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Selling in 21 century mapping the transformations of selling final


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This paper presents the findings of a research project on sales management conducten in Central Europe, UK and the US.

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Selling in 21 century mapping the transformations of selling final

  1. 1. The 9th Sales Management Research Conference, Paris 5th May 2011Selling in the 21st century: mapping the transformations of selling and sales management Dr. Régis Lemmens Sales Competence Centre TiasNimbas Business School Tilburg University Dr. Javier Marcos-Cuevas* Centre for Strategic Marketing and Sales Cranfield School of Management College Road, Cranfield, Bedford MK43 0AL, UK Tel: +44 (0) 1234 752211 Professor Lynette Ryals Centre for Strategic Marketing and Sales Cranfield School of Management College Road, Cranfield, Bedford MK43 0AL, UK *Corresponding author 1
  2. 2. Selling in the 21st century: mapping the transformations of selling and sales managementAbstractOver the last decades, the changing role of the sales function has attracted a rich debatewithin academic and practitioner circles. In this paper, we aim to contribute to theongoing dialogue about how sales organizations are changing and the future direction ofselling and sales management research and practice. Based on a set of sixty sixinterviews with thought leaders from academia, sales consultancy and industry acrossthe US, UK and central Europe we argue that globalization, technology, changes inbuying behaviour and unprecedented levels of external and internal pressures areforcing sales organizations to revisit sales strategies, structures and practices in afundamental way. We claim that sales has been polarized between transactional andstrategic, having profound effects into the role and profile of the future salesprofessional. In the paper the challenge of reconciling and orchestrating disparate salesstrategies is discussed. It so doing, it is argued that companies need to consider theambidextrous sales organizations. The article concludes with an identification of areasfor future research with high potential impact in developing sales organizations.1. Introduction: Research on the changing nature of selling and sales managementSales has been recognized as an important board room topic for more than fifteen years(Shapiro, Slywotsky et al, 1994), although it is also said that many sales organizations –and, hence, their sales people - are still focused on the transactional (Piercy 2006) andoperating under management paradigms that may be outdated. In this paper we arguethat fundamental transformations in the sales environment (Jones, Brown, et al. 2005)are posing critical challenges that sales organizations need to address. Markets havebecome more global and the degree of connectedness across different economic areas isincreasing dramatically (Honeycutt 2002). Technologies are facilitating new ways ofworking and opening up new challenges for sales professionals. Business relations areincreasingly transcending relational approaches, and adopting new ways to co-createvalue (Lusch, Vargo et al. 2010). The creation of value increasingly rests on the abilityto engage in deeper customer relationships and in understanding the context in whichproducts and services are used (Ford 2010).Changes in the market have gradually triggered the evolution of the sales professionfrom predictable and structured set of activities (see Moncrief, 1986) to a complex anddynamic relationship manager role (Montcrief, 2005, 2006; Davies, Ryals, et al. 2009).This means that classic activities of selling primarily focused on the product or theservice, have evolved towards consultative selling roles, focused on the customerbusiness and on adding value beyond the product or service. However, despite a wideagreement within the academic community about the need for new mechanisms to addvalue, less is known about the personal qualities that underpin value-creating skills insales people (Flaherty & Pappas, 2008; Plouffe and Barclay, 2007; Tanner, Fournier, 2008). Selling skills have been extensively studied in practitioner and academicliterature covering a wide spectrum of aspects from self-knowledge (Frayne andGeringer 2000), cognition (Bonney and Williams, 2009), social skills (Merrill & Reid,1981), and the ability to conduct in-depth exploration of the customer (Rackham 1988). 2
  3. 3. Whether the set of skills of today, will still be relevant in the future and in new marketsis a question that requires further study.For over a decade, there has been much interest in mapping the transformations of salesorganizations to identify research in sales and sales management with higher potentialrelevance for practice. Arguably, the first such effort was the Faculty Consortium onProfessional Selling and Sales Management meeting of the American MarketingAssociation (AMA). In July 1999, the consortium met with a goal of building anagenda for sales research for the next decade (Marshall and Michaels 2001). Subsequentto the AMA symposium, a number of contributions have appeared in academic salesand sales management journals identifying key opportunities to move the field of salesand sales management research forward.Commemorating the 25th anniversary of the Journal of Personal Selling and SalesManagement in 2005 (JPSSM, vol. 25, No. 2), a special issue on Sales and SalesManagement research was edited. Overall, contributions to the special issue delineatedprofound changes in the environment that were affecting selling and sales managementover the last few years (Brown, Jones, et al 2005 – the changing env). In particular,increased customer demands, more intense competition, fast paced technologicaldevelopments and ethical and legal regulations are all having important implications forselling and sales management. Table 1 summarises