Collaboration Kills Commoditization

There is a trend developing in the sales world that has caught my eye over the past couple years.  This Sales & Marketing Management article opens with a terrific summary of what I have experienced (emphasis mine):

According to Harvard Business Review, “Traditional sales methods are increasingly unproductive. In fact, aggressive sales styles and product-focused selling are now so outdated that some customers are simply refusing to meet with salespeople using these techniques. In this situation, focusing on product features in the sales meeting is a waste of everyone’s time. In fact, there is plenty of evidence that high-performing sales people are those who listen and respond, who are flexible, and who think in terms of developing a solution to an emerging customer problem.”

That entire paragraph is spot on.  The “aggressive sales styles” they reference is the High D (Dominance).  These salespeople have a driven, aggressive, even confrontational style.  This style is often considered the classic sales hunter style, but that stereotype is changing.

Here’s why – the High D style has done well in the past when they were able to control information (product info, tech specs, etc.).  The High D’s were able to leverage that information for meetings and commitments from prospects.  Today, that information is on the web so the need is for salespeople who have the ability to connect with prospects to get in front of them.  This is not the High D’s strength.

So where is it going?  Back to the article:

What customers increasingly want from their vendors are collaborators.

The author goes on to acutely describe the possible definitions of the collaboration.  This collaborative approach will eventually fit in nicely with the upcoming Millennial generation.  That generation, in general terms, has a desire to work on projects/tasks in a completely collaborative way.  As the Millennials move up the proverbial sales ladder, the collaborative culture will become prominent in most sales departments.

The closing paragraph from the article wraps it up nicely:

Order taking may make your salesperson’s job easier, but typically what your customer really wants is a trusted partner. Collaborating with your customers builds relationships, adds value, and helps further entrench your key strategic accounts. It helps keep the competition at bay. And, it keeps your offering from being commoditized.

Sales Departure Time

I do think there is an impending, colossal jump of sales talent in the very near future.  The Herman Trend Alert speaks to this potential in their latest report:

According to a new CareerBuilder survey, more than one-quarter (28 percent) of sales employers are concerned about losing their high performing workers in the second quarter, while more than one-third (35 percent) of sales workers said it is likely they will start looking for a new job when the economy picks up.

And here is why:

Increased workloads, longer hours and fewer resources related to the recession may be contributing to job dissatisfaction. Looking at key factors that influence job satisfaction and company loyalty, sales workers reported the following:

•Pay – More than one-third (35 percent) of sales workers said they are dissatisfied with their pay.

•Work/life balance – One-in-five (20 percent) sales workers said they are dissatisfied with their work/life balance.

•Career progress – One-in-five (21 percent) of sales workers said they are dissatisfied with the career advancement opportunities provided by their current employers.

I’m a bit jaded here in that I think pay is probably much higher then what is normally reported in these surveys.  Nonetheless, I have talked to a handful of salespeople recently who are starting to put their ears to the tracks regarding new opportunities.  I still believe the hiring landscape will be slow this year, but will begin to ramp up in Q4.  A year from now may be one of the largest retention struggles we have seen in quite some time.

2010 Unemployment

9.3 to 9.7%

That’s right, that is the expectation for the 2010 unemployment rate from the Federal Reserve based on this abcnews.com story.  I find that number shockingly high, but it is realistic.

Then there is this bit of information from Reuters (emphasis mine):

Speaking at American Economic Association’s mammoth yearly gathering, experts from a range of political leanings were in surprising agreement when it came to the chances for a robust and sustained expansion:

They are slim.

Many predicted U.S. gross domestic product would expand less than 2 percent per year over the next 10 years.

The depressed economy combined with the high unemployment numbers has started to change my thoughts about the impending employee shortage.  As the Baby Boomers exit the workforce, there may not be an immediate need to replace them on a one-to-one basis.  The potential length of this recession combined with the dramatic increases in productivity (leveraged by technology) seems to point to a needed exit of the Boomer generation.

One shift we are seeing in our business is a disinterest in hiring inexperienced salespeople.  The surplus of experienced, effective, established sales candidates has placed the typically younger sales candidates in an unenviable position.  The ramifications of this trend may have an impact on the sales talent pool in the next decade.

Sales is a profession that requires experiences to develop skills which is why it cannot be taught effectively in a classroom.  The trap many hiring companies fall into is a belief that the sales candidate needs to have specific experience in their industry.  Although desirable, the better approach is to have experience in a similar sale that has allowed them to develop and hone transferrable skills.

