Sales and Sales Management Blog

October 28, 2007

Personal Marketing is Dead: Companies are Making Salespeople Obsolete (the fifth in a series on personal marketing)

Filed under: Personal Marketing,prospecting,Uncategorized — Paul McCord @ 9:22 am

In the last post in this series, I briefly examined how the flood of information now available to consumers is changing buyer behavior.  No longer do consumers, individuals or business, need salespeople to provide information and give advice and counsel in the decision making process, encouraging a larger and larger number of consumers to try to by step salespeople and make their purchases, even the most sophisticated purchases, without having a salesperson involved.

Naturally, this change in buyer behavior hasn’t gone unnoticed by companies.  Certainly there have always been companies that chose to cater to the do-it-yourself buyer in many areas of the economy.  Particularly in fully commoditized products, companies have been fighting for years over who could provide the cheapest price, package the most “value,” or provide the easiest purchasing experience.  These companies have for the most part been in the retail industry with brick and mortar storefronts or within the mail catalog segment. 

Most of these companies hired “salespeople” to handle the customer purchase.  Although many times given the title of “salesperson,” their employees were clerks or customer service reps who simply took the order.

Companies catering to buyers seeking to make their own purchasing decisions without the involvement of a salesperson are no longer relegated to the traditional commodity industries.  Today, consumers have the option of going on-line or calling an 800 number and executing a purchase of almost any product or service they could possibly want.  From investments to insurance to financial plans to counseling to medical advice and diagnosis to virtually any technology product or service and everything in-between, consumers can find companies prepared to meet their needs, no salesperson involved. 

The number of companies redesigning their marketing programs or new companies specifically designed to meet the wants and needs of this growing segment are multiplying rapidly.  Literally thousands of companies either have sprung up in the past four or five years or have completely redesigned themselves to address this market segment.  Moreover, the number of companies grows daily.

Many of these companies simply make the execution of the purchase available to the consumer.  The more sophisticated make available even more information to consumers about the product or service the buyer is contemplating.  Those companies that do give value-added product or service information guidance do so through articles, e-books, white papers, videos, and podcasts.  And unlike the marketing of the past where companies tried to emphasize the superiority or the benefits of their products and services through brochures, fliers, and overt ads, these companies now primarily market through providing information produced by independent experts. 

Even companies catering to do-it-yourself buyers recognize the increasing need to supply advice and guidance not by salespeople and not through marketing, but by using experts to help the buyer make their decision.  Of course, the traditional brochures and fliers still exist, but they are ancillary to the expert information the company provides.  The focus isn’t on their products or services, at least not at first, but rather on supplying the information do-it-yourself buyers seek—and the information these consumers seek isn’t company-generated information. 

Buyers have increasingly grown to distrust the information and advice supplied by salespeople.  Prior to the information explosion that has made it possible for consumers to make even the most complicated purchasing decision on their own, consulting with a salesperson was necessary.  Most consumers simply had to rely on a salesperson for both information and consultation. 

No longer. 

With the proliferation of “unbiased” and “objective” information available to the consumer has come an increasing distrust of the information supplied by companies and their salespeople.  Growing numbers of consumers want and demand the information they use to make their decision come an unbiased expert—a source they recognize as highly knowledgeable and reliable.  These, they believe, are not salespeople.  Rather, these knowledgeable and reliable sources are the ones writing the articles and books, the ones quoted and interviewed in the newspaper and magazines, the ones who have a public reputation and image within their industry.

So, the companies catering to the do-it-yourself buyer make these experts materials available to their consumers.  Salespeople don’t sell for these companies, information sells.  Rather, the perception of information sells.  After all, a company wouldn’t provide “unbiased” and “objective” information that gives specific recommendations if the company’s products and services didn’t meet the expert’s requirements, would it?

Although thousands of companies have converted to catering to this rapidly growing segment of the market, thousands of others are taking a more conservative approach by creating a new marketing channel within the company to cater to the do-it-yourself market while still maintaining their traditional sales force.  These companies seek to have it both ways—capture both the new do-it-yourself consumer and the traditional consumer also. 

