Resultsman’s Blog


Have Traditional Salesmen been morfed into Willie Lohmans?

Posted in Sustainability by resultsman on December 17, 2009
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Sustainable Solutions?

Have Traditional Salesmen been morfed into Willie Lohmans?

 

A paradigm shift is taking place. Certainly, within the geographical confines of North America, the issues confronting Willie Lohman, the central character in Arthur Miller’s book Death of Salesman, have never been more relevant than they are in today’s world of ecommerce.

I ask, are salesman still relevant in today’s selling models?  Certainly, the cost pressures driving business in general are forcing businesses to optimize their marketing and sales models. Witness what is happening within the pharmaceutical, chemical and automobile industries.   I contend that sale personnel are still relevant, but the role that they must assume in the business model is very different that it was even five years ago.

What does a sustainable business solution ask of a business?  Profitability, environmental

acceptability, and socially responsible….

Let’s explore the global dynamics.  A fundamental shift is taking place within markets. Manufacturing in all business sectors continues to migrate to sources of inexpensive labor in Asia. Pharmaceuticals, electronics and automobiles are all following this trend. Within a year we can expect that China will produce more cars than the US.  The $3.7 trillion demand and market for chemicals is certainly following this trend.  In the last two years, Asia ($1.3 trillion) has surpassed North America ($ 806 billion) as the leading region for the demand of chemicals.  This gap will continue to widen through the economic recovery.

Here is what we can expect- Demand for chemical products will decline in Western Europe, remain flat in North America, and grow dramatically through Asia.  On a segment basis, through all regions, we will see growth in the demand for pharmaceuticals, pharmaceutical intermediates, and specialty chemicals along with a decline in the demand for industrial chemicals.

So what will the implications of these trends be? Limited “organic” growth- 2 to 3% through North America. Ultimately I suspect that this will mean that there will be a greater need for M&A activity in order to maintain the “business side” of sustainability.  With mergers come consolidations and fewer sales representatives.

Profitability- Certainly employing a sales model that uses fewer salesmen, and accomplishes a business’s sales objectives will meet the business sustainability criterion. 

Within the pharmaceutical sector, we are witnessing a shift in who controls what drugs are prescribed.   Costs are dictating what products are used.  In effect, our primary care physicians as losing control in favor of the payers or insurance companies who are dictating what they will pay for a treatment.

Here are some facts- Pharmaceuticals- Fewer primary care physicians per capita have less time and take less time to visit with the traditional Pharmaceutical representatives.  When they do see a representative, doctors remember less of the encounter than in the past. The net result, less impact on the part of a sales representative. 

What about the chemicals? How many unaddressed solutions are there out there?  My contention is less now than in the past. The real opportunities will be in areas that are really the best environmental solution in the case of inorganic chemistry or adopt renewable, sustainable raw materials as a part of their solution… reduced VOC emissions in use or a favorable carbon footprint resulting in lower CO2 emissions.

A greater percentage of commerce in the chemical industry is being transacted on-line. There are less people available and willing to see sales staffs.  Those that do see a sales person, often devote less time to the calls because they have other duties.

 Today’s customers are better educated and know more about company’s products when they do make contact with a sales person.  Sales personnel must truly be experts in their fields if they are going survive. Correspondingly, they need to penetrate to the level of the decision influencers like research or formulating chemists in order accomplish their objectives.  

The world has reached a point where marketing and sales are truly intersecting?   Think about this, marketing is defined as creating the conditions that make a customer want to purchase a good or service. Web sites are doing this.  Transactional functionality is accompanying the educational focus on many web sites.

Finally, the social aspect of this entire new business model is yet to be defined? Are corporations our brother’s keepers? Certainly, unstated social contract between corporations and employees is a thing of the past.  In all too many instances corporate citizenship was a means to an end. Local plant employees were active in local civic organizations in order to promote and prevent issues. I can’t really say how altruistic the renewed efforts accompanying sustainable business models really are.  

In summary, previously, sales people where a primary source of information about the products that they sold. Today’s customers are better informed before they ever make contact with a sales representative. They are likely to already have accessed a company’s web site to learn about products and be in a position to make buying decisions.

I ask you, Willie Lohmen?  Probably not, but certainly there will be fewer representatives operating in new more encompassing roles. More will be expected of fewer individuals with less supporting help.

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