That being said, a remarkably high unemployment rate will have a negative impact on sale hiring in the younger generation.  That depressed hiring trend will force younger candidates into other fields creating a sales talent void over the next decade.

Swamped By Applicants

I am hearing more discussions about incredibly large responses to sales job postings in this present economy.  Some of the companies I talk to are overwhelmed by the sheer numbers of resumes they receive.  I went back to look at an old article we wrote back in 2005 when the economy was in a much stronger position.  In today’s economy, the points are even more applicable:

If your ideal sale starts at the VP level, state in your ad that a needed skill is the ability to communicate at the VP level.  If your sale involves many competitors, state in your ad that the successful candidate is able to close deals in a competitively crowded market.  You get the idea – stay focused on the successes you desire from the salesperson in this role.  The primary goal of the ad should be to move the sales superstar to respond.  They should see themselves, or better yet their abilities, in the ad – the skills they possess today, their motivations to succeed and the parameters for success in the position.

The key is always to write the ad with the ideal salesperson in mind.  Often I read ads that are clearly just job descriptions posted my HR on a job board.  Some are amazingly bad – listing amount of weight one has to lift, detailed dental insurance plans, obtuse software references.  There is a time an a place for these things, but not in the approach ad.

I always tell our clients to view the hiring process as a sales call.  Imagine a salesperson cold calls you and starts doing a detailed data dump about a product or service.  The salesperson doesn’t even qualify you for need, they just start rolling.  I find overwritten sales employment ads elicit the same response from me.

The better approach is to think of your ideal salesperson when constructing the ad and write the ad using the most salient points to illustrate the position.  This will keep your writing to a minimum while staying on topic.

And the reason why this is important is defined in this Businessweek.com article:

Such employees are taking a “scattershot” approach to job hunting, sending resumes for openings whether they are qualified or not. That can create headaches for an HR organization. One executive I met with recently told me he had received 200 resumes for a top managerial position. Twenty of them were excellent, but the rest were well-crafted resumes of people who were in no way qualified for the job. Better filtering systems are going to be essential to streamline the hiring process and keep time and costs in check.

Write a better ad.

When Will It End?

The Great Recession roars on during this holiday season.  Our company is focused on sales hiring, both assessing candidates for our customers and running full recruiting processes.  The hiring outlook is of great importance to us and a topic I try to track closely.

That being said, this abcnews.com article provides a mixed bag (emphasis mine):

The November outlook by the National Association for Business Economics, which is set to be released Monday, shows economists expect net employment losses to bottom out in the first quarter of next year. Employers are seen starting to add to their payrolls after that.

I would be more comforted by these economists if I didn’t read so many unemployment stories that are saturated with phrases like “economists were surprised by the numbers….”  However, any possibility of recovery is a welcome thought.  It does appear that the hiring environment will be reserved:

But even if companies do start restaffing next spring, they aren’t expected to ramp up hiring very quickly. Some 7.3 million jobs have been lost since December 2007, according to NABE. Of the 48 panelists surveyed, 61 percent do not expect a complete recovery of those lost jobs until 2012. And they expect the unemployment rate will remain “stubbornly high,” averaging 9.6 percent in the fourth quarter of 2010.

“Stubbornly high” should be in quotes.  I would have used the adverb “dangerously,” but that is me.  One point to make here is that strong salespeople are a valuable asset to any company and even moreso during depressed revenue times.

The Future Of Social Networking

The Herman Trend Alert’s topic this week is the future of social networking.  An excerpt for you (my bolding):

“Social networking is in its infancy”, says David Nour, Relationship Economics CEO and Web 2.0 guru. “We’re on the upward swing of the hype cycle”. Lots of people are discovering the power of Social Networking and investing their time and energy to make it work for them.

“The real power and promise of Social Networking is a mass collaboration platform, accelerating one’s ability to get things done”, adds Nour. Enlightened individuals are shifting from “not invented here” to “invented everywhere.” It gives us the opportunity to extend our reach beyond any geographic, functional roles, or even industry sectors to learn and grow from others.

That bolded point is an excellent one, is it not?  I have found myself conversing with people from industries I would never have expected.  That is one truth about sales – the fundamentals of it are consistent across industries.  You wouldn’t suspect that truth by looking at sales employment ads which is disappointing.

Sales always comes down to prospecting, qualifying and closing.  The challenges of this work is surprisingly consistent in product sales, service sales, distribution sales, OEM sales…the fundamentals are the same.  This fact is why it is important to measure a sales candidate’s skills and talents with as much, or more, weight than their previous experience.

