Rethinking the Sales Force: Redefining Selling to Create and Capture Customer Value

Rethinking the Sales Force: Redefining Selling to Create and Capture Customer Value

by John DeVincentis, Neil Rackham

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Sales forces that simply communicate value to customers are doomed to fail­­sales must begin to create customer value to survive. In today's markets, success can no longer be obtained by salespeople communicating the value of a product or service­­it rests on the critical ability to create value for customers. Enter Rethinking the Sales Force

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Sales forces that simply communicate value to customers are doomed to fail­­sales must begin to create customer value to survive. In today's markets, success can no longer be obtained by salespeople communicating the value of a product or service­­it rests on the critical ability to create value for customers. Enter Rethinking the Sales Force. In this book, best-selling author Neil Rackham and international sales and marketing consultant John De Vincentis have created a breakthrough guide for sales and marketing executives.

Rackham and De Vincentis help sales forces rethink and retool their selling strategies by introducing eye-opening insight for winning in the new marketplace.

"Of the many books published each year on marketing and selling, only a tiny fraction have anything new to say. This is one of them. It will radically change your thinking about your sales force, and even whether you need one."­­Philip Kotler, Distinguished Professor of International Marketing, J. L. Kellogg Graduate School of Management, Northwestern University

"A compelling premise. Without question, this is an important and useful book for companies serious about improving sales performance."­­Chuck Farr, Former Vice-Chairman, American Express.

"Sales forces of tomorrow will need to be fundamentally different from today. This book provides an interesting and valuable window into the future of selling and what the next generation sales force will have to do to prosper."­­Michael Graff, President, Business Aircraft, Bombardier Aerospace

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McGraw-Hill Education
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Chapter 1: The New Selling: From Communicating Value to Creating Value

Suppose some corporate Rip Van Winkle who fell asleep on the job 30 years ago was reawakening for the first time today. Looking sleepily around him, he'd find his organization so changed that it would hardly be recognizable. Wandering through manufacturing, he'd rub his eyes at the sight of strange new machines and unfamiliar technology. But, extraordinary as these innovations might be to Mr. Van Winkle, he would soon notice things that were even stranger. "Something's very different," he would mutter. The shop floor now looks more like a laboratory than the factory he remembers. The oil and grime have gone. So have the many piles of half-finished goods. But the biggest change isn't in the technology or the surroundings-it's in the work force. No rows of people working at single repetitive tasks. There's not one quality-control inspector to be seen. Where are the supervisors who should be giving orders? Who is worker, and who is manager? Instead of the old familiar hierarchy of command and control, people are working in teams; they seem to be making decisions for themselves. Groups are discussing problems and issues. That's a big change-talking on the shop floor was actively discouraged in his day. Nobody is standing around waiting for instructions on what to do next. In manufacturing, the fundamental nature of work has changed beyond all recognition.

It's a huge shift and more than Van Winkle can absorb on his first waking day, so off he goes in search of something more familiar. He heads for the typing pool, only to discover it no longer exists. He tries a succession ofother departments, and the manufacturing story is repeated. Everywhere he finds new technology, new processes, and-above all-a radically different approach to the nature of work itself. Everywhere? Not quite. The sales department, where he used to work, is much as it was when he fell asleep 30 years ago. True, most people now have laptop computers-although, curiously, many of these devices seem to be more for decoration than for use. And there are more women in the department. He's now a "salesperson" rather than a "salesman." But most other things seem familiar. The sales function is still organized into three groups: small geographical accounts, larger major accounts, and a modest number of very large national accounts-the exact organization structure that had first been announced the year he fell asleep.

Van Winkle Rehired. The company decides to offer Van Winkle his old sales job back, so out he goes with his new sales manager to see how much selling has changed in 30 years. He's pleasantly surprised to find that, compared with other functions in the company, selling looks comfortingly familiar. There is certainly a wider product range now, and individual products do seem more complex. Competition is intense, and things are faster paced. Customers are more demanding, although he reminds himself that they weren't always a pushover 30 years ago. The hard sell now seems to be officially discouraged, but even in the old days he preferred to sell through relationships rather than pressure. He's still expected to fill in call reports, although improved technology now lets him enter his lies and excuses electronically rather than manually. He's paid more than before, but unlike his colleagues in manufacturing whose whole payment structure has changed, he's still paid a base salary plus commission on sales volume. His sales manager coaches him in such familiar terms that it feels as if he'd never been asleep. She talks of features and benefits, of objection handling, of open and closed questions-ideas that were around 30 years ago. In fact, although Van Winkle doesn't know it, everything she advises him to do could have come word for word out of E. K. Strong's classic The Psychology of Selling, published in 1925. "Well," thinks Rip Van Winkle, "thank goodness that selling will always be selling. I could probably get away with it if I'd slept for another 30 years."


