Save Digital Assets, Cut the Frontline
After reading this, my friends in sales might not like me anymore. So here it goes: During times of economic constraint and market upheaval, CEOs need to make dispassionate cost-cutting decisions to ensure the survival and revival of their business. That’s why those in customer-facing, field sales jobs should be replaced with ecommerce talent.
In terms of cost-cutting, it just makes sense. Salespeople take up a lion’s share of the payroll — some are the highest paid employees in a company—and their overhead can consume up to 30% of the cost of deal closure or acquisition. Contrast this with digital marketing, inside sales and e-commerce transactions. We’re talking pennies on the dollar in cost of sales.
The stars are lining up for companies to accelerate their move to more efficient, profitable, automated and even more personalized engagement.
The main reason is that customers are increasingly (with the lockdown) searching and sourcing products online and want on-demand interaction with brands any time of the day or night. According to Forrester Research, a whopping 68% of B2B buyers found going online superior to interacting with a salesperson, and 62% said they could finalize selection criteria or vendor list solely on digital content.
Companies haven’t missed the signs, either. Brands are investing heavily in the digital sales and marketing channels, and also boosting their e-commerce business through their own websites and those of portals and channel partners.
The goal, of course, is to leverage digital marketing content and channels to transform the path-to-purchase and convert more prospects into e-commerce transactions. B2B e-commerce is expected to reach $1.8 trillion and account for 17% of all B2B sales in the U.S. by 2023. While only 5% of revenue at most B2B companies trickled through e-commerce last year, this number is expected to grow to 50% in the next couple of years and 70% down the road.
On the sales front, 42% of B2B companies planned to decrease investments in field sales reps, with 13% shifting those resources to less expensive inside “digital” agents and AI assistants, according to Forrester.
Here’s the kicker: These studies were done before the pandemic made everything digital.
The biggest roadblock for transitioning from field sales to e-commerce has been corporate culture. That is, companies don’t like to alienate the “point of interface” with the customer in case they take their services to a competitor. Unfortunately, “customer handling” is no longer what it used to be as business and relationships become more virtualized and automated. Buyers are also changing the way they shop, source, procure and put out bids for products or services.
Moreover, CEOs often come from the sales ranks and have a heightened sense of a salesperson’s value. They understand what it takes to pitch a product, nurture a relationship and land a sale. Not many people can do the job, which is why successful salespeople are paid handsomely. Simply put, CEOs are reluctant to transition away from what they know best.
To be clear, this blog post isn’t meant to be a modern telling of the death of a salesman. At many companies, digital marketing efforts and ecommerce aren’t going to cut it. There’s room at the top for the high-powered, consultative seller.
Complex goods and services still require salespeople with deep product knowledge, business-outcome strategy and customer insights, in order to piece together solutions. These deals usually have long sales cycles and more informed people on the buying team.
On the other hand, companies with less complex selling scenarios should be marching double time toward ecommerce.
Seismic changes are afoot, and the pandemic has upended the status quo. The coronavirus is rapidly ushering in the age of the low-touch economy and all-digital selling. If you’ve been hesitant in the past, now is the time to make dramatic changes to your business.
And you can honestly do so in the name of cost-cutting, customer acquisition and business survival.