As the electrical wholesaling industry matures, the role of the salesperson will change dramatically.
Industry after industry is being consumed by technology. New products devour existing ones at an alarming rate. Deregulation has swept through the trucking, airline, banking, telecommunications and now utility industries, creating price wars, hostile takeovers and unprecedented turmoil. The pace is difficult to assimilate because it is stressful and it is accelerating. In the midst of all this chaos lie our customers and sales teams. What should we do?
The first step, as always, is to consider the needs of our customers. The second, which we'll explore in this article, is to understand that salespeople must specialize in value-added activities and not necessarily on products and/or geography. This represents a shift from traditional sales management theory and organization. Following are the four basic types of sales persons and some brief comments about their pasts, presents and futures.
Last of a noble breed-the route salesperson: Arriving early with a broad smile, shined shoes and a box of donuts, the route salesperson counts boxes, mingles with the natives and assures everyone, often simply by his or her presence, that deliveries will be on time, counts correct and prices fair. In the past, these valuable tasks were performed by a responsible person making good money who was of sound character but had little technical training.
However, evolution lacks compassion. Stuck between the needs of the few and the promise of more efficient organizations, most of these good people will eventually lose their struggle for survival. Companies can no longer afford to pay upper-middle-class wages for jobs that require lower middle-class training.
However, all is not lost for the route sales person. Computers are not without limits, and as long as relationships matter, infrastructure is weak, and outside influences (read price pressures) are minimal, the route sales person will retain his role (albeit diminished) in today's sales force. And, while growth in the number of route salespeople will be limited to low-cost, often hourly, personnel delivering commodity products to isolated or congested areas-not in the suburbs where growth resides-the route salesperson remains a viable sales option existing at the bottom of the sales hierarchy.
When it absolutely, positively must get there-the project administrator: Twenty four boxes must arrive from ten different cities on the same day or installers, at $65 an hour plus the cost of fork lifts, cranes, etc., stand idle. In this scenario, each member of the supply chain wants one person to call, one person accountable and one person to solve problems. Coordinating the application, pricing and (logically organized) delivery of several products and knowing a little about each becomes critical and, therefore, profitable. A project administrator is needed to manage the order because order management matters.
Project managers do not require advanced technical skills, but superior organizational and communication skills are essential. One option for employers, installers and users is outsourcing project administration to a variable-cost, commission-based solution, such as a manufacturer's rep or distributor. Unless project administration is a core competency, outsourcing may be the best way to reduce fixed cost from the supply chain. Automation can, and will, reduce the need for project administration, but only when each and every link in the supply chain automates. Like all chains, the supply chain is only as strong as its weakest link.
Project and order management equals cash management and therefore remains a mission-critical task. No one gets paid until the job is complete, and the job is not complete until the last widget is in place. Any gaps, real or imagined, require a project administrator's attention. The only question is not who pays the cost, but rather who is assigned the cost and whether it's fixed or variable. Project administration opportunities will follow the rise and fall of our economy.
At the bleeding edge of technology-the product specialist: During rapid growth periods industry profit margins and R&D expenditures are high. Technological advances come frequently, so customers require updates on product features and benefits. Salespeople are challenged to stay current and are consequently drawn into product specialization. They become experts because experts are needed. But growth has its limits and in most industries innovation ultimately slows, leaving highly specialized and compensated staff to perform project administration or route salesperson activities-an abuse of base cost and a sure morale buster. Therefore, for the good of the individual and the company, product specialists should not be migrated back into the general sales force. Instinctively, most product specialists know this and, given an opportunity to stay with their existing company as a generalist or move to another company with new technology, the allure of new "stuff" proves irresistible.
Fortunately, growth and innovation with the exception of a few industries have not declined or even slowed in recent years. So the prospects for product specialists remains exceedingly bullish for the foreseeable future, especially for those willing to travel, relocate and change employers.
Bringing it together-the account manager: The account manager's primary responsibility is to manage the relationship-the partnering-between organizations. As customers and suppliers experience the uncertainties of the information revolution, re-engineering and increasing litigation, relationship management becomes more challenging and critical, and thus, a higher value-added skill. It's the account manager who intimately knows the goals and personalities of the organizations involved and who matches the seller's capabilities to the buyer's needs.
Account management is the pinnacle-and future-of the sales profession. However, there is also a risk in providing a high-cost solution to a low-cost problem. The route salesperson will continue to fill specialized niches. Project managers will flow from the generally fixed cost, manufacturing side, to the often variable cost of the distributor or sales rep side of the transaction. And product specialists will continue to pay their way primarily with cutting-edge products. Prospects for the account manager only dim when customer needs are satisfied with a lower-cost solution.
Customers require highly skilled sales professionals to reduce costs, explain complex technologies, solve complicated problems and help maintain their existing customer base while creating new ones. Otherwise, they need a quote. Account managers, while expensive, are the best available option and are by far the fastest-growing segment of the sales world.
Decision point. Sales managers choose between being change agents or another provider of hardware. The hardware strategy limits customer selection options, differentiation, premium pricing opportunities, partnering synergies, and therefore growth. Hardware suppliers ultimately end up competing on price. And price wars ultimately end up being a long-term liquidation strategy-or death spiral.
Sales managers must understand the capabilities of the sales team as well as the needs and long-term value of each customer. Only then can a careful decision be made regarding the type of salesperson, or salespeople, assigned to each customer. Since customers seldom organize themselves into neatly defined categories, the sales manager's job may ultimately be the most valuable on the team.