Sales Reps and Sales Managers: Endangered Species
June 14, 2017
In North America there are over 2 million sales representatives and over 337,000 sales managers (Source: US Department Labor; salaried, full time, full benefits). As the new global economy takes hold, purchasing technologies improve, and pressures to grow business and cut costs intensify… the forces quantifying sales performance are discovering that there are far more effective ways to sell products and services.
The median annual salary w/ benefits for sales representatives is $100,000 and for sales managers is $140,000. When measured against their sales growth/profits, the costs are high. The old maxims of putting resourced sales representatives on the street will grow business are falling flat in the face of reality. Cold calling is not working and old relationships/loyalties are fading. New branding techniques, scalable technologies and the way businesses now buy, are limiting the chances for sales representatives to be successful. Sales managers are now faced with high rep turnover, training options with lackluster results, unrealistic goals and new realities that are tying their hands to impact business growth. Businesses are clearly buying through new and improved sales channels.
Three channels are reinventing the way businesses sell/buy their goods and services: Branding, Technology and Culture.
Branding: Just as cattlemen seared their ranch brands on their livestock, businesses today spend millions on positioning their brands to be recognized, differentiated and sizzled with their consumers. Creative logo styling, colors, music, even star power, all blend so that we know immediately with either an image or sound, what the product/service is and identify as our preferred choice. Marketers are now heavily involved in production and distribution of goods and services, monitoring the consumers experience and engineering adjustments to make each experience repeatable, creating loyal customers. Those that better position their brand in the minds of their customers are those that reap greater sales and higher margins. Outlets include television, radio, print, internet and sport sponsorships; however also effective are guerrilla techniques such a word of mouth, product placements, engineered articles, testimonies and celebrity endorsements. Just think of your own favorite brands that you buy…Did a sales professional make the difference or were you already sold by the branding experience?
Technology: Ask any manufacturer/distributor what the biggest growth channel has been in the last 10 years for business to consumer sales and hands down for each has been the internet (Sales representatives & sales managers please note: you were not needed whatsoever in this spike in business/profits). Now business to business sales are being leveraged similarly, in part through internet portals but far more by third party entities that leverage new technologies to view greater options, leverage savings, make cost comparisons and determine deliverable values…at no expense to buyers as these entities are contingency based. No more stampede of traditional sales representatives, product pitches, cold calls or catalogs…as smart buyers know they can not possibly discover all the product/service options available to them on their own or rely buying from past relationships that have increasingly limited value and growing costs. The vast majority of businesses are unable to afford chasing the software to analyze options and leverage their buying power. Fortunately in today’s marketplace, third parties have emerged to do the complex analysis optimally on a contingency basis. These highly professional sales agencies, being paid only on results, are the growth forces in sales today.
Culture: The old command and control, operationally driven cultures in business are giving way to true customer driven business models. Operationally driven companies often lack trust or respect with their sales personnel, creating so called accountabilities that lead to unproductive cell calls, unclear emails, unread reports, no objective meetings, knee-jerk training, weak compensation, heavy customer service responsibilities, sales quotas set by hopes rather than ability and elusive bonus programs which are at best numbing, at worst unproductive. Those companies growing their goods and services have leadership that nurture cultures where everyone is responsible for sales and recognize that selling on the street is best left to professional agencies. Agencies understand the need to contract with only those who know where and how clients buy, making real sales growth, value and savings happen.
As businesses continue to reinvent how they buy/sell their products/services, sales professionals must reinvent what they have traditionally viewed as a career path. No longer will there be large resourced sales staffs in services or manufacturing. As traditional sales jobs decline, the results oriented professionals will be taking their skills and intelligence to fully commissioned based manufacturing representatives, supply chain management agencies and distributors that are far more effective in creating sales growth. With fewer sales jobs available, the most capable reps that excel in making real growth happen will move to being fully commissioned reps. The underperformers will fall into customer service jobs (also declining in numbers and compensation), inside sales positions (also declining in numbers and compensation) or fall into underemployed opportunities (also declining in numbers and compensation).
The prospects for sales professionals in agency based commission sales are dramatically improving while traditional sales jobs are clearly declining in numbers and compensation. The time is now for sales representatives and sales managers to reassess their endangered careers and take control of their destiny, instead of falling prey to global market realities.