Chapter 10: A Enterprise Sales Future

Overview

You Can Watch It Happen to You or You Can Make It Happen for You

The same forces that are driving today's sales environment are shaping the structure and focus of tomorrow's sales world. We described how the forces of commoditization and complexity have changed the sales environment to the point that the assumptions on which conventional selling methodologies are based are no longer accurate reflections of today's marketplace. These two forces are clearly splitting the world of sales into two distinct groups.

This split, a chasm that will continue to widen, is in the process of creating two separate sales environments. On one side of the chasm, the typical sale will be a self-service, commodity-based, cost-driven transaction - what we call a nonprescription sale. On the other side, the process will be a complex, value-driven transaction - a prescription sale that will continue to require the guidance of an experienced team of professionals.

The sales professional's future on the commodity side of the chasm is not very secure. In 1999, it was reported that as many as half of all existing sales positions will be gone within five years. ^[1] That report came near the height of the Internet Revolution, and it isn't hard to understand how some experts could forecast that half the salesforce would simply disappear. After all, many experts were claiming that the entire "Old Economy" was quickly becoming obsolete. In the process, online vendors with virtual auctions and other electronic marketplaces will soon replace existing salesforces.

This hasn't happened as quickly as many predicted, but behind the overly grim statistics, there is a strong kernel of truth. Internet technology is an effective means of providing access to product information and a rapid education of customers; thus, many products and services are treated as commodities. In this scenario, customers can self-diagnose, design their solutions, and serve themselves. As a result, comparisons on price, convenience, and transaction cost become the driving force in the market. One recent example dramatically illustrates the point: In 2002, e-commerce retailer Buy.com decided to build its share of online book sales. It announced that it would beat Amazon's already discounted book prices by 10 percent. The day the price cut went into effect, Buy.com's daily book revenues increased 800 percent, and its daily average of new customers nearly tripled. ^[2] That's a commodity market and a nonprescription product.

There really isn't room for a dedicated salesforce in the nonprescription, commodity sale. In fact, sales professionals are an unnecessary and high-risk expense. When salespeople are not adding value via diagnosis, design, and delivery, their presence cannot be justified. Any loss in the number of sales jobs in coming years will come at the expense of those who are allowing their offerings to be treated as commodities. That is why we expect to see the demand for sales professionals decreasing in numbers and the remaining positions filled by highly skilled sales consultants.

On the other side of the chasm in the sales world is the enterprise sale. As we have shown, this sale cannot be turned into a self-service transaction. Customers do not have the knowledge or resources necessary to self-diagnose and/or design the solutions that they need as well as implement those solutions. They require the assistance and support of a professional team.

The forces of commoditization and complexity are both acting on the enterprise sale, but the more complicated problems and solutions become, the less the sale should be transacted with simple decision making that characterizes a commodity-like transaction. Further, because of advances in technology and intense competition, the rates at which innovation and change occur are accelerating. As a result, both the problems and their solutions tend to get more difficult to understand, analyze, and evaluate. In other words, enterprise sales are getting even more difficult to manage, and more and more products and services that require this type of interaction are appearing in the marketplace.

For all of these reasons, we see the enterprise sales arena growing at a rapid rate. Today, there are roughly 16 million sales jobs in the United States. Of those, we estimate that 5 million positions are in more heterogeneous environments. Because of the trend toward increasing complexity, we expect to see employment and compensation expand on that side of the chasm.

To summarize, the sales world will continue to split into two models. One is the commodity-based transaction where few salespeople will be needed. The other is the enterprise transaction where skilled sales professionals will be required more urgently than ever. This is why we believe that enterprise sales will dominate the future of the sales profession, and great compensation will be available for those who compete there. Accordingly, sales professionals who want to ensure successful careers need to seriously pursue mastery of the enterprise sale.