A relatively new aspect of sales hiring will be an understanding of a candidate’s network.  More sales are moving to this channel and candidates who bring an expansive social network will have an inherent leg up on less-connected candidates.

Down 25%

That is the number I continue to hear from salespeople in a variety of markets when I ask them how are sales?  That is a staggering number when you think about it.  Unfortunately, those are the times we live in for now.

I continue to believe that the best method for offsetting this decrease is to go take business from your competition.  Who are their top customers?  Those accounts must always be your top prospects in any economy.

In today’s economy, I believe it will be difficult to persuade companies to invest in new purchases.  However, if they are currently buying from a competitor, salespeople need to unhook the business.  The company has already committed to spending those dollars so the money issue is an easier qualification/justification.

If you are selling a new product or service to them, you best jump right into return on investment (ROI).  Features and benefits selling will lead you right into tirekicking paradise without any closed deals.

2 Jobs In 1

The Wall Street Journal offers an article about companies combining 2 jobs into 1 and then hiring based on the lower level job.  The author explains it better than me:

Some job hunters have been encountering a new kind of downsizing: companies that aren’t eliminating positions entirely, but are combining a mid-level position with a more junior one — then advertising it as a junior slot and offering a lower salary.

I’m not sure this is the best approach to hiring in that you often get what you pay for.  One of my suggestions would be to assess the candidates if you go this route.  There are many talented, young candidates who could grow into a larger role quickly since they have the talent to succeed.  However, if you are not assessing, you may get caught over-relying upon your gut.  Or biases.  Or blind spots.

Recruiters say the trend is accelerating as earnings sink and companies scramble to cut costs any way they can. “Throughout every economic downturn, there’s a contraction in the U.S. economy and firms rethink how they organize themselves,” says Clark Beecher, managing director of Magellan International, an executive-search firm based in Houston. “They will bring in one person to do three people’s jobs and stretch their assets.”

We see the world through sales-colored glasses, but this trend is in the sales world too.  More and more companies are looking for salespeople to “manage the relationship.”  That is code for customer service.  I’m ok with that approach as long as the expectations are set properly.  One thing is for sure, hunters often make bad customer service reps.

Relationships Drive Sales

Selling has always been about relationships, but it is becoming more significant in today’s world.  According to a recent study referenced in this Selling Power.com article – The Relationship Imperative – product superiority is not as big a driver in customers’ decision-making process.

“Product superiority used to be a big advantage for companies,” says Jim Dickie, partner at CSO Insights. “But collapsing product lifecycles is changing that. If a competitor doesn’t have a feature or function today, they can catch up a lot faster than they could in the past.” The result: product superiority has dropped down to the number three reason companies win deals with just 35 percent of companies citing it versus 56 percent who say relationships drive their wins.

Isn’t that notable?  “Collapsing product lifecycles” is really behind this shift.  I just read an article about 5 new cell phones coming out to compete with the iPhone.  They are all touchscreen phones with many similar features.  Maybe we are trading imitation for innovation?  Whatever the reason, relationships drive sales.

The Demand For Salespeople

Salespeople, with strong skills, are always in demand in any economy.  Certainly some sales opportunities have an ebb and flow tied to the current economic conditions, but those are mainly business-to-consumer positions.  From that understanding comes a 2008 sales hiring outlook from Monster.com.

First key graph:

In 2008 as always, salespeople in nearly any industry will find work, if they’ve got the contacts, the product knowledge and the street savvy. “Any successful salesperson in any industry is able to write their own ticket,” says Brandon Gutman, director of marketing and business development for recruiter Stephen-Bradford Search in New York.

Couldn’t agree more.  As companies make difficult decisions, some strong salespeople are let go due to financial considerations.  This fact is why we do not abhor a bit of a hiring slowdown.  The slowdown puts some strong salespeople on the street who may have been much harder to recruit out of their former position.

Some of the hot niches this year:

Salespeople in hot information technology sectors can remain optimistic, despite the slow economy.

“In online advertising sales, there are more positions open than bodies to fill them,” he says.

From biotech to carbon credits to the robots that have replaced factory workers, 2008 will see the continued proliferation of complex products, creating a need for salespeople with high-level skills and special subject-matter expertise.

High-level sales skills are in demand today.  The days of shake-and-howdy, round of golf sales calls are waning.  Salespeople with the skills to navigate long sales cycles with multiple decision layers are the ones who will be in the most demand.