Information symmetry has flipped sales on its head
I’ve recently read 2 books about selling: To Sell Is Human by Daniel Pink and The Sales Acceleration Formula by Mark Roberge. Pink’s book covers the cognitive science behind selling and how it’s evolving. Roberge’s book outlines a metrics-driven, near step-by-step playbook for the modern sales (with an emphasis on inside sales) organization. While the 2 books approach the topic of selling from entirely different angles, I found the underlying message of both books to be strikingly similar and incredibly thought-provoking.
This underlying message revolves around information symmetry and how the shift in symmetry from seller to buyer is flipping sales on its head.
It wasn’t too long ago when pushy stock brokers and sleazy car salesmen were real phenomenons, in fact they were ubiquitous. In a world where balanced, factual information was scarce, what a salesman could make you believe was limited only by their own ability to influence. Hence, pushy tactics wrapped into mantras like “Always Be Closing” was actually pretty effective advice for a budding salesman. It worked.
Oh how the world has changed.
With the Internet, you as a buyer are now incredibly empowered. For every pain point you have as a buyer, you’re now just a Google search session away from understanding all of your options and the key considerations for making a decision. In this new world, the information assymmetry that used to exist has largely been eliminated. Furthermore, feedback mechanism such as Yelp and Ebay Seller Feedback has armed buyers with yet another tool for keeping sellers honest.
The buyer now has the power.
So in a world where the buyer is armed with such incredible information, what is the role of the sales person? Some say — and my initial reaction is that I agree — that the value that a sales rep brings to any one transaction is, in fact, diminishing. Some of that value has shifted into the marketing function and the remainder of the value, the buyer, through their own leg work, gets to keep in their own pocket.
For example, let’s take an example of an IT security company. In the old world, an outbound sales rep would help a prospect identify security risks that they were not aware of (and truthfully may not actually have!), educate them on the different options (only those that the rep’s company sells!), and guide them into selecting a solution (that makes the rep the biggest commission!). In this case, the sales rep is working the lead from cradle to grave. The value of the lead was essentially 0 at the start and it’s now booked $. The sales rep, more or less, deserves all the credit. However, all this work did consume a lot of time. So the result, compared to today, was less volume but more sales rep value-add per deal.
In the new world, the IT company’s marketing org publishes content that finds its way to a prospect. The prospect then does their own research to validate and identify options. The sales rep gets involved only when the prospect crosses far enough into the funnel (i.e. solution selection stage) such that their close rate is relatively high. So before an actual sales lead was ever created, both the marketing org and the prospect themselves moved the deal down the funnel.
The sales process is rapidly evolving from an act of convincing to an act of information. The job of sales is not to influence so much as to be a trusted advisor. A great salesperson will connect the buyer to the right information when they need it. More than ever before, it is imperative for a successful sales rep to be curious, humble and to listen profusely. Influence is no longer the result of a clever sales tactic but instead it is born out understanding a buyer’s goals, the plan to get there, and then clearly identifying how your product can help accelerate that plan.
While content marketing is all the craze right now, let’s not forget that quality content requires people and time — both scarce resources. It’s unlikely that content can be created for every possible buyer context permutation — industry, company size, geography, cloud, etc. Moreover, even if that is a goal there will be lag time. The product is constantly evolving, the market is constantly evolving, and customer success stories keep trickling in well before case studies can be published.
There are a few areas of information assymetry left but even those seem to be diminishing. Product quality/performance is possibly one of them. However, in a subscription/service world, a seller’s incentive to oversell their product is evaporating as comp structures are being realigned to reward customer loyalty and penalize churn. Furthermore, no-risk trial periods are rapidly becoming the norm. Price is another area where a salesperson still has an advantage. But, even here we are seeing transparent pricing structures going more upmarket.
This notion of information symmetry flipping sales on its head extends to every product market. The markets slowest to adapt will be those with regulation (or atleast strong norms) protecting them. A great example is real estate. With Zillow and the like, a buyer can easily educate themselves on inventory, comps, and schedule open house visits all on their own. Again, an agent still adds value as a trusted advisor that can bring additional information symmetry to the deal. But it strikes me as questionable that the 6% commission structure is still deserved.
It’s pretty fascinating to me how information symmetry, driven by the Internet, has so fundamentally changed the art and science of selling. Some startups seem to believe that the trend will continue to the point that buyers can be sufficiently advised by AI-driven agents/bots, largely eliminating the need for sellers. I’m not yet a believer of that. I’m pretty squarely in the camp that it’s AI+human that is the winning formula, not AI agents alone. Even if the technology does an amazingly good job of servicing buyers with the optimal content throughout the buying journey, I think buying in many ways still boils down to a human interaction. Fortunately, because of the forces driving information symmetry ,the buyer-seller interaction is likely to be a lot more pleasant and productive than it ever has been before.