Companies & Industries

Sales Moves Beyond Face-to-Face Deals, Onto the Web


Sales Moves Beyond Face-to-Face Deals, Onto the Web

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Patricia Sims spent most of the past 20 years on the road, pitching software products. Two years ago she traded frequent-flier perks for a job that relies on Internet meetings and social media to woo new customers. “When I started in sales, anyone who did inside sales was thought of more as a telemarketer, someone who would call on consumers and bother people eating dinner,” says Sims, 51, who now works in Charlotte for ON24 selling services such as webcasting to businesses. “As time and technology progressed, it’s just made sense to do that big presentation virtually.”

From itinerant Yankee peddlers crisscrossing the U.S. after the Civil War to Dale Carnegie’s best-selling books on the art of salesmanship, American capitalism has often been driven by advances in the plying of wares. Arthur Miller’s 1949 Pulitzer Prize-winning play, Death of a Salesman, placed the occupation at the heart of the American middle class and its longing for social mobility. “By the mid-20th century, the salesman is really the center of what the country is all about and becomes sort of the archetypal American,” says Walter Friedman, author of Birth of a Salesman: The Transformation of Selling in America and director of the Business History Initiative at Harvard Business School.

Companies from software and health-care providers to manufacturers are radically remaking that model, shifting from expensive field staffs to more cost-efficient employees who use phones and computers to reach customers. Inside selling, which keeps pitchmen off the road, is growing far faster than in-person sales—and by some estimates it’s 10 times cheaper.

The U.S. will add about 1.9 million sales and related positions by 2020, including at the retail level, the Bureau of Labor Statistics said in its most recent outlook on job growth, released last March. Although the study doesn’t differentiate between inside and outside sales, the report said wholesale trade and manufacturing—areas in which inside sales make financial sense—will require about 223,400 additional representatives alone.

Steve Richard, co-founder of Vorsight, a sales training company whose customers include Verizon Communications (VZ) and Rosetta Stone (RST), says his data show that for every one person hired today for an outside sales role, 10 are being brought on for inside sales. “It’s absolutely shifting,” he says.

With virtual meeting software such as GoToMeeting.com and WebEx, communication tools such as Skype, and social media sites Twitter, Facebook, and LinkedIn, it’s become easier to sell with few if any face-to-face meetings, says Ken Krogue, co-founder of InsideSales.com, a Provo (Utah)-based company that provides technology for inside sales departments at companies such as AT&T (T), Cisco Systems (CSCO), and Dell (DELL). “The definition [of a salesman] is changing,” Krogue says.

Shawn Naggiar, chief revenue officer at online marketing company Act-On Software in Beaverton, Ore., says employees need to understand business and also be comfortable with technology. “It is sometimes difficult to find the person with the right skill set,” says Naggiar, who runs a 44-person department selling marketing systems to small and medium-size businesses.

It’s easy to understand why companies are tweaking the traditional sales model, replete with expensive company car allowances and plenty of lost man-hours while employees make all those connecting flights. Industry estimates show each contact with an inside salesperson might cost a company $25 to $30, compared with $300 to $500 for a field staff person with travel expenses, says Mike Moorman, a managing principal in the Chicago office of ZS Associates, which assists with sales force organization.

Cutbacks during the Great Recession helped galvanize a movement already enabled by high-speed Internet connections and Web-based tools, says Anneke Seley, founder of an inside sales consultant now called Reality Works Group. She changed the name from Phone Works last year to reflect the diminished role of the phone as the Internet became more central to sales. Seley says she started working in an inside sales group at Oracle in 1985, before the Internet was widely used, to sell programs to businesses for use on then-emerging personal computers. That department initially only identified customers and didn’t close deals. Eventually, hundreds of millions of sales at Oracle were done without the field staff, and now many companies no longer bother with outside sales, Seley says.

Managing change isn’t new in sales. Harvard’s Friedman says vending machines were once expected to eliminate the need for counter clerks, and advertising led to the assumption that people would get their information from commercials, not peddlers. “There’s always this idea that salespeople are going to disappear,” he says. One dramatic shift is that, increasingly, inside sales staff isn’t even at the office anymore. About 46 percent of such employees are at company headquarters, about 37 percent work both at the office and at home, and 17 percent work fully at home, according to data compiled by consultants at Bridge Group. Inside sales workers have an average base salary of $53,000 and total compensation of $98,000, according to Bridge data.

“There’s a huge challenge” in hiring employees for these jobs, says Larry Reeves, who helped form the American Association of Inside Sales Professionals three years ago to coordinate training and establish formal accreditation. Selling remotely often requires more of some skills (a better grasp of the product and its uses by customers) and less of others (entertaining clients).

Technology was one reason Sarah McMahan says she was easily able to switch to inside sales two years ago after six years of field sales at Corporate Visions, which works with companies such as Dell, Hewlett-Packard (HPQ), and General Electric (GE) to improve sales. McMahan, 40, says she returned to work after the birth of her third child two years ago. She was offered a job helping develop more sales leads, replacing frequent trips to the East Coast from the office in Incline Village, Nev., with virtual meetings and phone calls. “I can pick up my kids at the end of the day and then log on later to check on pending appointments,” she says.

Web selling can work even for purveyors of some unlikely goods. Eugene Ulrich last fall started an inside sales program at his family’s business, Ulrich Barn Builders, which operates seven stores selling barns, sheds, and playhouses in Texas. Ulrich says he closed about $60,000 in sales last month himself as he developed the new system; he’s training one salesman at each company location to sell its building services over the Web using online photography and other materials. For Web customers, the installation of the barn may be “the first time they will put a face to any representative from Ulrich Barn Builders,” he says. Still, brick-and-mortar selling has its place: “Occasionally I get a customer,” he says, “who really wants to smell the wood.”

The bottom line: Economics is pushing sales online. Handling a sale via the Web can cost as little as $25, whereas a traditional sales call can cost up to $500.

Green is Detroit bureau chief for Bloomberg News.

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Companies Mentioned

  • VZ
    (Verizon Communications Inc)
    • $48.87 USD
    • 0.05
    • 0.1%
  • RST
    (Rosetta Stone Inc)
    • $8.7 USD
    • -0.04
    • -0.46%
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