What is Sales 2.0? Using Technology to Increase Sales and Cut Costs

» Posted by on Sep 7, 2012 in Business Strategy, Marketing | 0 comments

What is Sales 2.0?  Using Technology to Increase Sales and Cut Costs

Wondering what Sales 2.0 is?  Read on for an explanation: what it means, why it’s important, and how to do it.

What is Sales 2.0?

We’ve had Y2K, Web 2.0, disruptive technologies, and cloud computing.  Nobody loves a confusing buzzword more than high tech – and the latest seems to be “Sales 2.0.”  There is a recently published book by this title (see it here on Amazon ) but the phrase itself has been kicking around for a while.  Looking on the Internet for definitions of sales 2.0, I failed to find one that actually meant anything, so here’s my own attempt: Sales 2.0 means using available technology to cut your sell cycle.  That’s it.  But like most things, the devil’s in the details.

Customer Focused

One thing that the myriad of authors and bloggers defining Sales 2.0 seem to agree upon is that Sales 2.0 is a customer focused process.  “Customer Focused” is another buzz phrase that could really mean almost anything, but in this case suggests that a sales 2.0 strategy takes the perspective of the buying process rather than the perspective of the sales process.  From an efficiency standpoint, this makes perfect sense; it ensures that the sales person performs only those steps that the buyer needs completed in order to close a sale, no more and no fewer.  It also means, given current available technology and the reality of Internet research, that the marketing and sales departments work together to ensure that the customer can perform their own necessary processes as quickly and easily as possible.

How Sales 2.0 Works in Practice

The best way to understand a sales 2.0 strategy is to use an example.  Most people like to use “old school” sales vs. “cutting edge” to show a contrast, but I don’t think that really reflects current reality: few high tech companies still use snail mail for anything, and webinars are commonplace.  Still, a comparison can be made.   Most high tech companies we see use a blended 1.0/ 2.0 sales process: the web and/or an inside sales rep for lead generation, combined with face to face calls to do the final demos and training.  As webinar technology has become available, face to face meetings are less frequent.  However, in the high priced, complex product, high tech industry it is still rare to see a company use a true Sales 2.0 strategy.

Let’s look at an example.

Sales 1.0/2.0 process

1)       Marketing designs a website with information about the product.  This can be as simple as a product faq, or as flashy as online demos and videos.

Lead generation programs send suspects to the website to qualify themselves.

2)       Leads are identified by a more or less manual process depending upon the company: either they identify themselves using technology lead capture like a contact form on the website (2.0) or someone calls them and qualifies them over the phone (1.0.)

3)       Sales reps call qualified leads and offer more information about the product.  The customer asks price; the sales team is taught to deflect this question until a value case can be made.  Sales rep offers more training, either by face to face meeting (1.0) or webinar (2.0.)

4)       After selling the value proposition, sales rep steers conversation to “next steps.”  This is code for pricing, and the rep gathers required information such as volume and complexity from the prospect.  Sales person presents pricing by email or on the phone.

5)       Customer goes away to consider or to get approval from committee or department.  Since they have to get different quotes from different companies, and all of the high tech companies have basically the same process, they’ve gotten the red carpet value presentation from all competitors.  Sales reps from each company are competing mano a mano.  Armed with price quotes, the customer goes away to make a decision.

6)       Sales person waits, or pesters.

7)       Customer makes decision, initiating contract process.

A Pure Sales 2.0 Process

1)       Customer decides that they have a problem to solve.  They go on the Internet to research solutions, and find your company.  Your marketing team, well versed in Inbound Marketing, has beefed up the website to attract people looking for answers.

2)       Customer decides that your product might be interesting and looks for more information.  Marketing has set up a lead capture that trades valuable information about the customer’s problem in exchange for the customer’s name, phone, and email.

3)       Customer explores website, sees the product, gets pricing information, and decides if they can afford the product.  (Other companies won’t give them pricing until they engage with a sales rep, so they don’t bother; or they just post a request on LinkedIn and find out what other companies paid.  The LinkedIn community provides pricing info and gets to complain about the competitors’ product if they have had any problems.)  The customer discusses with department or committee.  They steer other members of the committee to your website to see demonstrations or group webinars of the product.   At that point, they have a few specific questions that need to be answered.

4)       Customer requests sales support using the website, facebook, twitter, or text; and sales rep calls them.  They do an online meeting, demonstrating product in more detail and answering technical questions.  This process may go back and forth several times.

5)       Customer makes decision and contacts sales, initiating the contracting process.

To “old school” sales managers who believe that prospects can be muscled into a sale by sheer force of personality, this makes no sense.  Where’s the sales rep in this process?  They aren’t steering the ship!

But that’s the point.  In a sales 2.0 model, the sales rep’s job is not to convince a prospect to purchase.  It’s to facilitate the buying process.

This means, of course, that your product has to be good.  It has to fill a real need.  It also means that there is a much greater reliance upon the marketing department to differentiate your product from your competitors and to provide impressive demonstrations and valuable information on your website.  But, there are some real advantages.

Advantages to Sales 2.0

1)       It costs less.  Your sales reps are more effective, they can handle more prospects because they are not chasing unqualified prospects.  The marketing is a greater investment, but it persists over time and can be built upon.  Many parts of the qualification process are automated.

2)       It’s predictable.  Customers can generally do a much better job of qualifying themselves than salespeople can.  When you let the customer request your help, you get better measurement and a more predictable close rate.

3)       It cuts the time that your rep is in the sales cycle.  Your rep is only in at the end, so their part of the cycle is short and reasonably predictable.

4)       Because your rep has fewer steps in the cycle to cover, they can give the (self-qualified!) customer white glove treatment.  Because the pricing information is all out in the open, they can’t negotiate or engage in high pressure tactics.  This means the rep focuses on differentiating the company by product and service.

5)       The customers love it.  They’re loyal, and they will advocate for you.

It may be tough to convince your company to use a true sales 2.0 process, but the advantages make it worthy of consideration.  Like it or not, the world has changed – your customers can get all the information that they want about your company from the Internet.  It makes more sense for you to be the one who provides it, and reaps the benefit of the automated process.

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