the themes reported in four seminalpapers, addressing research in sales and sales management over the last decade.Sales Research Priorities Marshall Leigh & Jones, Robertson, and Marshall, Brown et Dixon, et Michaels, 2001 al, 2005 al, 2006 2001 Deciphering the transactional-consultative-relationship  selling paradigms Identifying, developing and embedding customer value  propositions Devising multi-channel and partnership strategies  Designing incentive schemes   The impact of technology, its degree of adoption in sales and    information intensity Sales force configuration and organization    Identifying customer segments and resourcing segmentation  processes Market adaptability; conceptual development and empirical  testing of customer/market oriented cultures Sales recruitment, training and development and key   attributes of sales professionals Customer relationship management and sales force   automation Mapping emerging customer demands and expectations  Cultural awareness in selling and managing customers  Development and implementation of sales strategies  Coping with compliance, regulation and ethics  Managing sales performance  Leading sales forces and developing sales teams  Widening the scope of sales research into the sales function  Table 1. Summary of themes addressed in key sales research agenda papersThere is currently still much interest in sales research, and valuable contributions arepublished to delineate important research areas for research and practice (Geiger &Guenzi, 2009). 3
  4. 4. Following, a brief review of the key trends and changes in sales and sales managementis presented. The authors then report details of how the study was conducted and thenature of the organizations and individuals behind the data set. Key findings arereported, followed by a discussion and conclusion on implications for practice and areasfor future research.2. Transformations in markets and the environmentGlobalization of markets and the economyThe business landscape in most sectors and across different economies has dramaticallychanged as a result of higher degrees of market liberalization in some sectors, andhigher levels of regulation in others. Large-scale mergers and acquisitions and arenewed effort, towards international expansion have resulted in higher levels ofconcentration in many sectors, re-shaping the competitive arena. Thus, traditional salesterritories are losing relevance that is being gained by regional and global customers,implying more strategic customer management roles may be needed in salesorganizations. Arguably, the concentration of key players in many industries is alsoinfluenced by new approaches adopted by purchasing organizations.Business purchasing behavioursIn industrial markets, most sectors have experienced a shift in the way customers, andparticularly their purchasing organizations, treat their suppliers. Fewer, moresophisticated customers have become more powerful and are seeking to achieve savingsand gain value by adopting supplier segmentation and other procurement strategies.This has often resulted in reductions of suppliers of up to 40–90% (Ulaga & Eggert,2006). Procurement has become a strategic function increasingly linked to thecustomer‟s business plan with responsibility for realizing higher profit margins,containing costs and contributing to superior shareholder value (Janda and Seshadri,2001). Increasingly, professional purchasing managers use complex sourcing metrics toselect the “right” suppliers, and dictating the terms on how they want to be supplied (DeBoer, Labro and Morlacci 2001; Talluri and Narasimhan 2004). Overall, buyers aredemanding more value, not just from the product or service but from the relationshipand want to access specialized supplier capabilities in the best possible terms andconditions.The migration of value generation, hitherto embedded in the product or service, towardsa situation where value is created “in-use” (Vargo and Lusch, 2008) poses significantchallenges to both customer and suppliers organizations. The latter, need to think howsales people can add value beyond the core offering; for the former, how to establishrelationships that will enable the customer to extract maximum value from product-service offerings. How sales professionals can both meet the expectations of moredemanding customers and at the same time contribute to the growth of their businesssustainably, remains an open one.Information and communication technologiesOver the last few decades, sales organizations have been subject to changes triggered byunprecedented developments in information and communication technologies.Tecnology is facilitating new ways of working and opening up new challenges for salesprofessionals. Traditionally, field sales professionals played an important role ininforming the customer about the features and advantages of a product or service. 4
  5. 5. Customers now retrieve readily-available information via the internet (Sheth andSharma, 2008). As a result, tasks such as retrieving information may be better carriedout using the internet, thus questioning the future of the traditional dimension ofinformation provision of sales people. Similarly, information systems are providingnew opportunities to store, synthesise and analyse customer information inunprecedented ways. Thus, customer insights are becoming an organizational capabilitywith CRM applications having grown significantly in importance (Tanner, Fournier etal. 2005; Arnett and Badrinarayanan, 2005)Technology has accelerated the evolution of the sales process, which is much less aboutselling a product by informing about its attributes and much more about co-creatingvalue through relationships at the point of use or application (Vargo and Lusch, 2008).Thus, essential information to manage sales processes is no longer generated bymarketing functions, but also by sales who are increasingly playing a knowledge brokerrole, gathering customer insights