Are outside salespeople obsolete?

Published: Thu, 07/02/20

This week, one of my clients asked me this: “Are outside salespeople obsolete?” He is the CEO of a distributor who specializes in automation equipment. He had just lost three field salespeople and was thinking about replacing them. “What kind of person should I look for,” he asked, “in light of the recent and radical changes in the economy?”

While his need for a solution was urgent, the question he asked is one that every B2B sales leader should be asking in the next few months.

Outside Sales

For generations, outside salespeople thrived on face-to-face relationships. Their approach to the job was to get in the car and go see people. The world is full of businesses that have grown on that sales model.

For the last couple of decades, however, there has been a trend to enhance the role of the inside salesperson to complement and, in some cases, supplant that of the outside salesperson. Leading companies have been involved in slowly making these changes for some time. And, while the trend has been to move authority and accountability from outside to in, very few companies saw that as an all-or-nothing strategy. It was generally seen as an incremental approach, and almost no one considered that the function of the outside salesperson might be done away with completely.

Unrelenting Changes

Until recently. The COVID lock-down has turned the world of outside salespeople upside down. All at once, field salespeople found themselves locked out of their customer’s building. They couldn’t see their customers face-to-face. Those who were resourceful fell back on the phone and embraced video technology to attempt to stay in contact with their customers. They discovered that they needed to acquire an almost entirely new skillset, with new rules and new processes.

We stepped into the gap with a webinar entitled “How to sell to customers when you can’t visit them” which we provided free to our clients to help with that transition.

Now, the shock is over, and the new reality is settling on the world of B2B sales like a fog rolling in from the ocean.

The new reality contains these elements:

Both sides of the sale – salespeople on the vendor side and purchasing people on the customer side – have discovered that phone and video technology is far more efficient than face-to-face live visits. The economics of the equation are unassailable. The typical outside sales call costs a company somewhere between $150 – $300 per call. Whereas the typical inside, proactive phone call costs a fraction of that: +/- $5.00 per call.
A decades-long trend has just accelerated. There has been a trend for purchasers to make decisions on the bases of internet information without a live sales visit. Fifteen years ago, for example, one survey reported that 70% of surveyed purchasers said they would rather have a good catalog and knowledgeable inside contact than a traditional outside salesperson. That tendency has been around of a long time, but now it has been given a figurative shot of steroids.
A certain percentage of purchasers are going to insist on remote technology use by their vendor’s salesperson, as a means of adding efficiencies to the buying process in two ways: In the reduction of time spent during a sales call and, 2. Reduction of time spent by communicating with fewer salespeople.
In remote technology (phone and video) the initiator of the call must be far more organized and on point than what was traditionally expected in a live sales call. While it was always a practice of the best to be organized and prepared for a sales call, in many industries the salespeople could ‘wing it’ and use their ‘thinking on their feet skills’ to finesse a sales call with little preparation. Those days are done.

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Add all this up and you’ve got to ask, “Is the traditional role of the outside salesperson obsolete?”

While I don’t claim to have a special insight into the future, I have worked with B2B sales forces and selling organizations for 30+ years. I have an informed opinion. Here’s my view.

Is the traditional role of the outside salesperson obsolete?

In some industries, yes. In others less so. Here are three variables that will make a difference.

Three Variables

1. Size of the Purchase

Specifically, where the purchase is a big-ticket item, the chances of the purchaser making that decision without a live relationship with the seller is less likely. Where the purchase decision is smaller, the likelihood of a salesperson-less decision is far greater.

Let me give you an example. I’ve done a lot of work in the woodworking equipment industry. I’ve worked with dozens of companies who sold sophisticated equipment that cut and drilled desktops, for example, and cost the purchaser hundreds of thousands of dollars. A manufacturer considering a $500,000 equipment purchase is going to continue to want to see and know – face-to-face – the person from whom he is considering buying.

On the other hand, if he is buying a $50 band saw blade by the dozen, he will have no interest in spending time with a visiting salesperson.

The issue here is the size of the purchase decision. For example, a manufacturer may decide to use a $2.00 component. But, if he signs a contract for one million of those over a two-year period, the buying decision is formidable.

