The Perils of Sales Specialization
According to many, the idea of sales specialization has revolutionized selling and is the defacto go-to-market model, particularly for SaaS companies attempting to “scale”.
The patois emitted by purveyors of this approach is seductive, pushing the hot buttons of today’s crop of MBAs who are chasing get rich quick schemes in the cloud. Data, process, scalability — it all seems so sensible. That is if you’ve never sold enterprise technology before…
What does it look like in reality? SDRs (sales development representatives) operating in boiler room type environments with scripts and training aimed at getting them to the point where they can get through a script without sounding like complete buffoons. Garbage “leads” that real sales reps have to re-qualify and discard after making the prospect repeat everything they told the SDR in the first call. Dialers going wild, struggling to make connects or SDRs doing 200 dials a day to have maybe 15 conversations.
To make this work, companies lowered the bar of “acquisition” to trial sales or low end entry prices which are “starter” packages that are seen as “land and expand” beach-heads. Customer “churn’, and somehow using that word makes it something that’s okay. I know of one such vendor who has over 40% churn after one quarter. Another with 200 trial clients that without a single one converting. Often, in reality, all they’ve done is change the value equation to the point where they can call a new signup a “customer” but haven’t bothered to actually solve a meaningful problem for the customer that they could charge a significant price for.
When I was selling ERP systems to small distributors (think your local electrical supply house who contractors buy from — say doing 5 million in revenue a year) if any of my customers wanted out after one quarter I would be under intense scrutiny for what I sold them and what they expected. Two customers? I’d be fired.
Now, however, is the point where you are supposed to dismiss me as some “old school” sales rep. A dinosaur or some other nonsense. No — I’m a guy who’s sold 80 million in technology/services with my own bare hands and recently brought an emerging SaaS company their 5th real paying customer, their biggest and the only one in their theoretical target market. I’m a guy who know’s what it’s like to generate bad prospects and have them never close because I “pushed” and wanted to hit my number for the right amount of meetings so my manager wouldn’t give me grief.
A little story. When I did a lot of phone prospecting (back when you could get a reasonable number of people on the phone) I boiled it down to a simple formula. 1. Establish rapport. If you do this enough times, you can establish rapport with a single offhand comment. 2. Make 2–3 clear benefit statements and offer some social proof/third party validation. 3. Close for the meeting/first call. 4. Handle the objection(s) that would come and close for the meeting again. I realized that I was selling meetings, not my product and after a while I became great at it. I got to the point where I could get a meeting with just about anyone.
But guess what? That didn’t increase my actual sales much, but it did give me great activity numbers. No, in fact, my sales only skyrocketed when I instead starting seeing that first call as a way of determining whether I wanted to sell to that prospect, choosing very carefully who I would invest my precious sales time with (because I had to live with them after the first call, not pass them off to a “closer”). And I don’t mean some cheezy qualification criteria like “BANT” but rather the profile and needs and other attributes of the prospect such as what they were using now, were they growing and other aspects I knew from selling to clients were highly indicative of whether I was a good fit for the prospect or not.
You see, I’d been trained in something called “Solution Sales”, something that today’s sales specialization has little encounter with. I saw myself as a professional problem solver for my clients. I developed real expertise in their businesses and understood how I could help them. I also knew that each one was different so I respected them enough to slow down and learn something about them before closing for the next step. I wasn’t running a sales process, I was solving problems for them.
Some interesting things happened. My prospecting calls became much longer. I often would spend 15–20 minutes on an initial cold call learning about a prospect. My lack of desperation born of my orientation towards my evaluation of them, and my consequent real interest in their business set them at ease and had them open up much more readily. And when I did the next call/meeting? It was me again and they didn’t have to repeat everything we’d discussed in the first meeting.
In fact, because I stayed with the leads I’d opened, I was able to keep a very consistent narrative going with the prospect. I built personal credibility that I earned with each step and also learned a lot about the people involved along the way. I was also able to refer back to the discussions we had up front to re-orient the prospect when the conversation started going sideways. In other words, I was selling.
Today? We are “SDRs” or “Closers” or “Hunters” or “Farmers” or “Renewal Specialists” etc. It looks good when looking down from the top but it’s a horribly inefficient process that buyers hate. Don’t believe me? Ask buyers— they’ll tell you that they cringe and are embarrassed for your SDRs and how useless they are. How frustrated they are at repeating themselves to the new people who appear throughout their relationship. And how they struggle to make your product work for them and how they tire of the stream of emails they receive hectoring them to “success”, which they know are mostly all about selling them rather than helping them.
It’s not just me who thinks sales specialization is highly problematic. I was gratified to hear Loren Padelford, the Chief Sales Scientist at Shopify, offer a sharp rebuke to the devotees of sales specialiazation. Listen to him here in the podcast he did with Bowery Capital. http://www.bowerycap.com/blog/sales/predictable-revenue/ He believes he does higher quality sales cycles, closes deals faster and serves clients more effectively by doing so, and with a lower cost of sales.
Hmmm. Turns out Boiler Room was actually a cautionary tale, not a training film…