that can be input into market intelligence and the CRMsystems we referred to above.Advances in technology are not only facilitating customer interactions but also enablingsupplier organizations to have a better understanding of their cost structures andcalculate the profitability of their customers. Thus, marketing and sales investments inselected customers, segments and channels is increasingly being subject to morescrutiny and requiring more justification (Sheth and Sharma 2008).The internet has opened new possibilities to provide services to customer lessexpensively over the internet reducing the need of the face to face sales interactions.Technology has enabled many sales organizations to consider a reduction in the size offield sales forces in some sectors. It has also challenged sales leaders to think aboutwhere sales organizations should focus and about alternative mechanisms by whichsales can add value. As a result, an increasing polarization between transactional andconsultative selling is emerging (Rackham and DeVicentis, 1999).Overall, faster and more profound changes in the market place, more demandingcustomers, and more sophisticated technology-enabled customer interactions isquestioning traditional conceptions of selling and posing significant challenges to salesleaders in designing and managing sales organizations.In table 1, the key emerging themes in sales and sales management are identified.However, much of the debate about the evolution of selling and sales management isconceptual. Furthermore, the call for brining the academic research in selling and salesmanagement more closely in line with practice (Jones, Brown et al, 2005, p. 106). Thusthe authors embarked into an exploratory study that interviewed thought leaders insales. The methods adopted for data collection and analysis are presented next.3. Approach and methodsThe overall aim of this study is to explore how the sales role is changing in the 21stcentury and to examine the consequences of these changes for the sales organizationand for the practice of selling.In order to gain a wide and rich perspective of the changes faced by sales organizations,the research team interviewed 66 senior sales executives from industry, academia, salesconsultancy firms and representatives from sales associations across the US, UK andcentral Europe. Industry practitioners are key informants to provide insightful insider 5
  6. 6. perspectives (Hammersley & Atkinson 1995), whilst academics are often up to date oncurrent debates and topical issues affecting the world of sales (e.g. Robertson, Dixon, etal. 2006; Piercy & Lane 2005; Leigh & Marshall 2001). In turn, industry associationsand consultants are a source of valuable ideas and practices for the sales profession(Rackham & DeVincentis, 1999) and consultants in particular, are key players in themanagement knowledge market (Kipping & Engwall 2002)Several criteria were taken into account to select the individuals from companies toparticipate in the study. Interviewees had to have relevant sales experience of at least15 years. Senior executives, typically a Sales Director, Divisional Sales Director orSales Vice President, were targeted for interview. In the case of consultants, they werepartners or senior consultants in international firms specialising in sales performancedevelopment. Academics with an extensive track record in research, publishing, andlecturing internationally were also interviewed.A total of 37 organizations participated in the study where 25 were all majorcorporations (FTSE 350 or equivalent), with a field sales force of minimum 100 people,operating in business to business contexts. The rest were 8 were academic institutionsand 4 international sales consultancy firms and sales professional associations (see table2). In addition, sectors where well documented transformations have occurred weretargeted to conduct the study. For instance, the pharmaceutical sector was particularlyrelevant to illustrate the profound changes this industry is experiencing as a result ofregulation in health care. Information systems and engineering solutions are appropriatecontexts to illustrate the challenges of complex selling; fast moving consumer goods(FMCG) companies were selected to gain insights from a key sector in developedeconomies, often highly concentrated and in many instances strongly driven by price.Professional and financial services served to provide evidence of sales transformationsin contexts where solution and relationship selling are perceived to be critical. Sectors Number of companies IT Services 4 Telecom 1 Consulting and Professional Services 2 Financial services 9 Pharmaceuticals 2 FMCG 2 Engineering 1 Industrial and technical products 3 Energy 1 Academia 8 Sales Consultancies 4Table 2. Summary of participant organizationsThe interviews lasted an average of 70 minutes. All interviews were conducted face toface, which enabled a richer interaction between the interviewer and the interviewee(Shuy 2001). In all cases, the aims of the study were re-stated at the beginning of theinterview and the voluntary participation in the study emphasised. Interviewees wereinformed that they were not obliged to answer a question if they did not wish to do so.No interviewee declined to answer any of the questions posed. Permission was asked torecord the interview and all interviewees gave their consent.Interviews allowed the research team to ask questions to address changes in sales anddrivers of these changes, sales management processes, the role of the sales professionalsand associated competences. A semi-structured approach was employed, allowing theresearcher to explore the interviewees‟ views and experiences in more depth, and to 6