2. Intricacy of the Sales Process

Where the sales process is involved and complex, the role of a live, outside salesperson will continue to be required. Where the sales process is simple and straightforward, field salespeople will not be necessary.

For example, automotive manufacture deciding on the vendor for a couple of components to a new automobile. Lots of engineers must sign off on the deal, as do multiple levels of purchasing people. It is an involved, heavily hands-on buying process. While the cost of the individual item may be pennies, the risk of making a mistake is huge, and purchasers reduce the risk with multiple layers of buying requirements.

3. Sophistication of the Customer

This one works in the opposite direction. Where the customer is sophisticated, the likelihood of them utilizing a vendor’s field salesperson is less likely. Where the customer is less sophisticated, the likelihood of a field salesperson being a necessary part of the buying decision is enhanced.

I have a number of clients in the building materials industry, for example. If the customer is a rural, mom and pop retail lumber yard, that customer will be more likely to favorably view live outside visits. If the buyer is a multi-state developer of new residential communities, and therefore much more sophisticated, the likelihood is they can get by just fine without a vendor’s field salesperson.

The bottom line is this: There are very few absolute answers. It is a matter of degree. The degree to which your field salesforce is obsolete depends on your customers.

So, if your customer is relatively unsophisticated, your product is relatively expensive, and your sales process more involved, your outside salespeople will probably only feel some pressure to do more of their work – rather than all of it – remotely.

If, however, your customer is relatively sophisticated, your product relatively inexpensive, and your sales process simpler, your traditional outside salespeople are probably obsolete.

One Caveat

Most of the discussion above assumes a prior relationship with your customers. In other words, most of them know of you and you know most of them. What about the circumstances where you must regularly acquire new customers? This throws a monkey wrench into the works.

While all the three criteria mentioned above remain operational, the difficulty of the sales task is multiplied when you must sell to people who don’t know you.

Whereas before you could rely on field salespeople to prospect and create relationships, that is less likely to happen in the new environment.

This can be huge – a make or break challenge for many companies who relied on the proactive field salesperson to unearth new customers. The companies that successfully meet this challenge will understand that they must develop a new approach to customer acquisition.

They’ll need to re-think customer acquisition and develop systems that make heavy use of electronic communications, borrowing from the models developed in many of the B2C sales models. It will no longer be the individual’s responsibility to acquire new customers. Instead, the newly designed system will do it.

Where does this leave sales leaders?

Honestly, it is one of the biggest challenges of your career. You will not survive if you defend the status quo in the face of transformational change in your industry. Allowing a change-resistant salesforce to influence your approach will be a ticket to market irrelevance. It is time to step up and lead. Here’s a recommended game plan:

1. Analyze your selling situation in light of your customers. What do they want from vendors like you?

2. Based on that information, envision a tentative role for the outside salesperson. You may find that they should become hi-bred combinations of inside and outside sales: spending four days a week working remotely from a home office, for example, and one day actually seeing people who want to see them. You may find that a good percentage of the customers can be efficiently serviced by a competent inside salesperson. You may find that some may need to transition 100% from outside to inside, while others will not adjust to the new selling requirements.

3. Create a new set of expectations for the salespeople. Whereas before you might have expected 20 sales calls per week, now you may expect 20 per half-day!

4. Train them in the new skills and competencies they’ll need to survive and thrive and meet your expectations. A lot of salespeople will need to be more organized, better prepared, and more disciplined, to name a few of the competencies they’ll need to acquire. Check out our Kahle Way® B2B Selling System.

5. Measure your progress, understanding that you may have missed the mark and must make significant changes to some of the new things you just put into place. Flexibility informed by objective measurements will be the key. Keep a close eye on the salespeople who are transitioning from one role to another. Many may not make the transition. The sooner you can uncover that and fix it, the better for both you and the salesperson involved.

Summary

For twenty years, when asked about the future of the outside salesperson, I always replied, “Fewer and better.” That future scenario is here.

The question of the role of the outside salesperson may present you with the biggest challenge of your career. It is time to lead in ways that you may never have before. The future is yours to create.

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