Increasing Profits in a Wired World

Kevin Davis
 Sales Trainer

Many experts are predicting that the onslaught of the internet means the demise of the middleman. For those agents who refuse to change their traditional way of viewing the sales process, the experts' prediction will come true. But those who see the move toward a wired world as an opportunity --- and who start preparing for it now --- will be rewarded with record profits.

There is no doubt that the amount of business conducted electronically will continue to grow at an increasing rate. CNN reports that electronic commerce total $100 million in 1995, and that by 2000 it is expected to be in excess of $200 billion. And why not? E-Commerce saves time and money --- the internet is enabling customers to access information quickly without the hassle or delay of talking to a salesperson. Using this information, buyers can lower their costs by going directly to the manufacturer. E-Commerce also affects the cost of the order itself. BusinessWeek recently reported that while the cost of generating a paper purchase order is $150, the same order handled electronically costs just $25.

For these reasons, E-Commerce appears to pose a threat to salespeople. In some instances this is true. However, customers involved in a more complex buying decision cannot rely on the internet alone. To make an informed, prudent choice, customers still need the wisdom that only salespeople can provide. What customers require the most help with --- and what they cannot obtain from the internet --- is help in dealing with the future. To succeed in the age of technology, salespeople must assume the role of the problem anticipator --- they must work with clients to identify the changes that will affect their business, and must respond to those changes proactively and with greater effectiveness than their competitors. Successful agents will deliver a "solution package," not simply a product pitch.

"Buy-Knowing" Versus "Buy-Learning"
People buy in two ways. When buyers feel they already have the information they need, they will reach a buying decision quickly. I call this method of purchasing "buy-knowing." A repeat purchase is an example of a buy-knowing purchase. It is made fast, without deliberation, and primarily driven by emotional need. Because there is no great challenge in selling buyers something they already know they want, these types of purchases are made easily via E-Commerce. The internet provide buyers with enough information to purchase the product or services, and the efficiency of its use will help them save time and money.

On the other hand, for businesses and customers alike, the first-time purchase of a significant product or service is typically accomplished with what I call a "buy-learning" process. This process is more complex because it involves the acquisition of information and careful consideration of alternatives to ensure that the best decision is made. For buy-learning purchases, the internet is ineffective because it cannot provide the breadth and depth of information that is needed. The more complex the buying decision, the more customers need the input of a salesperson.

Technology's Effect on Buying Behavior
The irony is that the same market force that is bringing us the internet threat --- technology --- is also working to help salespeople by complicating customers' buying decisions. Technology has created an increasing number options available to buyers which, in turn, ensures that the product they buy today is different from those purchased a few years ago (and it is likely to be obsolete relatively quickly). Cellular phones, satellite TV, personal computers, laptop computers, digital video discs, and personal digital assistants are just a few examples of new products available to consumers. To confuse the buyer even more, technology is merging telecommunications, television, consumer electronics, computers, information services and publishing into a single information industry. Because of these technological advancements, buyers cannot call upon past experience as a source of information. When faced with change and uncertainty, buyers cope by learning. They cannot simply turn to the internet to learn all they need to know --- they must rely on salespeople to provide the knowledge they need.

Making It in a Wired World
The key to success in a wired world is to make it easier for your customers to make buy-knowing purchases and to refocus outside salespeople on buy-learning prospects. This represents an offensive strategy that is proactive, and a defensive strategy that makes buy-knowing purchases easier.

George Constas is president of General Process Controls (GPC) of Pleasanton, CA, a $20 million manufacturer's representative of industrial valves and controls. Last fall, seeing the inevitable future of a wired world, and determined to be a major player in that world, GPC went online with its web site. "So far, few customers have used it," says Constas, "but we'll be ready when they do." GPC is certainly not alone in moving forward with the times. About 20,000 companies and business people interacted with clients and prospects on their Web sites in 1995. This total was up from only 1,700 in 1994 --- an increase of 1077%. At that rate, nearly a quarter million businesses will have some sort of presence on the World Wide Web by they end of the year.

