Are sales teams adding value?
For years, a good friend of mine (who owns Finished Basement Company) and I have debated the real value of commissioned inbound sales teams. He claimed his $10 million+ revenue company couldn’t survive without his coin-operated sales guys. Then about three months ago, after being sick of feeling like he was being held hostage by his 6-person sales team, he decided to let them all go and see what happened.
Instead of prospective customers going through a salesperson and being “closed” by them, they now speak directly with the basement design team. The designer asks the customer what they envision, what their budget range is, and then gives the customer a design. The customer then chooses to buy.
The process runs far smoother. There is much better service with all the communication going directly to the “technician” (the designer) vs through the sales person. Budget conversations are a straight forward matter of the design process vs. a chess match between seller and buyer. At the end of the day the client wins with a better design, better communication and better service.
What’s the difference in sales so far? Close rates and profitability have nearly doubled. Overhead is down, cost to the client is down and frustration with a pain-in-the-butt sales team is down to zero.
P.S. (added 5/26/11)
I’ll also add that the reason we had these conversations to start was because RegOnline started with a similar commissioned inbound sales team. I didn’t have the guts to amputate the whole team, but I did convert the team to a no-commission “Client Services” team and found better results at half the cost and none of the hassles of a commissioned team environment. We did experiment recently with SurveyGizmo leaving some of the inbound leads untouched by a human (and just get automated emails) and found that human interaction DID have a significant impact on sales and justified their non-commissioned compensation.