Here's how shopping has dramatically shifted and what you can do about it.
I started my sales career in 1990 at Parametric Technology Corporation as the secretary to the vice president of sales. At the time, the company had $3 million in revenue. Ten years later, I was a senior vice president of sales and the company had $1 billion in revenue. I had a very nice run and learned a ton about selling and the sales process. What's remarkable to me is how radically different that sales process needs to be today.
There has been a sea change in the way people shop for things and the way they buy things. So there also needs to be a sea change in the way you sell things. I call this new method "inbound selling."
Here I explain how sales has changed, and how you can now use "inbound selling" to do something about it:
The Sales Prospect Now Has All the Power
As a sales rep in the '90s, relative to the prospect, I had all of the leverage in the sales process. If the prospect wanted a reference, she came through me to get one. If the prospect wanted to figure out our pricing model, she came through me. If the prospect wanted to talk to Parametric's founder, she came through me. I did my best to extract a pound of flesh from the prospect in exchange for each of these requests, and took full advantage of the information asymmetry.
In 2013, that leverage in the sales process has completely shifted from the sales rep to the prospect. If a prospect wants a reference, pricing information, or a conversation with your founder, she is just a few mouse clicks or tweets away.
What you can do about it: A lot of companies still pretend like it is the 1990s and try to hide information form prospective customers in hopes that the hidden information will force the prospect to "contact sales." This might work once in a while, but the reality is that when you hide basic stuff, like your pricing model, you are going to irritate rational buyers who'd much rather just read about it than have to have a 30-minute qualifying call to talk about it with a rep and his boss. My advice is to lean into this power shift and make it much easier for the prospect to find what he needs.
A Sales Rep Gets Involved Later in the Process Than Ever Before
As a sales rep in the '90s, I interacted with a prospect from the very beginning of the purchase decision process to the very end. In 2013, the sales rep gets involved much later in that process. I've seen a bunch of studies about this and they all say that the prospect does about 50 percent to 70 percent of his own research and self-convincing online before hitting the "contact sales" button.
What you can do about it: Embrace the fact that the prospect is getting involved and don't fight it. Give your reps the tools they need so that when the conversation with the prospect finally does happen the rep has the appropriate level of context and hits the nail on the head quickly.
Revenue Is Recognized Later
As a sales rep in the '90s, I sold something with a big upfront price tag and a small tail of revenue later, as did most sales reps in most industries. In 2013, almost everyone sells every kind of product as a service with a revenue stream that happens over time. Now profit does not occur on a customer unit basis for many months, or even years.
What you can do about it: Fewer and fewer people are willing to give you a big upfront slug of cash for whatever you are selling, so you need to just give in to this fact, and let them buy it in a way that they pay for it over time. This is going to hurt your cash flow, but you don't have a choice in this day and age. If you don't do it, someone else will, and she'll eat your lunch.
Sellers Now Have to Beware
As a sales rep in the '90s, I lived in a buyer beware world. The onus was on the buyer to make the right decision. If she made the wrong one or wasn't served well, her recourse was to tell a few colleagues and her spouse. In 2013, you're in a seller-beware world. If the buyer is unhappy with the product or wasn't served well, her recourse is to write a scathing blog article about your product, tweet about it, and post about it on Facebook--all of which your next prospect can easily find with a Google search.
What you can do about it: Adjust your sales commission plans to reward for long-term customer success, not just upfront cash payment. Part of the commission payments should account for length of time on contract, voluntary contract renewal, churn rate, and the loyalty metric net promoter score.
Cold Calling Is Much Harder
As a sales rep in the '90s, I started almost every sales process with a cold call. In fact, at Parametric, Tuesday was cold call day. Everyone stayed in the office, pounded the phones, and set up meetings for the rest of the week. One of the key qualities in a sales rep back then was that he had to be very aggressive on the phone and have a very thick skin. In 2013, cold calls are significantly harder to make. Everyone has caller ID, very few people have a land line--and, let's be honest, very few people like talking on the phone even if it's with people they know well.
What you can do about it: Invest some of your upcoming sales dollars into marketing instead of cold calling. Why? The numbers vary, but something between 50 percent and 70 percent of the decision process is made based on what a prospect finds through Google, your website, and social media. Shift the lead generation burden from sales to marketing. Marketing used to own branding, PR, events, and product marketing. Now marketing needs to also own lead generation because the old methods used by reps for this aren't working as well.
Fewer Opportunities for In-Person Charm
As a sales rep in the '90s, I travelled to meet all my prospects face to face. There was no GoToMeeting! All the key protagonists in a potential sale went to the office every day, usually at headquarters. So that's where I did my best to bond with the prospect and often times had pretty good luck. In 2013, it makes far less sense to travel to visit a prospect because you have GoToMeeting and because almost every important meeting has key players from the prospects side working in several different locations (or from home) anyway. Prospects don't want to be visited by a rep or have dinner with their rep any more either. They'd rather have dinner with their kids.
What you can do about it: Stop hiring outside sales reps or increase your ratio of inside reps to outside reps.
Different Sales Characteristics Are Needed
Since the rep gets involved later and the prospect often knows as much as the rep does by the time the conversation happens, the sales hire profile should change. At Parametric, I had five criteria for hiring reps, but the No. 1 was "aggressive." In a world where cold calling doesn't happen and the prospect has an information advantage, the No. 1 criteria should now be "brains."
This week at Hubspot, the sales shift has been top of mind. I launched a new sales product called Signals that is meant to help sales reps have more relevant, context-driven conversations with prospects. The fundamental nature of the way prospects shop for stuff and buy stuff has radically changed. Sellers need to radically change the way they sell to match up.