  7. 7. allow for other lines of enquiry to be pursued according to the circumstances (Kvale,1996). „Why‟-type questions were avoided as much as possible as they can triggerdefensiveness (Becker, 1998). An interview protocol was devised and was usedconsistently across all interviews. Over the course of conducting the interviews, theresearch team perceived a great degree of openness and confidence in thoseinterviewed. This is consistent with some of the reported advantages of this method ofdata collection. People tend to accept interviews readily as they often like talking abouttheir work (King, 2004).In analysing the data, special emphasis was placed on employing a systematic method tomake inferences from the text. This was accomplished through coding, where themesemerging from the data were identified and analysed consistently (Blaikie, 2000). Afirst set of 21 interviews were fully transcribed, and imported into the qualitativeanalysis package Nvivo (Gibbs, 2002). The use of software facilitates an audit trail ofthe analysis and adds reliability and consistency to the process (Lincoln and Guba,2000).An inductive content analysis approach (Patton, 2002) was adopted whereby themeswere allowed to emerge without pre-imposing a coding structure. Portions of interviewtext identified as representing relevant concepts are coded and labelled, and often keptas „free nodes‟, that is, separated from any emerging conceptual structure or hierarchy.Through an iterative process, emerging themes are tentatively organised into higherorder categories. As new text is coded, earlier categories are removed, revised, retained,and constantly developed into clustered themes. Through an iterative process, emergingthemes were continuously organised into higher order categories, which weresubsequently further grouped into dimensions and further clustered in high level themes.Two independent researchers reviewed the coding structure in order to enhance itsreliability. Comments were sought to detect instances of inconsistency and wherefound, they were corrected. Both researchers agreed the coding structure was well-founded, logical and suitable for the aims of this study. This procedure, although itcannot be considered a systematic assessment of inter-coder reliability (Neuendorf,2002), is thought to have added a reasonable amount of rigour to the coding process. Inaddition, results were fed back in a workshop to a group of sales executives whosecompanies had participated in the study. Overall, delegates felt the results wereplausible and a fair representation of the views they had expressed in the interviews.4. ResultsAfter the coding and the informants‟ validation of findings process described above theresearch team was able to synthesize five core themes that represent the fundamentalchallenges sales organizations are addressing or will be in the near future.The first category refers how customer purchasing behaviour has changed and the extentto which demands from customers have increased over the years across most business-to-business sectors. The second category refers to new trends in creating and deliveringvalue propositions. Third the re-definition of customer interactions and how the salesrelationships are changing. Fourth, our data suggested the emergence of a new role forsales, and fifth associated with this, a set of new he new key capabilities for future salesprofessionals (see table 3). Key themes Changes in customer purchasing behaviour Identifying and co-creating customer value 7
  8. 8. Key themes Re-definition of customer interactions Emergence of a new role for sales professionals New capabilities for the future sales professionals Table 3. Key themes emerging from the literatureChanges in customer professional buying behaviourA recurring theme across our interviews was the increasing power of buyers anddemands from suppliers. Our respondents outlined a number of factors they believedthat underpin the stronger position of the procurement function in many sectors. First,the knowledge economy has brought about more transparency and higher levels ofinformation of products and services that buyers use to their advantage. Availableofferings in the market place, their similarities and differences and even feedback fromcurrent or past customers are now easy to access and publicly available on the internet.Second, higher levels of buying power have resulted from larger, more globalcustomers, as a result of mergers and acquisitions and international expansion of keyplayers in many sectors. Fewer customers concentrate higher levels of sales volumes,giving them an opportunity to more strongly influence terms and conditions.The result of a more powerful position means they can demand more. And this is alsothe result of the customer organization asking the procurement position to add morevalue, to be more strategic, and overall, to achieve higher reductions in cost. A renewedfocus on ROI is driving companies to demand from their suppliers compelling andmeasurable evidence of the value the supplier is generating for the customer business.Corporate procurement has become a recognized function across businesses and theirstrategic role within the firm more widely acknowledged. This means more buyers arebeing asked to achieve and justify strategic contributions.Our data showed that the adoption of different purchasing approaches depending on thesupplier and product purchased, have changed dramatically over the last two decades. Inaddition, the notion of value creation is being widened, particular in a serviticized andknowledge-driven economy. The customer now has to be deeply involved in thecreation of value. Overall, many organizations we interviewed responded to this needby providing opportunities for joint collaboration and innovation or by adoptingpartnering approaches to offer superior solutions. This was recognised to be the trendwith strategic customers. As the Senior Vice president sales of a global FMCGcompany described, professional buyer behaviour “it’s changed dramatically. It used tobe you went in once a week, you sold the deal, here’s how much money I have, here’swhat I want you to do for it, yes or no, those