Death of a sales myth

Will the pandemic be the beginning of the end for the traditional sales model?

McKinsey published an article this week about B2B sales during the pandemic. It seems the forced shift to digital has resulted in better sales and marketing engagement across multiple sectors and countries.

This finding appeals to me. I have long held the view that tech will kill the old fashioned B2B sales model. By which I mean the dance of commission rewarded sales reps and hard ass procurement types. Exchanging pitch books, contracts and expense accounts. Going back and forward for months until they are ready to announce the deal.

A horrible way to do business

John Authers wrote about these problems last week. He is talking about selecting investment managers but the process he describes is familiar. So are the results - poor performance in the case of the investment industry. 

Lots of B2B product and service sales work this way. Its a horrible way to buy and an expensive way to sell. Customers end up with the wrong IT, your business ends up with unhappy customers that are hard to service. On a personal level, its a miserable experience to endure. Even when you win.

Yet until now, the tech sector has failed to disrupt B2B sales. Even supported it through a forest of CRM, sales and marketing applications. Worse, these types of models have become the recommended option for B2B startups. Sales quotas, pipelines, funnels and layers of organisations or roles are everywhere.

A turning point - time for disruption

Could this crisis finally be the turning point? I hope so. There has been a shift to digital interaction and it is working for B2B sales. Maybe the old world was not as good as everyone thought it was.

Its worth thinking about some of the ways this may change the model for B2B SaaS businesses. 

• Remote/ digital models make international markets more accessible. The network of personal relationships, local events and culture that makes B2B sales hard still exists. But there may be new ways to get inside.

• Creating authentic content will matter more than ever. User/ customer journeys through the digital world will be a much larger part of the sales process. We often talk about discovering customers. Switch to B2C mindset - its about the customer discovering your business.

• Think about the implications of this quote from Ian Stewart at Deloitte on business transformation. "In an uncertain world, investment and expansion are taking a back seat. Business transformation – digitisation, automation and streamlining – are the key priorities for investment in the next 12 months. This points to the possibly transformational effect of the pandemic in reshaping organisations and how they operate (something that is already being seen in relation to the structuring of work and use of office space)."

• Lots of businesses will still want competitive quotes. Current buying processes often feel like comparing apples and pears then buying bananas. How do you create a market that satisfies procurement but delivers better outcomes for buyers and sellers?

An opportunity for to build

There is also a massive opportunity startup here. McKinsey’s analysis concentrates on digital versions of the existing sales process. A much more insightful view was offered by Jason Fried in remote work is a platform. Doing the same thing but digital is a first faltering step. 

B2B Sales (and much else) will be digital when native tools and platforms are adopted. Some great businesses will be built by innovating to create the new digital world of B2B sales. I would love to hear from people who are working on this kind of idea.

Observations:

At a slight tangent to the article above. A VC offers a great example of why current sales pipeline models don’t work. The questions in the article that an investor might ask are insightful. Exactly the things that you should be thinking about anyway. Yet the sales pipeline template at the top of the piece gives none of the answers. You need to understand the assumptions not the numbers. So why not just ask the questions?

I lived in Africa for three years and as the saying goes, Africa gets in your blood. Three good articles here which show both the complexity of the challenge and the opportunity to learn from a part of the world we ignore too often:

Illicit capital outflows exceed aid payments to Africa. There is no point in sending more aid to Africa unless this is addressed. Hard problems will need long patient solutions. People die because we think going down the street to shout at a statue is making a difference.

On the flip side remittances have jumped 20% this year - reasons unclear. This is another vital part of the picture. One of the issues with aid is that it is rich Governments managing the economy of poor countries. Made worse by using bad local Governments as a distribution channel. It would be much better to follow remittances and be led by the needs of people.

What developing countries especially in Africa can teach about managing the pandemic. In all parts of the UK we seemed to have ignored these lessons. To compound the error, many countries in Africa will face a debt crisis that may impoverish millions. So once again the poorest will suffer from the mistakes of the rich world.