Extinction Threatens Salespeople

Endangered species seeks better habitat. Photograph by Eustaquio Santimano.

Is the salesperson facing extinction?

The number of sales jobs in the United States — notes Slate’s James Ledbetter — has decreased dramatically in recent years:

From 1950 to 1980, sales represented one of the fastest-growing occupations in the country. In the 1980s, sales was by far the largest job-growth category, increasing 54 percent. That growth slowed in the 1990s, and by 2007, the number of sales job was shrinking. No other job category has experienced a drop this sharp in the same time period.

But at the same time, sales jobs still comprise 11% of the workforce — unchanged from 10 years ago.

What’s the conclusion to draw? Ledbetter, with props to Arthur Miller, concludes that we’re facing the death of many salesmen. What’s to blame? “The biggest culprit in killing off sales jobs is right in front of you: the Internet,” he says. In particular, he correlates the declining numbers of salespeople — from car dealerships to pharma — with the rising number of goods and services (music, books, stocks, airline tickets) purchased online.

Sales Isn’t a Zero-Sum Game

Enter Internet, exit salespeople? Not at all. In fact, I’d argue that Ledbetter is falling into the zero-sum thinking trap. Namely, he posits that there are a fixed amount of sales in the universe, hence with more sales happening online, the number of salespeople must decline.

But positing that the volume of sales in the universe is fixed is a fallacy. Otherwise, the economy couldn’t grow. Furthermore, nowhere in Ledbetter’s story does he talk about sales productivity. In fact, I’d argue that when it comes to charting the changing sales profession over the past 20 years, the story is predominantly about CRM-driven productivity gains.

Before: Going “Woodward and Bernstein” on Prospects

Days of burning shoe leather. Photograph by cliff1066.

To see why, flash back to the 1990s and my job — fresh out of college — selling middleware for Open Environment. Say you wanted to sell middleware to Caterpillar in Peoria, Ill. What did you do?

At the time, the sales rep job looked a lot like Woodward and Bernstein: staking out an organization to find the information you needed. You’d dispatch a salesperson to Peoria for 2 weeks, just to figure out what the sales opportunity might be. You’d order an annual report, which was already a year or more out of date. If you were lucky, it would list the names of a half-dozen executives. Contact details for crucial middle managers? Back to the stakeout.

Today: Sales Productivity Surging

Compare the pre-Internet days with today. Ignoring, for a moment, the improvements driven directly by CRM, SFA or having a 360-degree view of the customer, how do you research a prospect or customer? Hit LinkedIn, Jigsaw, Hoovers or follow a client’s Twitter feed, then bring up Google Maps to find the best route for 5 site visits in a day. Whereas 20  years ago, it wasn’t uncommon for IBM to put a sales rep in a cube in its customer’s offices, just to know what was going on.

CRM Spending

Now consider productivity gains driven by CRM. In 2010, predicts Forrester, organizations will spend $10 billion on CRM. I’d estimate that half of that goes directly to one of the major sales innovations of the past 20 years: sales force automation (SFA). Now, with that $5 billion in mind, say your typical sales rep costs you $100/hour. Accordingly, using SFA, companies expect to increase their sales productivity by 50 million hours per year, or 6.25 million days, allowing them to eliminate 28,400 sales jobs.

Again, that’s not the Internet eating away at a fixed sales capacity, but productivity gains, thanks to SFA, buying companies more selling power.