Although they believe it expands their marketing reach and prepares them for the continued expansion of the do-it-yourself market, it also serves to undercut their traditional sales platform.  Their traditional buyers want the same deals the company offers its do-it-yourself buyer. 

The attraction for the do-it-yourself buyer—besides the perceived advantage of making a decision based on objective advice rather than the information and guidance given by someone only seeking a commission—is lower cost.  When a buyer eliminates the salesperson, they expect to get the product or service at lower cost.  From their perspective, the middleman is gone, so the markup to pay the middleman should be gone also.  For the do-it-yourself buyer, once they have determined what they are going to purchase, price or value becomes the deciding factor.  Since they have eliminated the cost of providing “advice” from the company, they expect to be able to purchase their product or service at a substantially reduced price.  After all, they have done the work themselves, saving the company providing the product or service a great deal of money.

For companies seeking to have both a traditional sales force and a division catering to the do-it-yourself buyer, price and profitability become issues.  How do you justify charging one price for one group of buyers and another for a different group?  Of course, the company can argue the level of service provided, but that doesn’t mean the consumer will agree.  Trying to market to both segments inevitably puts downward pricing pressure on the traditional sales process, cutting into profitability. 

Companies cannot sustain a loss of profitability forever.  Something has to give.  They must eventually give up one of the two divisions or split them from one another to the point that customers don’t recognize them as two parts of the same company.  Of course, many companies have chosen this route of having essentially the exact products and services offered by two distinct companies.  Yet, in either case, the company is actively contributing to the commodization of their product/service, making price or “value” the central issue. 

As the do-it-yourself market grows in virtually every segment of the economy, the traditional purchaser segment, naturally, is declining.  Companies are slowly making salespeople obsolete as they strive to create their place with the booming self-deciding consumer.  Worse for salespeople, this trend of consumers to try to eliminate salespeople from their purchasing has really just gotten underway.  The trend is growing rapidly and appears to be doing nothing but picking up steam year by year.

Certainly, there will always be a segment of the market that wants the traditional sales experience where they deal with a highly skilled and knowledgeable person.  But even this segment of the market is increasingly looking not for the traditional salesperson, but for someone they recognize as an expert. 

Salespeople intuitively recognize this desire to work with an expert and are driving themselves out of the market by their own marketing.  We’ll examine this in the next post.  Then, in the seventh segment, we’ll look at how government is also helping to destroy personal marketing.

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October 25, 2007

The Rush to a Recession

Filed under: Personal Marketing,prospecting,Uncategorized — Paul McCord @ 7:06 am

What are you going to do when the sales environment gets really tough?  That is a question I’ve been asking salespeople, professionals, and executives for over a year and few have been able to give me an answer other than to continue doing what they are doing now.  Many have said they didn’t believe the scenario that I described of a quickly approaching massive slowdown in the economy was realistic.  Others agreed that a slowdown was probably coming but that it would probably be mild.  Few thought it would be as severe as I was predicting.  Few made preparations.

Even today much of my what I say about getting prepared for a much more difficult sales environment falls on deaf ears.  Last week I was told by many I spoke to that the papers and Wall Street had declared the worst was over and that it looked like things were going to slowly begin to get better.  I responded that I was still convinced that we have only seen the beginning and that time to prepare by learning how to use more sophisticated and effective prospecting and marketing tools was now before things get really bad.  They ignored me as simply being alarmist to sell my sales training and coaching.

If you still think that’s the case, read this article from this morning’s New York Times.  Worse, this is article only address one of the areas of the economy that are in deep trouble.  We are in for some really rough times ahead and if you sell, you’re either going to learn how to generate a large number of high quality referrals and other effective marketing methods, starve, or get out of sales.  It’s really that simple.

If you’d like to learn how to survive and even thrive in this new environment, I encourage to get the training you need now.  Visit Power Referral Selling to learn why referrals and developing a public reputation as an expert can not only get you through this recession but even grow your business when others are dying on the vine.

