The Internet has utterly transformed the way that companies buy and sell.
Over the past 20 years we've seen the Internet move from dial-up connections and brochure-ware to broadband and social networking. Since that transformation is now largely complete, this is a good time to examine how it's changed the way companies buy and sell.
The below is condensed from a special report I authored with Howard Stevens, CEO of Chally Worldwide. That report, along with several others, is currently available for free on the Chally website (HERE).
1. Customers are Better-Informed, But...
Historically, buyers relied on vendors to provide product information and expertise, usually in the form of product/benefit presentation that provided information the buyer needed in order to make an intelligent decision.
That is no longer the case. Using the Web, buyers can get all the product information they want (and more). As a result, buyers do not want sellers to waste their time providing information that's easily available elsewhere.
The Web has also changed how buyers evaluate pricing. In the past, the simple mechanics of gathering data on competitive products (and comparing relative prices) was a formidable job, requiring many man-hours of effort.
Today, however, buyers can instantaneously compare products online, making it easy and inexpensive for customers to search for the lowest prices for many of goods and services that they might require.
The ability to quickly find alternative products tends to drive prices downward because, all other things being equal, the customer will almost always purchase the lower-priced product since it no longer costs much to research those alternatives.
2. ...Customers Also Feel the "Tyranny of Choice"
In addition, even though the Web allows buyers to discover alternatives, many find themselves overwhelmed by what psychologists call "the tyranny of choice," where too many alternatives create buyer anxiety, making a purchase less likely.
Many buyers--especially busy ones--sense that learning enough about product category to make an intelligent decision is less cost effective than simply calling an expert (i.e., a salesperson) and just having that salesperson "take care of it."
In this case, the seller, in essence, acts as the "manager" of that segment of the customer's business, ensuring that the product or solution works well in the customer's environment and creates the measurable results that the buyer seeks.
As a result, many customers now look to their vendors to "own" the aspects of their own business that the customers would prefer not to "own" themselves. Customers are thus demanding more from sellers than when selling was mostly delivering information.
3. The Web Creates Demand For More Salespeople, But...
Not too long ago, many business pundits believed that the Internet would make sales reps obsolete because customers would be able to make decisions, order products, check delivery status, and so forth, entirely without the seller's assistance.
In some markets, this has happened. The airline industry, for example, has become almost entirely driven by price, with consumers and business people alike able to choose the lowest cost flight on a variety of websites, without using a travel agent.
However, while travel agents are no longer responsible for selling the millions of domestic airline tickets, travel agents still exist, but they provide more complex services (like luxury travel) that assume that airline tickets are commodities.
In other words, one market becomes "fictionless" and the sales role declines, it typically creates another, higher-level market that requires the customer to seek the expertise of a salesperson in order to navigate the complexities.
The same thing happened in the computer industry. Most computer hardware are now commodity products and are bought directly across the Web without the presence of a salesperson.
At the same time, what companies actually DO with these cheap and easily-purchased computers has become far more complicated, demand greater levels of expertise from the sellers of software and services.
4. ...The Web Also Demands More From Salespeople
In the past, selling was seen largely as an "art" consisting primarily of interpersonal skills, often rooted in social psychology such as rapport building along with procedural knowledge, such as how to configure a deal or write up an order.
Today, selling to businesses requires business acumen and in-depth industry experience, so that the seller can take responsibility for key functions inside a customer's account. Selling often requires the ability to build an ironclad case for ROI.
This is not to say that traditional sales skills are entirely useless. However, if buyers are to welcome sellers into their business as consultants and trusted advisers, the seller must be able to command the same credibility as an manager within the buyer's firm.
The web also demands that sellers have a higher level of technological skill as well. Blogs, web conferencing, and social networking are now common as sales tools, and many sellers harness the wealth of Web-based data to focus their selling efforts.
The new technology, along with the new demands that buyers are putting on sellers, has made the sales archetype of "the maverick who closes the big deal" increasingly quaint and even obsolete.
Instead, buyers now expect sellers to become engaged and enmeshed with the buyer's own business, an expectation that demands higher levels of industry knowledge, technical knowledge and general business expertise.