Apr 18, 2016

The End of Sales?

Traditional wisdom holds that companies grow on the shoulders of their salespeople.  When starting out, usually the CEO plays that role.  Then, over time, the company hires dedicated salespeople.  Later, it often brings in a Sales Manager to oversee them.  

But what if a company grew and grew and grew - without salespeople?  When, if ever, would it need to hire them?  Hook Studios LLC, an ad agency in Ann Arbor, MI, is testing that proposition.  The company has grown to over $11m in revenues in 10 years.  It has never hired a salesperson and does not plan to do so, according to a recent Crain’s Detroit Business article.   Its rationale: “Our clients became our salesforce”, according to CEO Michael Watts. 

The benefits of not hiring a sales force are clear on the expense side: No expensive salespeople demanding the time and resources of the people “who do the actual work”.  

But what about on the revenue side?  Here the results are less clear.  While one clearly can get to $11M in sales without dedicated salespeople, getting to $110M or certainly $1B is probably impossible.

A good hunter salesperson will consistently open doors with new prospects, and bring new clients into the company.  Certainly new opportunities can and often do happen through a referral network of past clients, but the pace of those referrals may not be sufficient to meet growth objectives.  Plus - it takes growth out of the company’s control and moves it to a 3rd party.  Perhaps not an entirely comfortable thought for the CEO or management who have their own growth targets.

Also, without this control over growth, delivery planning becomes more difficult.  How do I know whom I will need to service if I don’t have visibility into not only current accounts but also the sales pipeline?  

Another benefit that salespeople can bring is market intelligence.  When engaged in a bidding processes, a good salesperson can gather valuable information on what a company’s competitors are doing.  This can inform market approaches in the future, as well as product development initiatives. 

Whether you believe in investing in salespeople or not, this discussion raises the question of what their role is / should be.  I believe an effective salesperson is like a consultant, bringing welcome perspectives and insights to each client interaction.  The actual sale should be the natural result of the buyer / seller relationship. 

Are you a salesperson?  What makes you relevant to clients today? 

Or do you think salespeople are or should be a thing of the past? 

Interested in your thoughts!


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