“Don’t they realize that sales is not just about chatting over coffee like friends,” thinks the CEO, frustrated with a recent conversation over his sales teams’ expense reports.
“Don’t they realize that sales is not just about chatting over coffee like friends,” thinks the account manager, frustrated after listening to his regional manager pass on the message of upselling from the corporate office.
Two people, same organization, same statement. But in mindset, they could not be further apart.
When it comes to sales, there is a wide spectrum of opinions as to the importance of activities depending on the industry, region and local market. A retail salesperson’s activities and priorities are quite different from a car salesperson—just as selling in China is different than selling in Europe or the US. But when it comes to industrial sales, especially the industrial consumables market, the idea of a salesperson getting together with a customer and chatting over coffee (or tea, if you are in China) like friends remains the global standard.
The old “sales rep” has changed title over the years. They have become sales engineers, account managers, technical sales managers, etc., but overall the role has remained remarkably the same (even down to compensation systems), with the exception of more technically advanced CRM systems and that there is less physical “order taking”. So why has so little changed? Why hasn’t the old frustration between the CEOs and account managers of the world been resolved by now?
When looking at many of the industrial consumable markets, sales is not sales. Orders are predictable; they roll in daily or weekly from the customer, with no negotiation—just a fax, email or standing order. In this industrial segment, sales is not actually sales in the traditional sense. In this scenario, it would be impractical to employ a “salesperson” year round, knowing that that the majority of contract negotiations get done in the fourth quarter of the calendar year (and you can ignore anything after December 15th in Western economies).
So the CEO is right. The salesperson is traveling around only to stay in touch with his or her purchasing counterparts… and drink coffee. It is true that except for the period at year-end, the salesperson of the industrial consumable product has little to commercially negotiate and sell. He is even reminded of that fact by his customer, who happily tells him that he really doesn’t need to pop in every month.
But the account manager is also right. As he or she sits in the customer’s waiting room, they mentally review their notes. The coming meeting will be the same as the one as previously had that day—the customer saying “I like you personally, but your product is really a commodity and the competition is offering a 15% lower price and better packaging”. The quality control manager might be called to bring in the file with an open complaint that they’ll have to answer for and because the customer is polite, the salesperson will be offered coffee and small talk. But the importance of this interaction is difficult to measure in that the salesperson is in the business of time. Over the years they have built credibility, which eventually turns into patience bestowed by the customer in instances of invoicing issues, product supply problems, etc. That is the role of sales—not selling, but buying time.
New products get introduced, trialed and tested but in the industrial consumables market, adoption of a new product seldom happens instantly. It is likely a qualification process of many months and delays. By the time a customer approves the new product, it is seldom a sales negotiation and more of the customer asking “is that how expensive it is?” Does this mean that industrial consumer product sales teams should not be trained and taught new tactics? Should CEOs let them continue to travel around, drinking coffee and bargain for time? Far from it.
The trick to an effective sales team is to offer them support and the ability to act. Give a good sales team the liberty to act and they will bring the market share. If there are new products to launch, great—but they understand that most of the time they negotiate on constraints whether it’s not enough product, too much product, fluctuating raw material prices, etc. A good salesperson knows these constraints and seeks opportunities in them, provided they have the freedom to act. He or she also understands that “hunting” will always remain a part of the game, as customer erosion is a fact of life for any business. No salesperson can solely rely on their old base of customers.
Leadership is challenged to align the organization and its functions in such a way that the sales team can deliver against budgets. For that, the commercial team needs to be confident about what it offers, and feel it has a strong basis for a dialogue with customers. For leadership, it is crucial to ensure this is possible, as they set the tone for the interactions. Below are some tips to help leadership accomplish this alignment.
- Ensure the sales team owns the relationship with the customers, and has the ability to act. Also make sure they are trained to negotiate for time.
- Demonstrate to the team that leadership cares and understands the customer interface—and the importance of the interaction.
- Erase the notion that salespeople travel around to have coffee and small talk with customers. Drive them to optimize their network and not rely on their existing customer base.