Sales Staffs: Adapt or die

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Patrick McCarthy started as a salesman with Cisco Systems six years ago. "In the old days we were order takers most of the time," says McCarthy, who as a region manager in Chicago supervises eight salespeople.

These days, thanks to the Internet, McCarthy says his salespeople have a new function. They now act more like consultants, spending more time talking strategy and less time pushing products.

"The guy who brings donuts to the manager of the plant floor and takes orders is going to disappear," says Dennis McCarthy, CEO of Paradigm Group, a Fairfield, Conn.-based sales consultancy.

A recent study, "Sales Competencies for the 21st Century," which queried 1,000 b-to-b salespeople, revealed that the top 50% listen beyond a customer's product needs.

"B-to-b salespeople used to salivate on cue when they heard a product need," said Nick Ward, CEO at MOHR Development, the Ridgefield, Conn., firm that prepared the study. "People who are successful today are holding back on that sale and being careful to craft a total solution for the customer."

Less effective salespeople simply sell whenever and whatever they can, he says. Ward also says the number of b-to-b salespeople whose only working purpose is to sell has dropped by one-third over the past five years, and will plummet another 20% in the near future.

"Every salesman is now working with fewer customers and higher volume numbers. So the number of salesmen on the street has been cut pretty dramatically," he said.

San Jose, Calif.-based Cisco, of course, is an acknowledged early adopter of Web technology, but it isn't the only company moving traditional sales functions to the Web. Other high-tech companies, such as Oracle Corp., have aggressive Internet-based sales programs.

And it's not just high-tech companies who see the value of online sales tools. From financial firms such as Fidelity Investments to manufacturers such as Bethlehem Steel, companies across the board have moved to automate sales functions on the Internet.

The result is that customers place orders, track orders and pay over the Web. Sometimes, customers even configure complex systems of products on the Internet.

These changes have altered the skills salespeople need to thrive. In many industries, salespeople are expected to know less about intricate product specifications and more about a customer's business.

McCarthy says this in describing one of his best new salesmen, Tim McAvoy: "He comes from a mustard company, so we put him on Kraft [Foods Inc.]. He doesn't know anything about the insides of a [router], but he knows how Kraft faces their customers and how their supply chain works. He thinks more about the big problems than what goes inside the box."

The Internet's key benefit is that it allows salespeople more time to do what they're supposed to do: sell. Cisco's Kelly McShane, another of McCarthy's salespeople, estimates he spends four and half days a week with customers. He spends the other half day in the office handling paperwork, a marked improvement from previous jobs, where two or more days a week were spent in the home office.

"After being at Cisco for 90 days, I had so much extra time on my hands, I had to really challenge myself to make use of it," McShane says.

He attributes the change to Cisco's Web-focused sales system. The question is, does more time spent with customers translate into more sales? McShane's boss argues it does.

McCarthy's group had a $50 million target for fiscal 2000. By February, they had already reached $46 million. "There are five months left," McCarthy crows.

Oracle faces decisions

Oracle's story is just as stark: In 1995, Oracle Corp. had $2.9 billion in revenues and 7,000 sales reps. Revenues have more than tripled in the interim, to $9.3 billion in 1999, but 14,000 reps--only twice as many--share the increased workload.

Moreover, Mark Jarvis, senior VP-worldwide marketing, said that despite the prospect of even more sales growth, the company's sales force will stay at the current number.

The Internet is driving Oracle's strategy. The company sold 25% of its software directly to business customers over the Web in 1999. This year it plans to sell 80%.

Recently, Oracle's salespeople have had trouble keeping up with business, forcing sales managers at the company's Redwood Shores, Calif., campus to make a decision. "We had two choices. Either get more reps or bring it all to the Web," Jarvis says.

To meet its goals, the company recently stopped allowing its salespeople to place orders, and poured millions into a buying site to make it easier for customers to do it themselves. Oracle's new program allows customers to get the same discounts online that they could only get from a salesperson.

This stripped an important tool from the reps. Some discount-dependent salespeople left or were asked to leave.

"We cleaned out the vicious salespeople that created a bad reputation for us. Let them go sell software for Microsoft instead," Jarvis says.

Oracle is asking its reps to sell without what Jarvis calls "a bag of tricks." It set up a Web site that lets them demonstrate software during calls. Reps show it to customers and then leave them alone to buy. The site will help keep sales up without a salesperson goading customers into buying, Jarvis says.

Chris Gartner, global account manager for Oracle's General Electric team, says that Oracle's internal use of the Internet has enabled its sales force to focus on the business of its customers. An Oracle intranet, with what Gartner calls a "sales dashboard," allows salespeople to access industry news, product literature and presentations, and sales forecasts through a single Web portal.