days are gone, now you don’t sell weeklydeals anymore, you’re selling a joint business plan, annually or quarterly and there’s alot more negotiation because your negotiating with different assets”.Identifying and co-creating customer valueThus, a key emerging theme in our data was the need for identifying and co-creatingvalue for the customer. In so doing, a number of informants reported how their saleseffort was focused in offering customers solutions to reduce or optimize operating costs.The outsourcing and externalization of non core activities for the customer is anexample of how suppliers are adding value to the customer‟s business by optimizingcosts. Alternative to cost optimization, companies reported how their approach to createvalue had transcended transactional elements. As one of our interviewees of technicalproducts recognized, “as I said we don’t define sales, it’s called customer businessdevelopment because that’s the way we think of it, it’s not the transaction, we no longer 8
  9. 9. think of it as the sell, we think of it as creating a joint business plan with the that willultimately deliver joint value, value for the customer, value for us and we define valuein the broadest sense”. This value creation approach required higher levels ofengagement with the customer, an in-depth understanding of their operations, as well asinsights about current and potential future sources of income. Occasionally, suppliersrecognized that to add value they had to fully understand and even challenge thecustomer‟s business model.The interviews revealed a number of practices that suppliers undertake in order toidentify and create mechanisms to add value. Customer intimacy workshops were setup to find ways to improve customer service. Joint customer-supplier activities such asinnovation meetings were organized to create new value propositions or enhanceexisting ones. These practices were underpinned by a co-creation approach, i.e. value iscreated in the customer-supplier conjuncture rather than in a traditional way where thecustomer specifies the „value‟ they want and the supplier delivers that „value‟ accordingto specification. This raised a number of new challenges to suppliers and customersalike.A first challenge is that organizations require higher levels of collaboration andengagement to effectively manage the co-creation approach. In some occasions,pressures to reduce costs and customers‟ sole emphasis on price reduction underminedthe potential benefits of the co-creation approach. Interviewees recognised the co-creation model was not appropriate for achieving short-term gains and in purelytransactional relationships.A second issue, as one organization reported, had to do with the management ofexpectations from customers. The absence of formal agreements on the role of allparties involved in the co-creation process led to lack of clarity of ownership in theproducts and processes, which had a negative impact on some of their customers. Onthe other hand, interviewees acknowledge that the ability to co-create new products withcustomers can be used to enhance the supplier‟s selling proposition to attract newprospects. The co-creation approach raises questions of accountability, ownership ofintellectual property rights and also of distribution of value. If value creatingcapabilities of the supplier are the result of their engagement with a customer, thequestion that interviewees posed was the extent to which the customer could share thebenefit from the suppliers‟ future business opportunities.Overall, our data confirmed that co-creation approaches will become more widelyadopted, and that methods to identify and measure value will have to evolve. Forinstance, one of the participating organizations was considering using customersatisfaction scores as a way to determine the amount they would invoice the customer.Contractual commercial relationships will also have to develop to accommodate thenature of these new softer alternative measures, given their context-specific, evenrelationship-specific nature.Mechanisms to identify opportunities to add value will be at the heart of the future roleof sales organizations, an idea that is well encapsulated in the following comment froma large FMCG organization: “I think mostly a lot of retailers and buyers have datainformation that they are now able to turn into knowledge. I think that we now have tofind something else that we can bring to the party because that used to be our addedvalue and now without that added value we have to have something else that we canadd”. 9
  10. 10. Re-definition of customer interactions and sales processesThroughout most of the interviews, informants claimed that pressure to improve salesforce‟s effectiveness was increasing across a number of sectors. Overall, investments insales forces have been under scrutiny and their sustainability put into question with therise of alternative, cheaper channels. On one hand, there is recognition amongst seniorsales managers that the costs of transactional selling have to be optimized. Internet andthird parties like distributors and intermediaries have emerged as viable alternatives tooptimize sales costs. On the other hand, higher requirements for quality servicedelivery from powerful accounts, has suggested the appropriateness of investing incustomer-specific resources.A number of sales organizations in our study reported to be investing in high endcustomers, by appointing multi-functional teams to look after these customers. Thesesales teams often comprise several different specialists who interact with the customerto deliver integrated solutions. This requires coordination which depending on themarket is done by an account manager. In parallel, to be able to resource investments inkey customers, companies are increasingly serving the lower end of their markets withself-service portals, call centres and resellers, all of which are gradually replacinginternal sales