If you have a sales team—whether 5 or 5,000—go to McCord and Associates and learn how we can train your sales team to take advantage of this threat to your company’s existence.  You can grow by leaps and bounds while your competition is shrinking.  This recession might be your way to phenomenal growth. 

October 25, 2007

Reports Suggest Broader Losses From Mortgages

By VIKAS BAJAJ and EDMUND L. ANDREWS

Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up.Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up.

Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up.Merrill Lynch said yesterday that it would take a charge for mortgage-related securities on its books that is $3 billion more than the $5 billion it expected just two weeks ago. And a report from the National Association of Realtors showed that sales of existing homes in September fell twice as much as economists had expected, to their lowest level in nearly 10 years.

Stocks fell sharply early yesterday on the news, with the Standard & Poor’s 500-stock index falling 1.8 percent before recovering in the afternoon. Investors also bid up Treasuries as they sought the safety of government-backed debt.

At this juncture, economists say the troubles in the mortgage market could, all told, cost financial firms and investors up to $400 billion.

That is far more than the roughly $240 billion cost, adjusted for inflation, of the savings and loan crisis of the early 1990s, according to estimates of the combined financial toll of that crisis on both the federal government and private sector. The loss in total real estate wealth is expected to range from $2 trillion to $4 trillion, depending on how far home prices fall, according to several economists.

That would be significantly less than the losses suffered by investors in the stock market collapse earlier this decade, which erased more than $7 trillion, or about 40 percent, of market value.

Experts caution that these estimates are preliminary and the total costs could get bigger still. They also note that the loss of real estate wealth could prove more damaging for the general public than falling stock values because more American families own homes than own stock.

In recent years, the rise in real estate values has helped propel consumer spending, as homeowners refinanced mortgages and took out home equity loans.

“There weren’t a lot of people living off their capital gains from stocks,” said Jane Caron, chief economic strategist at Dwight Asset Management. “There were a lot people using their home as a piggy bank.”

Of course, many people who bought their houses several years ago are still ahead financially, because the sharp run-up in home values is still far greater than the expected decline. Those who bought close to the peak stand to lose the most if they have to sell in the near future.

In a new report to be issued today, the Joint Economic Committee of Congress predicts about two million foreclosures by the end of next year on homes purchased with subprime mortgages. That estimate is far higher than the Bush administration’s prediction in September of 500,000 foreclosures, which in itself would be a tidal wave compared with recent years. Congressional aides provided details of the report yesterday to The New York Times.

The Joint Economic Committee estimates that the lost of real estate wealth just from foreclosures on subprime loans will be about $71 billion. An additional $32 billion would be lost because foreclosed homes tend to drive down the prices of other houses in the neighborhood.

Those figures would cause a decline of $917 million in lost property tax revenue to state and local governments, which will also have to spend more on policing neighborhoods with vacant homes. The states most likely to be hard hit fall into two categories: those where prices had been rising fastest, like California and Florida, and Midwest states with weak economies, like Michigan and Ohio, where people with low or moderate incomes made heavy use of subprime loans to become homeowners and consolidate debts.

“State by state, the economic costs from the subprime debacle are shockingly high,” said Senator Charles E. Schumer, Democrat of New York and the chairman of the Joint Economic Committee. “From New York to California, we are headed for billions in lost wealth, property values and tax revenues.”

Still, subprime mortgages make up a relatively small share of the total housing market — about $1 trillion of the $10 trillion in outstanding mortgages.

The much bigger losses will be in declining real estate prices. Household real estate currently totals about $21 trillion, according to the Federal Reserve.

Global Insight, a research firm, predicts that the national average for housing prices will drop 5 percent over the next year and 10 percent before mid-2009, for a total of about $2 trillion. Economists at Goldman Sachs have predicted prices will drop by 15 percent, meaning an overall decline of more than $3 trillion; other forecasters have said the decline could be 20 percent or more.

