The sales function is one of the most studied, dissected, and carefully managed parts of the corporate machine. Modern businesses have long focused psychology, mathematics, game theory, and sophisticated software on sales, and have dramatically added science to what many consider to be an art. Curiously absent, however, has been a strong focus on how people purchase in groups; for most of recent history, sales has been a one-on-one game.
Accordingly, as we consider the implications of the Hyper-Social shift for the corporation, one of the locations that will experience a strong impact is the sales function. One of the fundamental changes to consider is that sales is no longer a one-on-one phenomenon; when you’re trying to sell to social beings within a communicating group, the other members of that group can trump all of your sales and marketing efforts, and the group has a long memory for prior exchanges. Moreover, trust among members of the group (who in most cases have self-selected one another as members of the same tribe) is high, and this can be either a wonderful boost or a terrible impediment during the sales cycle.
It is unclear at this point how the relative importance of the corporate sales force will change. Will more of the sales function be ceded to the tribes? Will sales become irrelevant—won’t buyers just fill in online forms when they want to order? How will salespeople deal with the perfect transparency of pricing that the community will impose? Historically, transparency on matters of pricing, terms, and incentives has not been encouraged or appreciated by salespeople.
On a positive note, prior to the Hyper-Social shift, sales were based on the sales “funnel”—many potential sales entered at the wide end, but only a few actual sales emerged from the narrow end. Ostensibly, the sales cycle should be more efficient and perhaps shorter when the tribe can communicate in real time on matters of interest and price. Since it is typically to the salesperson’s advantage to spend as little time as possible on a sale, and therefore to shorten the sales cycle for whatever she is selling, this narrowing of the funnel could well be a positive development.
In addition, as SAP learned when it began selling developer kits to its developer tribe, customers who could not profitably be sold to in the past can now become customers when the tribe is doing the selling. Selling software to small developers in a one-off fashion was apparently unprofitable for SAP, but when it could qualify sales leads via its tribe, those individual customers suddenly became profitable customers.
Moreover, arguably the two greatest frustrations of salespeople, trying to sell the wrong product at the wrong price, could be ameliorated by the Hyper-Social shift. If the tribe participates in product development and pricing discussions as well, then sales-people should never find themselves in the position of trying to push a poorly priced product to a customer who has no interest.
Many of the changes driven by the Hyper-Social shift may well also prove to be boons to the salesperson. Faster innovation cycles, an explosion of choice in a global marketplace, and varying levels of trust in unfamiliar vendors may make the informed and familiar salesperson a preferred resource for helping consumers to make the right choice. Given the increased visibility that sales will have to the rest of the tribe, salespeople will be driven to seek enduring relationships rather than to exploit buyers with “quick hits” that maximize short-term profit, but tarnish that salesperson’s reputation forever. As a result, salespeople will be able to capitalize on economies of scope, deriving more and more revenue from those buyers with whom they’ve worked successfully in the past.
If social media and coordinating technologies like the Internet result in lower coordination cost between players in the marketplace, we may see an “unbundling”1 of the corporation in the near future. Unbundling refers to the ability to disaggregate an organization into disparate functions, such as customer relationship management, product innovation, and infrastructure subfirms, when the costs of coordinating these functions outside the organization are lower than the costs of coordinating them within the same company. This unbundling may result in sales-people beginning to serve a more important coordinating role, helping to source interlocking, complementary products from different vendors that deliver the required functionality.
The increased incidence of products that require ongoing services (software upgrades, tweaks to keep products in regulatory compliance, and so on) may well transform the salesperson into a relationship manager who is expected to continue delivering even after the product has been sold. This expansion of the sale past the actual payment will also be driven by social media that permits buyers to continue to question the value of the sale long after it has been technically consummated. Conventional product recalls have typically involved major defects that affected many clients. Since the salesperson is likely to be the most immediate beneficiary (or victim) of a satisfactory (or unsatisfactory) sale, she will be the person who is most invested in ensuring that problems are resolved to the satisfaction of the tribe.
If this seems like a lot more work for the same sale that could have been finalized privately over a dinner in a smoky restaurant 10 years ago, consider the benefits. Salespeople will have a better idea of what consumers want, as consumers will talk about what they’re buying, how much they paid, and what they think of the competition. Moreover, when the salesperson has satisfied them, they are likely to transmit this information far and wide, ensuring follow-up sales from other members of the tribe.