That's where he would be wrong. Irresistible new forces are reshaping the world of selling. Sales functions everywhere are in the early stages of radical and profound changes comparable to those that began to transform manufacturing 20 years ago. If he'd slept for another couple of years, Rip Van Winkle would find himself in a very different world. Most telling of all, he might not even have a job to go back to. By some estimates, at least half of today's selling positions will be gone within five years. Every aspect of selling is changing. Customers, as we'll see in the next chapter, are fundamentally changing their expectations, changing their patterns of purchasing and changing what they want from a sales relationship. Sales organizations are changing too. Time-honored geographical territory structures are disappearing. The segmentation of the sales force by customer size that has been a central organizing principle for so long-with one group selling to small accounts and another to large-is no longer a sufficient model. The role and nature of sales management is undergoing a transformation too, with a new breed of sales managers beginning to emerge. Technology, of course, is also a major force for change, both within the sales function and at the interface with customers. And, as we'll see in Chapter 4, electronic commerce, with the ballooning and bewildering variety of Internet purchasing options, is fast developing a capacity to change not only selling but many other aspects of our lives. But one change outweighs all the others. The meaning of selling itself is shifting. The very purpose of sales is being rapidly redefined.

Crossing the Threshold. In most companies-and Rip Van Winkle's organization would be an example-these changes are just starting to be felt. The typical sales force today is at that uneasy juncture where it's clear that life is soon going to be very different, but it is not at all clear what those differences will be, or what they will mean. Some organizations have already crossed the threshold into this new selling world. Van Winkle wouldn't recognize the sales job in these companies. He might not even call it "selling." For example:

  • Microsoft has a sales force that a few years ago was selling bulk software to corporate accounts in a typical business-to-business sale. Now they spend their time organizing and mobilizing a network of independent solution providers such as systems specialists, trainers, software designers, or installers. They are as likely to be selling with their competitors as against them. It's not even clear to a casual observer what they are selling or whom they are representing. The subject of Microsoft or Microsoft's packaged software products sometimes doesn't come up during sales calls, and when it does, it may sound more like an afterthought than the purpose of the call.

  • Enron, the energy company that started out selling and transporting natural gas, now has a sales force that is just as likely to be offering sophisticated financial instruments such as options, swaps, caps, collars, floors, or firm forwards. Listen in to an Enron sales discussion and the salesperson sounds more like a high-level financial specialist than someone from a company that sells gas and electricity.

  • IBM sent a team into Monsanto, the agricultural and pharmaceutical giant based in St. Louis. What were they selling? IBM hardware? Software? No, their purpose was to explore fundamental research issues on gene mapping in plant and animal cells. If you had been the proverbial fly on the wall during these discussions, they would hardly sound like selling. Yet out of these meetings came contracts to IBM worth several hundred million dollars.

  • Charles Schwab was a pioneer in telephone selling of brokerage services-call them and you'd talk with a broker [a.k.a. salesperson] who would transact your business. Now, if you so choose, you can dial up on the Internet and place your own trades. It's a sale all right-Schwab gets a commission from the transaction. But there are no salespeople, or people of any sort, involved in the trade. The sale is a totally electronic event.

    Applied Materials designs and produces chip-making machines that enable companies like Intel to manufacture their magic little slivers of silicon. Who sells these machines to Intel? Over a hundred Applied Materials people. But not through a conventional selling effort. Engineers, researchers, designers, technical specialists, accountants, and people from dozens of other disciplines all work with Intel on a daily basis to meet Intel's needs. Sit in on a typical meeting, and it's so integrated that you can't tell who comes from Applied Materials and who's from Intel. And you certainly wouldn't see anything happening that Mr. Van Winkle would call "selling." Yet those meetings are the sales relationship. The good old definition of selling, where a seller persuades a buyer to purchase goods or services, doesn't begin to describe what's happening.

    There's no doubt that something radically different is going on within sales relationships like these. But it's not simply that selling is getting more complex and sophisticated. It's not that the hard sell has become softer, that selling has a greater technology component, or that individual salespeople have been replaced by teams. These may be symptoms of change, but the causes are much more fundamental. Selling is in the early stages of a complete transformation...

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