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One of the most common questions that I’ve been asked over the last few weeks is “what’s going to happen to field sales after the crisis is over?” The graphic below describes the challenge that most are facing:
It all comes down to how much of the activity that your traditional field sales force has been doing during the crisis in a “virtual mode” will it make sense to leave virtual when we return to “normal”. And, therefore, do you need to retain the same number of resources in your Outside (Field) Sales team?
We have noticed that when we are asked this question, our answer varies significantly depending on who we are speaking to. Interestingly, we don’t have a single answer to offer anyone who asked that question.
Sometimes when answers vary it’s because we are uncertain, but that’s not been the case with this particular question. Our diverse responses are due to the fact that “field sales” is a very broad spectrum, even within the world of technology sales.
Before we get into any predictions, it’s important to look at some further context on the evolution of the account executive role over the last few decades. There was a great Harvard Business Review article written on this topic back in 2013.
Up until the 1980s, virtually all sales roles in the technology industry were field-based. The reason for this was simple: Corporate IT’s primary role was to buy and manage complex hardware and software solutions, and the inherent complexity and cost of the solutions warranted face-to-face interaction.
Since the 1980s more and more sales functions have moved to office-based roles (i.e. inside sales) and to digital channels.
Fast-forward to today – a world where because of social distancing and travel restrictions, the future of field sales is being questioned more fundamentally than perhaps ever before. In order to predict what’s going to happen in the role of the Account Executive in the future, we are going to explore three areas of impact that the COVID-19 crisis is having on sales.
The statistics on the increased use of collaboration tools like WebEx, Microsoft Teams, and Zoom over the last month have been nothing short of mind-blowing. Buyers and sellers alike are embracing this new world; there are new normal practices that have become accepted on business video calls that would previously have been considered unacceptable.
There is absolutely no doubt that in the pre-COVID-19 world, meetings took place in person that could have just as effectively taken place using virtual collaboration technology, at considerably less expense.
We’re about to enter the period of the most sudden and impactful economic downturn that we have experienced in our living memory. As I write this in early May 2020, it’s becoming apparent that the impact is going to last longer than many of us had initially hoped.
It is hard, at this stage, to see a return to a world that we would recognize from before the crisis began. One useful data point around tourism and travel is seen in the figure below.
There have been times in the recent past when the industry predicted the end, or at least a serious decline, of business travel. However, what you see is that in each case there was a two-year “pause” before business travel volumes increased again.
Since the impact of the COVID-19 crisis started to become apparent, we have been running a series of polls to understand the economic impact of the crisis on companies across the technology and services industry. It was obvious from the outset that more companies were negatively impacted than those who were experiencing any upside.
The chart below shows the impact on technology bookings in April 2020.
As you can see, over 50% of companies experienced a decline in year-over-year bookings compared to 30% who experienced an increase over the same timeframe.
In this context we see most organizations looking to shift their focus to ensure that they are protecting the revenues they are receiving from their existing customers. This doesn’t mean that they don’t want new business, but in an economic pressure-cooker, which is what we are entering, it is vital to ensure that current revenues are not leaking out of the business.
There are three more strategies that we see being adopted by leading organizations to address this challenge.
At this time, perhaps more than any other, you have to think smartly about how you are allocating resources to the various revenue related activities that you are driving.
Increasingly expansion and renewal activity in existing accounts is linked to the value that the customer has realized from their existing investment with a supplier.
As you start to articulate and quantify the value that your solutions are delivering for your customers, you must make sure that this information is being fed back to your product, marketing, and sale enablement colleagues.
In very simple terms, the decision around whether a company will continue with a field sales team depends on a return on investment equation. Does the result justify the expense? It is pretty much universally accepted that field salespeople close higher value deals at a higher win rate than inside sales teams, but there are some great exceptions to this rule.
In order to try and make sense of the complex question regarding the future of field sales we’ve created a framework to describe the different kinds of outside sales roles that exist and what is likely to happen in the short to medium term.
We understand that our member companies, the technology industry, and the world at large have been impacted by COVID-19. Whether you are prepared for Revving or Retooling, now, more than ever, we need to work together to get through these challenging times. TSIA is committed to providing visibility as quickly as possible into the changing industry trends and practices that come as a result of COVID-19. Visit our Rapid Research Response Initiative resource page for more information.
If you have any questions related to how COVID-19 is impacting your organization, we’re here to help.
Post Date: May 14, 2020
Martin Dove is the vice president of subscription sales research for TSIA and brings a unique set of experiences and insights on outcome-based selling and subscription sales methodologies. In this role, he works with TSIA members to help them navigate the journey to being more outcome-based in the way they sell and to optimize their organization’s sales of subscription, or “as a service” offers, to both new and existing customers.
The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.