forces. Overall, our respondents recognised that traditional transactionalsales forces will see reductions in numbers over the next few years.In a context were sales organizations have to streamline their processes for transactionalcustomers and invest decisively in top accounts, the data showed that the ability toimplement coordinated customer approaches through different channels becomesessential. It was revealed that this in turn, requires managing customer expectations andimplementing systems that bring together the different contacts that different functionswithin the sales organization can have with its customers. Companies reportedinstances where channels that operated independently from each other, resulted in lowerlevels of satisfaction and poor customer experience.One of the implications of aiming to achieve higher productivity levels in sales forces isthe formalization of customer interactions. One respondent described how salesautomation systems are increasingly dictating the frequency and nature (face to face vs.telephone or online) of the interaction between field sales forces and customers. Thus,personal relationships are being replaced by more formalized and controlled processes.Sales force‟s autonomy and flexibility has been reduced to ensure coherent andconsistent customer approaches across the sales organization. For sales people in manysectors, this has meant that they are no longer able to develop personal relationshipswith their customers by regularly visiting them, restricting the influence of personalcontact in buyers‟ decision making. As the national sales director of a pharmaceuticalcompany stated, “often another issue we have, very clearly, is access – actually gettingto see the customer. Doctors are very busy, they don’t necessarily want to see arepresentative”. Sales professionals have to find ways to increase the customer‟sperception of the supplier adopting alternative approaches to the traditional one ofbuilding personal relationships, as the director of the same pharmaceutical company putit “influencing people, different decision makers, the decision making unit’s changingwithin the health authority where it is now much more about value for money andpatient choice”. A number of interviewees described scenarios where new roles forsales people were emerging. 10
  11. 11. Emergence of a new role for sales professionalsA recurrent theme from all our interviewees was the dramatic impact transformations inmarkets and technologies have had in the nature of selling and the role of the salesforces. We have already reported how in many organizations transactional sales isincreasingly been managed through alternative channels, namely internet-enabled. Atthe other end, sales professionals looking after key customers are also experimentingchanges in their role. There was wide agreement amongst interviewees from industry,sales consulting and academia that the scope of the sales person is widening. As one ofthe interviewees put it, “the sales force becomes more enabled by technology and byinformation to be able to make the decisions to manage the customer, includingdecisions well above and beyond its traditional steps of selling. These are decisions thatreally involve everything across the spectrum from product design decisions, to pricingdecisions and so forth”.Higher levels of available market information, coupled with increasingly closercustomer relations, are encouraging sales professionals to take, or at least influencemarket-related, financial, even operational decisions. Furthermore, a shift towards aconsultative approach in sales is seen in many sectors as the result of clients expectingand demanding this type of relationships. In a number of sectors this means that thestereotype of the sales profession characterized by hard and persuasive tactics isopening the way to more understanding, collaborative and customer-centric salestechniques.For some organizations that participated in the study, customer centricity means thatsales teams are driving forward product and service development, the identification oflonger term business opportunities and the definition of renewed customer managementprocesses. Other companies reported how technology and knowledge is enabling salesprofessionals to make a wider range of decisions, such as financial (pricing), operationaland marketing-related.Another emerging transformation of the sales role is the internal dimension. It wasrecognised that whilst sales people have traditionally been focused on the externalcustomer, interacting internally with other functional areas of the organization willincreasingly become an essential part of their role. Our data revealed that in manyorganizations sales people are becoming the drivers of processes that link thecustomer‟s problems and needs with the internal configuration and resource base, inorder to develop solutions that create mutual value.Our research revealed a little-recognized consequence, which is that increased demandsfrom customers are gradually resulting in sales role that is able to combine a multi-partyrelationship manager role with that of an end-to-end delivery coordinator. Customersare requiring accountability and ownership of the entire process and value added to theend customer/consumer. This in-depth understanding, beyond the immediate customer,was reported to become an essential dimension of the sales role in technological, R&Dintensive and professional services sectors.New capabilities for the future sales professionalsThe role of the future sales professional appears to be one that will require constantdevelopment in the relevant area of expertise/business and in customer managementtools and techniques. In addition to sector-specific knowledge, future sales people will 11