"I never sit on a five-hour forecast call anymore," Gartner says, "and it's the best thing that's every happened in my life."

The bottom line is that these Internet tools give Gartner--and other Oracle salespeople--additional time to spend with the customer. And, perhaps more important, that time isn't spent handling order tracking and invoicing, it's spent discussing the business problems the customer needs solved.

"It [the Internet] didn't turn me into someone who is more of a strategic thinker, it just gave me more time to do it," Gartner says.

Fidelity's biggest challenge

Fidelity Investments, the world's largest financial services company, in recent years tackled the biggest challenge in its five-decade history, online stock trading.

Pushed into action by competition from Web-only traders, such as E*Trade Group, old-line investment house Fidelity reinvented itself as one of the biggest consumer Internet brokerages.

Now Boston-based Fidelity is again remaking itself, this time leading the financial services industry by turning its institutional salespeople into Net-dependent consultants. Fidelity Investments Institutional Services Co.'s customers are financial advisers who manage money for the wealthy. Like all modern brokers, they would sink without understanding the Web and how to pick Internet stocks.

Recognizing this, Fidelity Institutional, a unit of Fidelity Investments, last year launched AdvisorXpress ( Advisers can get information on the site that they only used to be able to get from a Fidelity Institutional salesperson, including investment advice.

Fidelity Institutional's executives then decided that its salespeople could not keep up without becoming dependent on the Internet also. So it launched a sales force-only site and made it so the salespeople could not do their jobs without using it.

Reps must do career-essential chores, including registering for national sales meetings and taking broker examinations, over the site. "If you don't know how to use it, you can't take the tests," says Bill O'Grady, exec VP-sales.

By pushing its salespeople toward the Net, Fidelity Institutional is making them better at building Web stock portfolios. In a tech-driven marketplace, nothing is more important. "If you don't know how to use the Web yourself, how can you help your clients build their books?" O'Grady says.

Stragglers exist. "We have had a few people that are still slow to the party," O'Grady says.

Such salespeople are not unique to Fidelity Institutional.

Terence McPartland, CEO of Global Learning, says, "With what we've seen, one in 10 b-to-b salespeople are willing to 'get' the Internet. Forty percent would like to get it but can't for time and other reasons. And 50% are just clueless."

Bethlehem learns quickly

World War II was Bethlehem Steel's most productive time. It employed 300,000 and built 1,200 battleships. But now the steel business is not what it was.

Today the company employs 15,400. About 110 of them are salespeople, half the number in 1990, and more than there will be a few years from now, says David Beinner, senior VP-commercial. One reason for Bethlehem Steel's shrinking sales force is the company's enthusiasm for the Internet.

Steel reps have adapted quicker to e-commerce than most old economy pitchmen. And Bethlehem Steel's salespeople are perhaps the best adapters in their industry, probably because their company left them with little choice.

Bethlehem, Pa.-based Bethlehem Steel is a big investor in MetalSite L.P., a steel trading portal. Bethlehem Steel began selling over MetalSite last August; at about the same time, it began allowing customers to check order status over its own site ( The site's online order function, e-Charlie, is also used by reps to track customer information and prep for calls. Customers, after all, expect cyber-speed service, says Beinner, who started at Bethlehem Steel in 1966 as a Chicago sales rep.

All Bethlehem Steel's salespeople have had Net-ready laptops for several years; still, as with Fidelity Institutional's reps, some are skittish about the Internet. The company holds training sessions to prod them. "We make sure the folks who are less proficient get up to speed," says Kevin Spevick, manager of e-commerce.

Thomas Conarty, Bethlehem Steel's CIO, thinks all salespeople will have no choice but to see it this way: "There is," he says, "no downside to e-commerce."

'You're doing my job'

While an increased role of the Internet in a salesperson's life is a foregone conclusion, an important question remains: Does the Web make the customer happy? Cisco Systems has ample evidence that it does.

Kraft Foods, one of Cisco's customers, agrees that it is happier with Cisco's reliance on the Web.

"They [Cisco's sales staff] probably spend the same amount of time with Kraft as in the past, but the focus is very different," says Steve Finnerty, senior VP-CIO at Kraft. "Rather than taking orders, we're talking about solving problems. The discussions are at a much more strategic level around our networking needs."

Cisco is maniacal about its measurement of customer satisfaction. In January 1994, customer satisfaction with Cisco's online performance was 3.4 on a 5.0 scale, with 5 being the highest rating. In June 1999, customer satisfaction reached 4.19.

Noting that by ordering online customers are now doing for themselves what salespeople used to do, Cisco's McCarthy jokes, "You're doing my job and you're happier about it."

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