House prices decline slowly, because many potential sellers simply stay in their current homes when they think prices are too low. But that becomes more difficult as people have to move either because of job changes or, increasingly, because their monthly payments are rising sharply. In the next 18 months, interest rates on more than two million homes loans will reset to higher adjustable rates.

Inventories of unsold existing homes rose last month to their highest level in almost 20 years.

Economists continue to update their predictions on how the loss of housing wealth might affect the overall economy. Nigel Gault, chief domestic economist at Global Insight, said he assumes that consumers reduce their spending by about 6 cents for every dollar of lost wealth.

If prices drop 5 percent next year, that would mean a decline of $60 billion in spending, all else being equal. That would be a noticeable slowdown, but not enough to cause a recession.

In the last several years, Americans have increased spending faster than their incomes by borrowing against the rising value of their homes. Economists estimate that such mortgage-equity withdrawals may have added one-quarter of a percentage point to consumer spending growth — a boost that could now disappear.

Thus far, spending has climbed more than 3 percent over the last year, and the most recent data on chain-store sales suggests sluggish growth but nothing near levels consistent with a recession.

The housing bust has also led to job losses. From the start of 2003 to March 2006, housing-related businesses like mortgage companies, home builders and contractors added 1.3 million jobs, or about 23 percent of all new jobs created in that period, according to an analysis by Mark Zandi, chief economist at Moody’s Economy.com.

Since then, the housing business has shed 383,000 jobs, while the rest of the economy has added nearly three million jobs.

Jan Hatzius, chief United States economist at Goldman Sachs, said the small decline in housing employment thus far is surprising and suggests more layoffs are ahead.

“You still have a million jobs that aren’t really needed anymore due to the downturn in housing,” he said.

D. Ritch Workman, president of the Florida Mortgage Brokers Association, believes he has an explanation. Many of the brokers and loan officers he knows are still working in the industry, even though they have taken on second jobs to make ends meet.

The home-loan company he owns with his brother in Melbourne, Fla., has seen revenue fall by half, to $500,000, and he has laid off two of its three salaried employees. But the firm has added several loan officers, who are paid on commission only, and it now has 18 people making loans.

“I am surprised they have hung in there,” Mr. Workman said. “But it’s a scary thing when that’s all you know. If for 15 years you have been a relatively successful broker and you have lived through the highs and lows, what are you going to do? Most of them are holding on for dear life and hoping things get better.”

On Wall Street, which fueled the housing boom by lending to mortgage companies and packaging and selling home loans, banks are writing off billions of dollars in bad loans and are setting aside billions more for the expected surge in defaults. Late yesterday afternoon, Bank of America said it would lay off 3,000 people across the company and has replaced the head of its investment banking division.

Eric Dash contributed reporting.

October 21, 2007

Are You Prepared For Your Market to Collapse?

Filed under: Personal Marketing,prospecting,Uncategorized — Paul McCord @ 7:29 pm

Are you prepared for a much more difficult selling environment?  I’m not speaking about the changing behavior of buyers that will change the nature of selling in the years to come as I’ve been discussing in recent posts.  I’m speaking about the changing selling environment of today.

As I’ve pointed out consistently over the past 16 months, the economy is slowly tightening up and moving toward a recession—or at least stagnation.  I’ve encouraged salespeople to prepare for this more difficult time by learning and implementing more sophisticated and effective—that is more professional and expert centered—prospecting and marketing techniques and strategies to help them not only survive, but to thrive in the tighter market to come.

Old marketing such as cold calling, fliers, blasting people with emails and unsolicited letters, sticking business cards under windshield wipers, walking door to door, planting cheap signs on the street corner, and spending thousands of dollars for advertising screams that you aren’t an expert—that you’re just another faceless salesperson in a sea of faceless salespeople.  This stuff hasn’t been working very well over the past few years in one of the best markets in history—how do you think its going to work for you in a weak market?

Prospects don’t believe true experts get their business from those marketing methods.  They believe successful salespeople get their business from more sophisticated methods such as referrals.