Let’s take a closer look at how Hyper-Sociality can affect your sales activities. The most important conversations in a Hyper-Social business environment are no longer the ones that you have with your customers, prospects, and detractors—they are the ones that are taking place among them.
Now that they can, people will increasingly make their buying decisions based not on information coming from your marketing or sales department, but on information coming from their friends, their peers, or people in their tribes who are recognized as experts. People trust recommendations from friends more than any other source of information. Illustrating this trend, recent consumer research2 shows that more than 50 percent of U.S. electronics consumers now rely on Web-based research to narrow the choice of brands rather than following the advice of the sales staff when choosing among products in stores. The same research predicted that by 2010, 80 percent of customers purchasing insurance products will do so based on information that does not come from the insurance companies.
If people make buying decisions based on recommendations from other people within their tribes, that means that you have to change the way you create and distribute branded content. You will also need to change the way you get people’s attention and the way you sell to them.
Let’s start with content.
You may be frustrated that only about 20 percent of the content developed by your marketers is actually used during the sales process. In a Hyper-Social world, you should brace yourself for worse. If you continue to develop corporate-speak-laden materials and lengthy product-centric white papers, nobody will use your content to inform his buying decision. Remember, the most important conversations are those among your customers, prospects, and detractors. What you need is content that has a high likelihood of becoming part of those conversations. That content needs to be findable, shareable, retellable, and, most important, valuable and compelling. In short, it needs to be “social-mediafied.” While you can no longer control the message about your products and services, you can arm your champions to tell their story about your products and services within their tribes.
Are you interrupting people to get their attention? Stop wasting your money—that is no longer going to work. The dynamics of Hyper-Sociality will make interruption marketing increasingly ineffective and cost-prohibitive. To draw from our previous example again, you used to go to parties where nobody knew one another, and now you go to parties where there are strong social cliques. When nobody knows one another, it’s easy to start a conversation or interrupt an existing one to start a new one. When there are strong social cliques present, you can stand in the presence of a group that is having a conversation for minutes without anyone even acknowledging your existence. That is exactly what Hyper-Sociality has done to your ability to have conversations with your audiences. In the past, the members of your audience had no way of communicating with one another in a scalable way, or to form tribes. So it was easy for you to interrupt them and pass along your information (and in many cases, to develop very bad habits in the process). Now, your customers have found one another and formed strong networks. Combine that with the fact that most people no longer trust the information that comes from you, and you can stand there all day waving your arms, only to find out that not one person will acknowledge your presence.
The same is true for sales. In a Hyper-Social world, and from your perspective, your goods may increasingly be bought and not necessarily sold. People will make most of their buying decisions by talking to other people within their tribes and will get you involved only in the later stages of the buying process—when they are ready to acquire the product or service that you are offering. Increasingly, the conversations that they have with others are happening in public—they can be monitored, they can be mined for insights, and they can be joined. So your salespeople need to become much more consultative, and to be available when and where questions arise within those consumer tribes. When marketing author Geoffrey Moore says, “sales IS social networking,” he hits the proverbial nail on the head.3 Sales should have been viewed in such a way all along, but it hasn’t been, and that’s why it needs to change. From now on, you will need to earn people’s attention; you cannot just buy it anymore.
Of course, nobody can predict the full extent of Hyper-Sociality’s impact on your sales team. You will need new talent, new systems, new metrics, and new sales management practices. You will also need to consider how the sales world has changed, and what the likely opportunities of a Hyper-Social firm look like. Sales used to be largely one-to-one, and to be heavy on educating the customer through catalogs, brochures, and documents. Indeed, the more complex the product or the more crowded the competitive set, the greater the amount of information needed to teach the customer how to use the product, how it solves their problem, and how it is better than the competitors’ products. Historically, sales has been a matter of matching demand with hidden, restricted, or dispersed supply (consider the collectible, real estate, and auction markets, for instance). Salespeople often used information inequality to their benefit as well; they typically knew much more about what they were selling than the buyer knew about what he was purchasing. The ancient statement caveat emptor earned its longevity through centuries of validation.
The relatively recent introduction of the Internet has changed much of this opacity and evened the information gradient between buyer and seller. Indeed, new technologies have changed the matching of supply and demand so fundamentally across so many industries that to many it seems as though the salesperson’s role is an endangered one. Given the ascent of powerful search platforms on the Internet, it appears that much of what salespeople used to do has been made irrelevant or marginalized. Sales positions in areas as different as commodity products and stock trading have been eliminated, adding support to the thesis that the golden age of the salesperson has ended.
