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Sales forces are growing despite the Web.

# 36 – December 2013

Multichannel strategies for B2B companies
The web has increased dramatically as a commercial channel in the last five years in Sweden – both as an advertising channel where the increase has been 89 % and as a trading channel, where the transaction value has increased with 79 %*.

Despite this, the number of B2B sales people has continued to grow, and at a rate faster than GNP*. The dramatic expansion of new technology seems to have had little impact on the sizing of sales forces. This seemingly illogical fact may be explained by the lack of top management involvement in Swedish sales forces. There seems to be little challenge to historical sales structures and methods.

There is lot to be gained in profitability and competitiveness by using new technology. We see three main considerations when complementing the sales force with alternative, less costly channels, such as web and tele-sales.

1. Customer size
When evaluating the customer base, one often finds a number of small customers. Does it make business sense to visit these? Might not a tele-sales unit be a more cost effective way to provide service? Might these customers be offered self service opportunities through a customer service desk or through the Web?

2. Sales activity
Do you have a complex sales process? Is a salesperson required to steer the customer step by step over a protracted period of time to eventually close the sale? This sort of business is strongly influenced by personal selling, but there may be opportunities to eliminate some of the costly face to face visits. The web or customer service may offer opportunities when placing orders or dealing with after-market requests.

3. The offering

Do you have a complex product (or service) offering, that requires you to qualify, influence and even educate the customers? Then it is usually required to have sales force working and visiting the customer base. What you should pay attention to is when the degree of complexity decreases over time. Then it’s more relevant to evaluate alternative channels. When complexity decreases, margins usually do as well, forcing you to more cost efficient working methods. We have found numerous examples of customers who have nursed an old perception of the complexity of their offering, and therefore stayed in expensive working methods, costing them profitability and market share.

A powerful multichannel strategy starts with analysing and prioritising the customer base, reviewing the sales processes and evaluating the product offering. After that you can make a conscientious and well-informed choice of what the best channel is to reach the customer.

*Data from Swedish trade organisations HUI and IRM, and from SCB – Central Bureau of Statistics