If you haven’t prepared yourself, now is the time.  The credit crisis and housing crisis are deepening and beginning to spread to many other sectors of the economy.  The Financial Times has just reported that credit issues are showing up in auto loans, personal credit, and eventually into the business loan sector.  Banks are nervous—so should you be.

Now is not the time to sit and wait to see what will happen.  Now is the time to act while there is still a bit of time left.
I encourage you take as serious look at the PWWR Referral Generation System CD’s and seminar.  Read Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals and learn how the true million dollar a year mega-producers generate their huge volume of referral business.

Learn how to use the free tools of PR such as writing articles, giving speeches, sending press releases, and becoming an expert source for reporters and freelance writers.  Learn how to use blogs and websites to establish your credibility and expertise.

Seriously consider a coach to help you learn and implement these tools and techniques as quickly as possible.

I’ve been preaching this for almost a year and a half.  During this time I’ve heard many salespeople and even sales executives tell me that I don’t know what I’m talking about, that today’s economy is different than in the past and with the careful watch of the Federal Reserve Board we’re past serious downturns in the economy.  Unfortunately, I was right and they were woefully wrong.

Yet, there is still a slight window to prepare.  According to Michael Mayo of Deutsche Bank “things are getting worse at a faster pace than many had expected.”  This isn’t the end of the world—but it might be the end of your sales career if you don’t learn how to generate business in a down market.

I’m not trying to be an alarmist.  I’ve been giving low key warnings for months.  Now, however, is not the time to be low key.  The economy is fragile.  If the Democrates pass the tax legislation they have proposed, this will end up being a very deep and very long recession.  Can you survive that doing what you’re doing today?

October 20, 2007

Personal Marketing is Dead: The Media is Killing Personal Marketing (the fourth of a series on personal marketing)

Filed under: Personal Marketing,prospecting,Uncategorized — Paul McCord @ 12:50 pm

If over the coming years, personal marketing as we’ve know it is going to die, what specifically is going to kill it?  There are four movements afoot that combined will destroy the individual salesperson’s ability to effectively market:  the media, the internet, corporations, and salespeople themselves.

Let’s take the media and the internet as a starting point.

Historically, consumer’s access to information has been fairly limited.  Individuals have had access to a limited collection of information outlets:  newspapers, magazines, TV, radio, and books.  Business has had access to the same media supplemented with industry specific periodicals and the occasional white paper.

Until just a few years ago all of these resources have been very limited.  Television, prior to the explosion of cable, virtually ignored educational subjects such as personal finances, and business coverage consisted mostly of stock reports.  Radio was even more limited.  Newspapers and magazines, other than industry specific publications, concentrated on broad subjects that appealed to a large audience with little in-depth coverage of minute subject matter.

Over the past decade, this information landscape has changed tremendously, primarily due to the internet and advances in digital publication technology.  No longer must a consumer wishing to investigate a potential purchase either seek out information from a salesperson or make a special trip to the library.  Today’s consumer has more information at their fingertips than any one consumer could ever hope to digest.

Consumers are flooded with information on any subject they can imagine through a great many sources.  Cable TV now has informational shows on everything from personal finances to the most complex business issues.  Specialized publications cater to almost any interest a consumer could have.  Radios are filled with shows geared toward educating people on finances, every type of personal and business problem, legal issues, car decisions, and anything else one might have questions about.  And with the advent of self-publishing and digital technology, more books  and magazines than ever before are being published every year. 

And this information isn’t being provided by a salesperson who may seek to slant it to create the impression that their product or service is superior or less expensive than the competition’s.  The information consumers receive today is written by individuals who are viewed as experts in their industry.  The information given is viewed as far more reliable and far less biased than that provided by salespeople.

Moreover, most consumers who do their own research search out a number of experts in order to get several opinions before making a purchasing decision.

These consumers are extremely well informed.  They have more information at their fingertips and in many cases know more about the subject they exploring than the majority of salespeople they could speak with. 