  12. 12. have to cultivate customer relationships and at the same time, know-how to becomeconsultative sellers.Our analysis of the interviews revealed that there are four skill areas that are importantfor the future sales person: Functional, Relational, Managerial and Cognitive.Functional skills primarily refer to those that would traditionally be called „sellingskills‟, in the context of future sales professionals, skills that underpin the creation ofcustomer value. Relational skills refer to the ability to interact and connect withindividuals across boundaries and across functions. Managerial skills are general know-how related to the achievement of goals in organizations. Lastly, cognitive skills referto analytical abilities and the extent to which individuals can process and act uponinformation. Table 4 outlines key skills in each category mentioned by the interviewees.Functional Relational Managerial CognitiveFinancial insight Multi level and multi- People management skills Innovative problem functional relationships solvingBusiness acumen Understanding of human High ethical and integrity Time management dynamics standards and task prioritizationMarketing Ability to contribute and to Influencing skills Lateral thinkingknowledge work in teams (internal organization)Business opportunity Ability to integrate Openness to change and Mental toughnessdiscovery and marketing - sales efforts adaptability and resiliencequalificationStrategic negotiation Ability to inspire trust Clarity of communication(beyond price)Market and research Listening skills Time management skillsCustomer insight Business process understandingTable 4: Skill requirements of the new sales roleOrganizations recognized that the speed by which transformation in sales have occurredhave superseded their ability to develop new talent who can cope with the new contextof sales. The war for consultative selling talent across sectors is recognized as a realone, as illustrated by one of the senior business development executives of an IT servicecompany: “we want to be in the value added business where we’re helping achievedifferentiation, helping make our customers be more competitive, so the biggestchallenge is finding the people’s skills in the market place.5. Discussion and conclusionThe fact that sales is changing appears to be unquestioned by both existing contributionsto the academic sales research agenda and by practitioner insights from the ten sectorswe explored across the US, UK and Central Europe. There is wide agreement thatchanges in the marketplace (namely globalisation, concentration and regulation),technology and customer demands have impacted the way in which suppliers deal withcustomers. Our evidence suggests that a profound polarization between transactionaland consultative selling is growing in sales organizations. The question that emerges ishow sales organizations can respond to potentially diverging forces, ones pressing in thedirection of reducing costs to serve and others in the direction of co-creating superiorcustomer value. Sales executives need to reconcile this polarization of the salesfunction. However, there was not a clear or tried and tested model emerging in our data 12
  13. 13. about how to create value for the supplier organization with the top end accounts and atthe same time from lower end customers.A useful way of approaching how to marry high and low end customer managementstrategies is Treacy and Wiersema‟s (1993) value model. They argue that highlysuccessful enterprises focus on operational excellence, product leadership or customerintimacy, although only outstanding organizations can pursue more than one of thesesimultaneously. We chose to refer to Treacy and Wiersema‟s operational excellence ascustomer processes optimization, and customer intimacy as engagement in value co-creation to best describe the elements contained in these approaches that emerged fromthe data, which are outlined in table 5.Strategic alternatives Customer processes optimization Engagement in value co-creation Dealing with buyer’s behavior Provide ease of purchase, perceived Understanding of buying unit‟s and wider value for money. organization‟s performance criteria. Creation of customer value Streamlined value proposition. Expanded and differentiated value proposition. Delivers service via self-services platforms initiated by the supplier to Through co-creation of value initiated increase efficiency. jointly by the customer and supplier to increase the relevance and impact of the solution to the customer business. Nature of sales interactions Online portals or call centres. Managed by account managers, account teams and field sales forces. The role of the sales professional Product-focused and transactional Relationship broker, networking and Decreasing in size giving way to cheaper coordinating sales teams. Informing and channels. analyzing business opportunities. Project Back office customer care helping the managers customer to complete their transaction. Capabilities for the sales person Basic technical, product and market Advanced functional, relational, knowledge managerial and cognitive competencesTable 5. Elements of strategic alternatives for the future of salesFollowing Treacy and Wiersema‟s claim that both strategies are difficult to pursuesimultaneously, one would argue that sales organizations then have to follow either ofthe two. However, each of these strategic alternatives is fit for one purpose only: highor low end customers. Very few organizations in our study were in a position to addresshigh or low end customers only. Most of the companies we interviewed had disparatecustomer bases ranging from transactional, medium to key customers. This raises thequestion whether organizations can make compatible value creation via customerprocesses optimization as well as by engagement in value co-creation.Research in innovation has shown that in order to compete in the long term, companieshave to develop the ability for both exploring new opportunities and also for exploitingexisting capabilities. Exploitative activities are characterized by routinized andmechanistic processes to raise productivity and gain efficiencies. Conversely,explorative activities are associated with higher risks for failure, and also higherpotential gains (March, 1991). Firms that can simultaneously manage exploration andexploitation are referred to as ambidextrous (OReilly and Tushman, 2004; Jansen, vanden Bosch and Volberda, 2005). Ambidextrous organizations combine contradictorycoordination mechanisms that are characterized by decentralization, formalization andconnectedness (Jansen et al., 2005). Ambidextrous organizations often separatebusiness units focused on exploration from those with an emphasis on exploitativeactivities, allowing them to have different processes and structures, but at the same time 13
