To-Market strategy, you may need to create entirely new channels and/or skill sets to be successful. Here are five questions to ask:

  1. How do customers want to buy?
    It’s no secret…buyers actually prefer less frequent but more value-added engagement from sales reps. Blanketed by emails and inbound telesales calls, buyers just don’t have the time to schedule meetings and listen to pitches. Prospects are self-guiding their purchase process through digital research, social media, and analyst/peer reviews. They are going to reduce their vendor consideration set very quickly to those players who meet their preferred buying motion. Advice: “Staple yourself” to a few customers’ buying processes and see how they make decisions.
  2. Do traditional channels have the right skills and incentives to compete? Increasingly it’s a value vs. volume game….sales channels need to be experts, not just dial-and-smile professionals. By the way, this is what the next gen sales professionals wants; to become experts and make money based on their product knowledge. Advice: Find the sales reps who are intellectually curious about the product they are selling. They may not be writing code, but they are “citizen engineers” who know their industry, product and the precise ways it solves buyer problems.
  3. What are the affordable cost-to-sell economics?
    Candidly, physical geographic territories to “farm” are steadily becoming obsolete. Face-to-face prospect meetings are important but very expensive. Complicating the process are new subscription pricing dynamics where the cost-to-sell (e.g pay the channel) has to be amortized over multiple years. Advice: Sharpen your pencils and do the math.
  4. Do you have the necessary customer data to target the right prospects?
    Human prospecting is tedious and expensive. But there is so much great predictive customer data available—online activity, past purchase history, product usage (e.g. IoT), customer service logs—that solid analytics can send direct sales channels to the highest propensity buyers.
  5. Do you have the right digital content to accelerate the sales process?
    As prospects advance from a qualified opportunity to close, they want more content (case studies, testimonials, videos, online demos, etc). And, candidly, they want less overt “have I got a deal for you” selling.

Final thought: just remember that buying more software and technology to “automate channels” is not the answer. Your existing marketing automation, CRM, and website platforms have plenty of technology firepower. Don’t forget “channels don’t choose customers; customers choose channels.” Digital transformation requires building the right channels to fit your product portfolio.

Read my prior blog on redefining customer-centric go-to-market strategy.