Although this group of do-it-yourself consumers is still relatively small, the number is growing exponentially every year and will continue to grow at phenomenal rates for the foreseeable future as more and more individual and business consumers seek to make decisions based on what they believe is unbiased information.

The reliance on experts for advice and guidance is greater than ever before because the expert’s opinions and information is more accessible than ever.  As decisions become more complicated and the possible solutions become equally more complicated, a greater and greater number of consumers are seeking out the advice and opinions of experts, while at the same time, fewer and fewer are turning to salespeople for information or guidance..

This shift to an expert based decision influencing environment is in its infancy, having only really begun in earnest in the first couple of years of the 21st century.  Its full fruition is still years away.  But it is a swiftly growing trend that threatens to kill sales as it is practiced today.

Rather than “selling” and “marketing,” the salesperson must learn to become an educator and must develop an image and reputation that will give them the same status as the experts consumers are relying on for information.  Consumers are no longer satisfied with biased marketing and sales tactics.  They want real information.  They want real trustworthy advice.  They don’t want to be sold anything by anyone.

October 11, 2007

Personal Marketing is Dead: The Evolution from Expertise to Price (the third in a series)

Filed under: Personal Marketing,prospecting,Uncategorized — Paul McCord @ 3:02 pm

As noted in the last post, there was a time in the not too distant past when consumers, both individual and business, sought knowledgeable salespeople to help them resolve complex problems.  Whether an individual dealing with financial issues, buying or selling a home, or seeking to resolve legal issues; or a company needing employee benefit plans, financing, or resolving complex networking issues, salespeople were recognized as important sources of information and guidance.

This recognition of salespeople as a source of information and expertise is no longer present in many instances.  The desire to work with a knowledgeable salesperson has been replaced with a desire to avoid salespeople.  Salespeople are no longer looked upon as an asset when making a purchase but rather as a hindrance, nothing more than a roadblock to be avoided if at all possible.

Even with the most complex and sophisticated purchases, more and more consumers are opting out to avoid salespeople and to make their decisions based on their own research—or gut feeling. 

Part of this self-reliance in making critical decisions is a result of the proliferation of information now available to individual and business consumers, giving many a false sense of having a more in-depth understanding of their problems and their possible resolutions than they really have.  Often with only the most cursory investigation of the issue, consumers are making critical purchasing decisions.  And often it is only well after the fact that they realize they needed more guidance than the two page article in a magazine gave them.

Once a prospect believes that they do not need guidance from a trained salesperson, price becomes their primary purchasing factor.  If they know the solution, the only thing they need is the product or service.  They no longer believe they need pay for advice or “expertise.”

Yet, it is not simply the volume of “expert” advice in magazines, newspapers, and on TV that give prospects the impression they no longer need an experienced sales professional to help them.  The very companies selling the products and services prospects need and want are encouraging them to reject salespeople and simply shop price.

Almost without exception, every industry has been affected by the discount or do-it-yourself company.  Common examples of this rush to provide discount or do-it-yourself products and services in what were once considered products and services that required an experienced salesperson as guide and counselor are AIG, Progressive, LegalZoom.com, ScottTrade, LendingTree, 1% Realty and hundreds of other companies.  And these are just in the individual consumer areas.  The business-to-business sector is infected also.  The message is you don’t need expert advice, just someone who will provide you the service at the cheapest possible price. 

And the consequence of this new sales environment?  For the most part, disaster for both salesperson and consumer. 

For the consumer, the consequence is making poor decisions, often not recognized until years later.

For the salesperson?  The death of personal marketing.  Declining income.  Shifting from being a salesperson to becoming an order taker.  And a great deal of frustration as their company, their sales manager, and even many sales trainers are still telling them to market in ways that are outdated and ineffective.