But, just as technology and innovation have taken away from the sales profession, they have also brought new benefits. As our technical and communications systems have come to rely more on common standards and protocols (as opposed to the proprietary, closed platforms of yesteryear), the number of products that are available from multiple suppliers has exploded. The sheer number of brands (and brand extensions) has proliferated to what many consider a ridiculous extent.4 Globalization has added so many more products and choices for any purchase that the sheer scale of choice can slow or paralyze a potential buyer’s inclination to purchase. In addition, firms are increasingly buying more critical corporate functions as a result of outsourcing and seeking business efficiencies. The rise of practices such as “cloud computing” is emblematic of the new corporate behavior of decoupling important business processes from their physical or legacy businesses, and allowing a vendor to perform those functions at a lower cost and/or higher level of performance.
Thanks to social media, salespeople now have a rich new source of information about their customers and targets. As social media is increasingly adopted by organizations, salespeople will have unprecedented access to information about the target company, its issues, and the humans there who will be the actual buyers of products and services. The tribes that these people belong to will also provide insight into the philosophies, interests, concerns, and preferences of buyers. Organizations will need to learn how to learn from salespeople. Indeed, the sales force is increasingly privy to the sequence of events that noncustomers pass through prior to becoming customers. Will their own organization be aware of what its salespeople are learning? How will this information from the sales force be captured and communicated to other groups, such as product development, customer support, or knowledge management? Since human relationships become more important in Hyper-Social environments, won’t salespeople hold the keys to the kingdom, as they are the people who are trusted by the people who buy?
So, applying our view that business processes are generally improved by becoming Hyper-Social, what might happen to the sales function in the process? Social media can certainly help buyers make these sorts of difficult or high-risk purchase decisions, but you are relying on, among other things, your ability to adequately educate the community on the particulars of your technical requirements. Moreover, you may want to be circumspect in what you communicate to the community; given how critical these purchases could be to your company, you may decide that it is unwise to post these plans on a publicly available blog for competitors to see.
Perhaps, then, it would be better, from the Hyper-Social user’s perspective, to have someone who is more knowledgeable than she is, and who is dedicated to providing value over an extended relationship, inserted into the sales process. This person, who is deeply aware of the buyer’s specific and often idiosyncratic needs, and who has a vested interest in the long-term satisfaction of the potential buyer, is the sort of person the salesperson of the future may be.5
Also, this process that we’re describing assumes that the potential buyer has the time and inclination to even determine that he wants to buy. As the complexity of business solutions increases, as a result of collapsed cycle times and technological advances, buyers will find it increasingly difficult to scan the environment and match new solutions to present or emerging business issues. This proactive creation of solutions is another example of the critical role that salespeople will have going forward, and one that should increase the trust relationship they have with their buyers.
The defense industry, for example, has long been characterized by sales professionals who work closely with buyers to understand how a complex system can be conceived, built, and then configured. Typically called a “diagnostic” sales model, it requires the salesperson to act almost as an outsourced company executive, who needs to consider the buyer’s complex and unique interests, and then suggest a combination of her products (and perhaps the products of others) that will satisfy the buyer’s needs. Such a diagnostic system puts great demands on the salesperson: She must have a deep knowledge of the customer’s business, external factors, purchase systems, and the product’s relationship to the company’s business goals. She must juggle this constant learning about the customer with the need to hit sales numbers and to develop new leads. This is an area in which her employer can add unique value by providing the salesperson with the ability to learn even more than she could on her own through skills training and access to knowledge flows that she would not have access to as an individual.
An additional force that is at work in redefining the salesperson’s role is the transition from a “push” model of sales to a “pull” model that commentators feel is afoot.6 Given the unprecedented number of products available, some theorize that the old model of pushing products is untenable. Instead, assisting clients in pulling appropriate solutions to their complex problems will become another value that salespeople add to the ecosystem.
Another issue to consider is the ever-increasing costs of sales in most organizations. Burgeoning costs associated with travel, lodging, and entertainment—along with increasing concern about carbon emissions—will reduce the attractiveness of a sales-person’s actually being on the road more in the future. Leveraging Hyper-Sociality and using social media, Web conferencing, and social networks is potentially a superior replacement of these costs in many cases, permitting organizations to shift easily to more of an “inside sales” organization, and enabling sales professionals to do more with less during this recession of historic scale.
