The Web and the Future of Selling
The lunch conversation between the production people at the plant shifted to the Internet. Three of the six people at the table are Web surfers and consider themselves savvy users. "I just bought my new car on the Web," said Matt proudly. The others looked at him admiringly.
"It was easy," said Matt. "I selected the exact model and features I wanted and then picked four dealers in the area. When they e-mailed back their quotes I went to one and got my trade-in price, then I started e-mail haggling with each of the others. I played one off against the other telling each one in turn what the offer was from the other and asking for a better deal."
Matt did not stop there. He also went to the Web to arrange financing. When he was convinced that he had done as well as possible, he visited the dealership and closed the deal. "When they tried to suck me in on financing," he says, "I showed them my Web financing deal and told them to beat the deal or forget financing."
This is a true story. And the players are not computer jockeys, they are skilled production workers whose only computer use is at home.
The story is an example of what is happening to traditional selling. Salesmanship is changing to reacts-manship. All the selling Matt was exposed to occurred in print or on the Web. The one-on-one personal relationship that has typified selling for centuries is coming to an end across a large spectrum of everyday commerce. This will change the way companies think about their distribution approaches, the design and overhead inherent in the facilities from which they distribute their product, and the way we learn about products we want to buy.
Many people dislike going into banks so much that they use ATMs for all the transactions they can. And now the Internet is providing a more effective way for people to conduct banking on-line. At least one banking software developer is offering an Internet banking service that outsources online banking for both banks and non-traditional financial service providers. The company's software processes accounts, loans and deposits on the back end of an Internet bank.
Banks have spent much of the last decade developing the idea of "relationship banking" to increase the number of financial services they sell to each customer. An online bank moves the relationship onto the Internet where the successful competitor is not necessarily the bank with the most professional customer service people. Where is the personal banker relationship in this model?
A local business-to-business Web site developer is so convinced that the Internet is a superior way to sell goods, he is making an interesting offer to mid-sized businesses. He determined that for a typical business in his market the cost of keeping a sales force is 12 percent to 13 percent of revenue. His offer to prospects is that he will develop the site for nothing and keep 6 percent of thesales revenue instead. The companies do away with their sales forces and net an additional 6 percent or so on the bottom line. Interesting concept.
A prime Internet sales example is Dell Computer. Sticking to a direct selling approach increasingly Web-based, the company continues to flourish. Compaq, on the other hand, is struggling with multiple channels of distribution and sales compensation problems that have a negative impact on overall profitability.
There is little doubt that the death of salesmanship as we know it is just around the corner. Except for complex products and services requiring lots of interaction and discussion between seller and buyer, the role of a skilled, knowledgeable sales person is often unnecessary. In this age of "customized commodities", fewer purchases require complex analysis before a selection is possible.
Companies turning sales activities over to the Web are, in effect, admitting that sales people no longer add enough value to the relationship with their customers to justify the cost. If sales people are only functioning as order takers then OK, turn selling over to the Web. But if they do more than that, if their questions help prospects make better decisions, then maybe it is wrong to let the buyer control the sales call via the Web. This is a tough decision to make because few companies can have it both ways. Success will remain with those who pick the right way for them, whatever that may be.
After 18 years in marketing and sales at IBM, Bob Diefenbacher founded Denbrook Systems Associates, an IT consulting firm based in Malvern, Pa. firstname.lastname@example.org.
** Bob Diefenbacher's column also appears in the June 28, 1999 issue of MIDRANGE Systems.
--by B. Diefenbacher