Rep & Distributor Sales Jobs Evaporating – 1 Million More to Disappear by 2020

Data Suggests a New Blueprint for Greater Sales Success

Forrester Research logoA long and proud tradition in our industry is the narrative of the individual sales rep or distributor salesperson schlepping through wind and snow to meet with one of their dealers lugging product samples and marketing materials, pitching his lines, getting a purchase order from the dealer, calling the order into his manufacturers and thus earning a sales commission. But data from Forrester Research, Inc. released last year shows that this tradition is rapidly diminishing, with market trends projecting the elimination of as many as 1 million B2B sales jobs – like those held by sales reps and distributor salespeople – by 2020.

See this surprising data on the rapidly changing B2B sales processes…

The report from Forrester Research is titled Death Of A (B2B) Salesman and contains a detailed analysis of the forces at work causing a dramatic change in the business-to-business (B2B) sales model. To be clear, the Forrester research is referring to the B2B sales process in all industries, not just consumer electronics. But the research certainly applies to our channel as well – as do the trends they uncovered that are impacting the way products are sold.

It is also important to point out that this research from Forrester confirms much of our own investigation, including our own interviews with integrators, sales representative firms, distributors and manufacturers. Much of our research was conducted in conjunction with an article we wrote for Residential Systems about the proliferation of new manufacturer portals (password protected websites where dealers can purchase products) called The Rise of the Brand Portal.

Forrester conducted in-depth interviews with hundreds of B2B buyers, as well as with dozens of eCommerce businesses and sales professionals. The resulting data was used to build a model to predict future impact of further changes in the process. Their analysis clearly shows a once time-honored process going through gut-wrenching changes.

How much is the process changing? According to Forrester, “in the last 18 years, the number of salespeople per million dollars of real GDP in the US has declined by half, from 2.08 in 1995 to 0.98 in 2012.” Actually, that’s a decline by more than half. And applying their model suggests that another 1 million out of a total of 4.5 million – or 20% – of B2B sales positions will disappear by 2020.

Digitally Enabled Sales Process

Forrester’s research suggests a new “digitally enabled” approach to the process of selling to dealers (“Customer” in this graphic)

What’s driving these changes?…

To understand the forces shaping the future of our industry’s B2B sales processes, the best place to start is to look at the changes that have impacted the B2C consumer marketplace. Not long ago, when you needed to purchase an item, any item, you traveled to your local retailer, searched through a range of items on display to determine which best met your needs, paid for it, and took it home with you. Yes, there were catalog options, where you could buy items by phone or mail – but the vast majority of us purchased from local retailers or the nearest location of a mass merchant.

Depending on the type of item you were considering, you often relied upon the salesperson to introduce you to the item, explain its features and benefits, show other comparable models, explain their differences, and basically hand-hold you through the entire purchase process. Then, came onto the scene, rewriting the rules for searching out items, researching their features and specifications, and purchasing them.

It was not only Amazon, of course. But it is safe to say that the Internet has changed much of how we learn about products, research them, compare them with other options and – in many cases – purchase them. This phenomenon has reshaped the face of the retail landscape and many brick-and-mortar retailers are now promoting themselves and their products on the Internet, as well as selling them in their physical location.

Buyers, Dealers & Integrators Prefer to Research & Purchase Online

Now, it appears that – much like consumer buyers – B2B buyers prefer to research and purchase items for resale online. No more flipping through product sales sheets or catalogs to select the right model for your clients. No more scheduling appointments or phone calls with multiple sales reps from multiple lines to get pitched on what to buy. Buyers told Forrester that “gathering information online on their own is superior to interacting with a sales representative by a margin  of 53% to 17%.” In fact, 59% of the buyers surveyed by Forrester, “explicitly indicate that they do not want to interact with a sales representative…”

This finding exactly matches our research. Most of the integrators we spoke with clearly told us that they preferred to do their own research online. Many said that they are too busy either on a job site, or managing their businesses, to spend time setting up a physical meeting to get a pitch from a sales rep.

And the same was true with purchasing. They didn’t want to take the time to call up a rep and give a verbal order, or write up a paper purchase order to send to the rep…or to transmit through the decidedly old-school technology of the fax machine. From Forrester’s research, “93% of B2B buyers say that they prefer to buy online rather than from a salesperson…” 93%!

But Most B2B Sales Processes are Old School & Out of Touch with Dealers’ Preferences Today

Here then is the rub – especially in our industry. Most of our existing sales processes are still offline-centric. That’s right, for the most part reps still try to set up appointments for meetings to try and get orders.

And even though many distributors have websites set up for dealer purchasing, in many cases they are poorly designed and fail to take advantage of the latest personalization technologies such as automated recommendation algorithms and crowd review systems that buyers prefer to facilitate their decision-making process. Forrester discovered that B2B buyers feel that “product recommendations shown in websites are as valuable as recommendations made by sales representatives (50% versus 16%).

So we have a major disconnect. Buyers want to use higher tech, more contemporary self-serve processes to research and purchase goods from their vendors; but reps and distributors are, for the most part, still using old-school offline methods to service their customers. (Incidentally, Forrester does identify certain situations where dealers do prefer to work directly with a sales rep, but for the most part in most purchasing situations they prefer an automated solution.)

The Solution – A Hybrid ‘Digitally Enabled’ Sales Process

The Forrester report goes on to describe an entirely new solution that fully addresses the changed needs of the manufacturer-to-dealer sales channel. This new system is a sort of hybrid solution – a combination sales process with: 1) a high quality online web portal for research & purchasing; 2) inside sales (or customer service) teams for second-level selling; and 3) outside sales reps for use in certain specific scenarios.

As our Residential Systems article showed, many manufacturers and distributors in our industry are, in essence offering a partial solution, with online dealer portals where buyers can research and make certain purchases, along with factory-direct or independent outside sales reps. But this ad hoc solution that is only part of the way on the road to the most productive new sales process. And the mistake that many make is their solutions are not so much dealer-oriented, but manufacturer process oriented.

The Forrester report offers a more balanced and nuanced solution that better meets the needs of both ends of the sales process. A process, by the way, that still includes sales reps and distributor salespeople – but in tightly defined roles.

Get A Copy of ‘Death Of A (B2B) Salesman’

We have only scratched the surface of the level of information included in this incisive and detailed report on a new, more responsive B2B sales process. The information presented by Forrester directly tracks our own research conducted specifically in the custom integration industry. Forrester’s research and report is very readable, quite pragmatic, and in our opinion spot on.

We can highly recommend this report for anyone seeking to turbocharge their B2B sales process by reconfiguring their approach to take advantage of contemporary trends in buyer preferences.

Get your copy of Death Of A (B2B) Salesman by Andy Hoar here… Forrester offers this information-packed research report for only $499.

About Ted

A sales and marketing specialist - primarily in the technology industry - I've experienced a sort of "circle of life" in business. I've been a mass merchant retailer, a specialty retailer, a specialty manufacturer, a large volume manufacturer, a distributor, and even represented sales representatives. Now the owner of a marketing company that works with a variety of businesses on improving their strategic marketing and business development - I analyze issues from all angles to develop holistic solutions.

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