October 6, 2007

Personal Marketing is Dead: Personal Marketing in a Commoditized World (the second of a series on personal marketing)

Filed under: Personal Marketing,prospecting,Uncategorized — Paul McCord @ 7:36 am

What is personal marketing?  In a sense, personal marketing is anything an individual salesperson, professional or business owner does to get their name out.  Whether that is through advertising, networking, cold calling, direct mail, sticking fliers on windshields, blasting away with emails, establishing a blog, leasing a billboard, or hanging fliers on doorknobs, the goal is the same—get the name out.

Some may protest that in the above sentence I’ve mixed marketing with prospecting.  True, I have.  But the way salespeople use the term, marketing generally covers any activity they do to generate business.  For most salespeople, there is no such thing as pure marketing or pure prospecting.  They are rolled up together and are inseparable. 

What is the ultimate goal of personal marketing?  Its goal is to generate enough interest in potential prospects, that is to soften them up enough that they are willing to listen to the salesperson.  Of course, it may have other goals such as moving the prospect to pick up the phone and call, or to qualify them, or, in a few cases, to have them buy without even talking with the salesperson.

However, the majority of salespeople simply are looking to have the opportunity to make their case to a prospect—to have the opportunity to make a sale.

In years past that was a reasonable goal.  Today, not so much. 

Today’s sales environment is very different from the sales environment of the past.  In years past, consumers and businesses knew they needed an informed salesperson to help them make an informed decision.  They wanted and demanded information.  They wanted someone who could bring a level of expertise they knew they didn’t have to the purchasing decision. 

In that environment, it was important—crucial, actually, for the salesperson to get their information in front of the potential buyer.  Buyers, when they were ready to purchase, were open to being approached by potential providers. 

Recent years has seen a change in the effectiveness of personal marketing.  Large numbers of consumers no longer believe they need advice and counsel when making purchases—unless that advice comes from someone they perceive as a true, publicly recognized expert.

Today, large segments of the buying population believe that they are capable of making their purchasing decisions without the aid of a “salesperson.”  Rather than taking their chances with someone whom they believe is only out to sell something, they rely on “objective” advice they receive from reading a magazine article or book, or watching a TV broadcast.  Thirty minutes of watching Suzi Orman and they’re financial experts, no longer needing the advice of someone they view as having a vested interest in the transaction (ignoring, of course, that Suzi Orman very much had a vested interest in having them watch her show).  Or they’ll read a book on CRM and make a determination as to the best program to meet their needs without consulting a salesperson who may have a thorough understanding of the products and their applications.  Likewise, they will read an article on the latest innovations in home energy savings and head to Home Depot instead of calling a professional for expert analysis of their needs and what solutions will accomplish their energy saving goals.

We are in an ever-steady march to do-it-yourself in virtually every aspect of our lives.  No matter how complicated and sophisticated the issue, consumers are being told they no longer need to consult a professional.  From financial decisions, to medicine, to taxes, to legal issues, to resolving the most complicated business financing problems, consumers are being encouraged to self-diagnose and then to self-medicate.

Watch the TV ads for various drugs and then find a doctor who will prescribe what you’ve determined to be the answer to your illness, whether it is the appropriate medication or not.  Read a two page article on mortgages and then find the loan officer that will sell you what you want–whether it is really the best loan for you or not.  Read a book on network solutions and head off to CompUSA for the parts–who needs to spend money on a network engineer?  Decide to open a business and head to LegalZoom.com for the incorporation papers—who cares if incorporation is the right choice? 

All those dollars salespeople are spending on marketing are influencing fewer and fewer people. 

Yet, many, if not most of these same consumers are willing to spend money IF they could get unbiased advice from someone they recognize as a true expert.  That’s the reason they are willing to rely on the canned advice they garner from the articles, books, and television shows they watch.  They perceive the authors of those articles, books, and television shows as true experts.

In addition, there is still a sizable portion of the population—both individual consumers and businesses—that recognizes the need for professional advice and counsel from experts within the area of their need.  But, they want to work with experts, not salespeople. 

Where does this leave salespeople?  It divides them into two camps. 