The advantage of adopting a proactive/reactive strategy is increased sales efficiency. Salespeople can focus on what they do best --- proactive business development --- without getting bogged down in the myriad of details involved in order processing and delivery. The result is increased sales and reduced costs. To help focus salespeople, companies should also consider the following points:

Death of a Product Salesman
Historically, a salesperson's role has simply been to explain the features and benefits of a product, and to process the order. As we have determined, buyers can handle simplistic transactions like these more efficiently online. Technology has led to the demise of the product salesman, and in its place has evolved a salesperson that delivers "applications knowledge." Salespeople now must be more involved with integrating their product or service in the workplace and understanding how it interfaces with other systems.

Suppose a business person wants to buy a PC. He can shop price, buy individual components and build a system by himself. Or, he can buy a system that a salesperson integrates for him. Sure, the customer will likely spend more money to have you integrate it, but in return he will save time --- time that he can put back into what be does best, what a business would call the "core" business.

We live in an information society where knowledge becomes obsolete at an increasing rate. So, to provide useful and state-of-the-art information, salespeople must increase their speed of learning just to keep up. For example, in 1993 Motorola provided every employee with at least 40 hours of classroom training. Finding that this was insufficient, Motorola announced in 1994 that training of all employees would be increased dramatically --- reaching 160 hours of training annually by the year 2000. Motorola believes that the business battles of the future will be won with responsiveness, adaptability, and creativity. By investing $600 million per year in training, they expect to provide the tools their employees need to compete --- and to win.

The Importance of Specialized Knowledge
To remain successful in spite of the information available to consumers on the internet, a salesperson must also be able to influence a prospect's buying decision. To do so, you must be an expert in your field --- you must know more than your buyer knows not only about the product or service you are selling, but also about the buyer's business, anticipated changes in the industry, your product and service applications, and your competition. You will also need to acquire advanced selling skills to enable you to use this knowledge persuasively. Your expertise is your competition advantage --- the faster you gain knowledge, the greater your advantage will be.

When it comes to product knowledge and experience, prospects can be divided into three categories: beginner, intermediate and expert.

Beginner: Beginner prospects have little or no experience with your product and, in turn, will have few criteria established without conducting research.

Intermediate: Intermediate prospects have some knowledge and experience about certain aspects of a purchase and usually have some criteria established when they begin to research the alternatives.

Expert: Expert buyers know almost as much, and sometimes more, about your product than you do. Experts typically want to talk to your technical people in order to integrate your product or service with another "state-of-the-art" system they recently installed. Expert buyers may have buying criteria you have never even heard of before.

As an "architect of selling" your goal is to create a unique solution that meets your customer's needs. The solution you design should include certain buying criteria for your customer which are also competitive advantages for you. Then, when your prospect begins to compare the alternatives, his criteria include unique capabilities available only from you. The result is a customer-focused solution that locks out your competition.

Change has made today's economic conditions more challenging and the future virtually impossible to predict. While advancements in technology have given us the ability to access information --- an entire world of information --- at our fingertips, it has created both problems and windows of opportunity for salespeople. Buyers can go online to acquire the knowledge they need to make simple buying decisions --- buy-knowing purchases. Yet, technology and the internet fail to offer the depth and breath of information needed to make complex buying decisions --- buy-learning purchases. The wired world cannot anticipate problems and concerns that are likely to affect a prospect's business, nor can it integrate a product or service into the workplace. To be successful, salespeople adjust their sales approach to capitalize on these shortcomings. Salespeople must offer buyers what they do not find online ---- the wisdom, expertise and, of course, courtesy a computer simply cannot provide.

About the author: Kevin Davis is a Danville, CA-based sales trainer. He is also the author of Getting Into Your Customer's Head: 8 Secret Roles of Selling Your Competitors Don't Know. Kevin can be reached directly at (510) 831-0922 or send him an e-mail at KDavisSell@aol.com.





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