  14. 14. maintaining tight links across and high degrees of connectedness (OReilly andTushman, 2004).Implications for practiceWe have discussed how the increasing polarization between transactional andconsultative selling is resulting in organizations having to devise dual sales strategies,customer processes optimization for the low customer end and engagement in value co-creation for top end customers. We have drawn a parallelism between sales andinnovation strategies, arguing that both underpin the firm‟s ability to compete. We havealso suggested that guiding principles for configuring ambidextrous organizations mayhelp designing the future sales organization.Ambidextrous organizations require managers who have the ability to understand andbe sensitive to the needs of very different kinds of businesses. They possess bothsystematic analysis as well as free-thinking abilities. Ambidextrous managers break intonew business territories and at the same time maintain and defend traditional businesses.Similarly, the future sales organization will require sales leaders who are willing toexplore new ways of creating value, novel relationship models and innovative supplier-customer governing mechanisms. One such mechanism may be new contractualagreements that balance risk and gain sharing mechanisms. For activities with high endcustomers, traditional performance measures and monitoring systems may need to berevisited. The boundaries between supplier and customer are becoming blurred, andtraditional rivalry between suppliers may give way to networks of suppliers,underpinned by co-opetition (as opposed to competition) tactics that are instilled andfacilitated by the customer.In addition, sales leaders in ambidextrous sales organizations will have to impose rigidcontrol mechanisms to manage low end customers sustainably. They will need to beabreast of latest technologies to automate transactional activities, ensuring seamlessimplementation of these technologies. Tight definition of processes and adherence tothem will need to be instigated across the sales organization in order to minimize costs.Overall, future sales leaders will have to combine organizational separation with seniorteam integration, a key leadership challengeAmbidextrous organizations require high level of capabilities, such as the ones depictedin table 4. Thus, sales training and development will continue to be a requirement fororganizations that wish to be leaders in their respective markets. Sales professionals willhave to be discerning and flexible to perform their role according to the types ofcustomers they are dealing with. This will require advanced training and managingexpectations to avoid dissatisfaction amongst those performing potentially repetitivesales activities for transactional customers, and reward and to reward and recognizethose who may be asked to contribute with higher levels of commitment and dedicationto develop demanding, top end customers.Making compatible customer processes optimization with engaged value co-creationapproaches will eventually trigger the need of higher degrees of marketing and salesalignment, in a quest to ensure that product and services are conceived, designed,communicated and delivered in an integrated way to create a superior customerexperience. 14
  15. 15. Limitations and suggestions for future researchThe main limitation of this research is its context-specificity. Data is collected fromparticular organizations from mature markets, which makes the findings of the studyhardly generalizable to wider populations of organizations. In case study research,however, generalizability is not an aim, as the purpose is to understand a phenomenonin the context in which it occurs. Pettigrew (1985) argues that case studies are capableof developing and refining generalizable concepts and frames of reference (p.242). Thisstudy has sought to gain an understanding of the transformations of sales organizationswhich makes in-depth understanding more relevant than generalization. This supportsGummesson‟s (1991) claim that good descriptive or analytic language by which one cangrasp the important characteristics of the system, offers reasonable possibilities forgeneralization (p.78).The study has opened up opportunities for further research. First, replicating the inquiryin different contexts, such as emerging markets, could help confirming the adequacy ofthe sales transformations identified elswhere. The exploratory nature of the researchmakes it a good starting point for testing some of the findings in larger samples, usingquantitative methodologies. In particular, research aiming to understand theorganizational responses to transformations in the markets and their outcomes wouldilluminate an area much needed in practice.The specific challenges of sales organizations being organized around both customerprocesses optimization and engagement in value co-creation and how companiesmanage these diverse structures may provide valuable insights. In addition, the salesresearch community would benefit from understanding the complexities of managingnew more sophisticated sales roles, like those in charge of value co-creation. 15
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