Emerging technologies, such as online virtual worlds like Second Life, also have the potential to bring more Hyper-Sociality to the sales process. We can only imagine how these virtual environments, which are much more interactive and social than static text or graphics pages, will even further enable the interaction between buyer and seller. Aside from the obvious parallel to real human interactions, the rich graphical environment will also permit rich product demonstrations, tutorials, and troubleshooting of complex products.
Research indicates that declining sales effectiveness was top of mind for CEOs as we entered the present global economic recession. Other data suggest that it is taking longer for sales professionals to get up to full productivity, and that the top-performing 10 percent of sales companies had the very highest level of Internet use.7 Based on all these indicators, Sales 1.0 is clearly not working as well as it once did, and a Hyper-Social shift, where buyers and sellers connect in tribes via social media, is a possible solution. Some of the most effective processes could include team selling and best practices sharing between salespeople and other business functions (such as customer support and marketing). Will your organization be able to lead this shift to Sales 2.0, or merely observe it?
Preliminary research indicates that there is a large gap between the promise that organizations see in Hyper-Social sales and what their ability to execute on that promise has been. For instance, looking at Figures 16-1 and 16-2, we see that although more than 20 percent of respondents in our 2009 Tribalization of Business Study identified “increasing sales” as a key business objective of their online communities, less than 10 percent of respondents believed that they had successfully achieved that objective.
Clearly, the process of Hyper-Socializing sales can be successfully implemented, but a significant number of those that attempt it fail to enjoy the desired outcome of increased sales. There are a number of factors that we believe will improve the Hyper-Socialization of sales functions going forward, and that will require organizational attention.
First, it is important to recognize that as the sales process is made a social process, it is likely that new salespeople will be created. Perhaps they will be the developers of related products who steer potential customers to a company via referrals. Perhaps product development or customer service staffers will show a strong aptitude for selling the product, and for matching it with
Figure 16-1 Business Objectives of Communities
Figure 16-2 Business Objectives Successfully Achieved
the proper client and client problem. We know that developer communities like the SAP Developer Network help to generate interest and product sales. Perhaps the new salespeople will be satisfied customers who tell other members of the tribe about their good experiences and the value that they received. The challenge for the organization will be to identify these new salespeople and provide them or buyers with additional information or support.
In addition, it is likely that the Hyper-Social shift in sales will drive the need for developing new metrics (instead of just simple sales numbers). Perhaps the salespeople may be measured in part on their net contribution to knowledge flows by populating knowledge management systems with client information, identifying the people in the tribe who are most likely to refer business, or identifying those who are most likely to buy in the future. Organizations should consider how to reward salespeople for assisting in product development or providing insights to marketing that can be used to develop richer conversations with the tribes.
The organization needs to consider other potential issues raised by a Hyper-Social sales shift as well. Since product development, marketing, sales, and customer service are all equally connected with the customer in a Hyper-Social market, the organization cannot divorce any one of these functions from the others and expect optimal outcomes. Since sales and the other functions will be having more conversations with the tribes in a Hyper-Social market, the organization will need to coordinate these more frequent conversations more carefully in order to bring value. Organizations will need to leverage information technology and knowledge management systems to permit employees to see all interactions with employees in sales, product development, customer support, and marketing, and to learn from colleagues’ interactions with the tribe. Indeed, customers and other members of the tribe may be having simultaneous conversations with multiple parts of the company. Such conversations almost never took place in the past in most companies. Now your knowledge flows and interactions with the client must be informed by what you just said to him today or what a different business function said to him a month ago. If a customer was speaking about product features with one of your colleagues in marketing this morning on a social network, and you are now helping him with a support question via Twitter, the onus is on you and your information systems to know that, and to know that the person is also an MVP in your support community. Anything less will demonstrate lack of interest in providing value, will hurt authenticity, and will be a harmful touch point in the series of contacts that build the customer experience and enable sales.
As the Hyper-Social shift continues, the sales function will likely undergo tremendous change. One critical change will be that fewer sales will take place one-on-one between a buyer and a seller; because of Hyper-Social behavior and social media, organizations will find themselves increasingly selling to people who reach out to tribes for guidance and information. As a result, sales terms, concessions, and prices are likely to be known not only by the buyer, but by her tribe as well. Is your organization developing salespeople with the right skills to close sales in such an open, transparent marketplace? Are your organization’s sales compensation plans structured to ensure the optimal use of your salespeople as information sources and external emissaries, or are they rewarded solely for closing a sale? Is your organization carefully considering how the sales force could be empowered to provide even greater value outside of the actual sale?