The first camp consists of “salespeople,” those folks who are simply out to sell something as viewed by the purchaser.  If the buyer must work with someone they perceive as simply being a salesperson and not an expert, then price becomes the deciding factor.  If you’re not getting true expert advice and must rely mostly on yourself, then what becomes the deciding factor?  That you like the salesperson?  A small portion of people will purchase based on that criteria.  Or, that the salesperson happens to be right in front of them, making the purchase easy?  Again, a small number of prospects will purchase based on that.  Or, they like the color of the item, the brand name, or some other ancillary factor?  Of course, a few will decide based on these non-essentials.  But for most, when they must work with a “salesperson” instead of an “expert,” price becomes the dominate issue.

The second group consists of “experts,” people with the public image and reputation as being experts in their field.  These people have the same attraction and authority as the people who wrote the articles and the books the consumer originally read or the TV show they originally watched to help them make up their mind about their needs and wants.  These experts may have only a local image and reputation, but they are known commodities nevertheless.  They are recognizable as experts because they have the public image and reputation as an expert.  These experts are worth listening to for, after all, you don’t get that reputation unless you know what you’re talking about.  These people command money and attention.

The first group, the salespeople, engage in marketing.  The second spend their time cultivating their image and reputation in the public sector.  The first group is dying a slow death, slowly becoming no more than order takers, offering the best price, the most bells and whistles for the money, or the best incentive.  The second group offers advice and counsel and earns the customer’s loyalty and dollars.

This conversion from the old sales environment to the new is still in process.  There has yet to be a complete conversion.  Therefore, salespeople can still make a living through marketing.  Unfortunately, that’s all they can expect—to make a living.  The “experts” are the ones making the serious money.  Moreover, the disparity will continue to grow over the coming years as more people demand that you either give them the best price or prove your expert status through your image and reputation.

In a commoditized world only one thing trumps price and that is expertise.  And expertise is no longer judged by how good a technician you are, but rather on what your public image and reputation is.

October 1, 2007

Personal Marketing is Dead: The Death of the Unique Selling Proposition (one of a series on personal marketing)

Filed under: prospecting,Uncategorized — Paul McCord @ 11:25 am

There was a time, not really that long ago, when salespeople tried to differentiate themselves through the way they introduced themselves to prospects.  Taken from Madison Avenue, the USP or Unique Selling Proposition was brought to sales as a way the individual salesperson could quickly and succinctly describe the benefits they brought to clients.  Rather than simply stating their title, they concentrated their introduction on what they actually did for a client.  This mini advertisement—sometimes called an elevator speech–found not only acceptance within the sales community, it worked to generate interest and set the salesperson apart from his or her competition. 

As time passed, more and more salespeople picked up on the concept and began creating their own USP.  The results were the same—they were unique in their approach and prospects remembered them.  More importantly, prospects invited the salesperson to describe more fully what is they did and how they accomplished the benefits they described.

And the USP passed into the marketing lexicon of most every serious salesperson.  Today, it’s hard to find an experienced salesperson that hasn’t developed their own USP.  In fact, it’s hard to find any salesperson, experienced or not, who doesn’t have some type of mini advertisement on the tip of their tongue.

Just how many ways can you say that you solve financial problems?  Or that you create wealth?  Or that you match transportation needs and dreams to automobiles?  Or that you reduce the expense of and improve office communication?  Or that you reduce corporate risk and exposure, saving your clients tens of thousands, possibly millions of dollars annually?  Or that you enhance corporate image and reach, increasing revenue through increased sales?

There are only so many ways any one profession can be described.  Now, there may be dozens of ways to do it—there may even be hundreds of ways, but, nevertheless, there is a finite number of descriptions, no matter how creative one is.  And, so comes the problem with the USP.  It is no longer unique.  It is no longer capable of setting apart one salesperson from the crowd.  What was once a useful and powerful tool has become just another trinket to jangle before a prospect.

Unfortunately, trinkets don’t impress prospects—especially when everyone else has one just like it.  Do you junk your USP then?  No.  Simply recognize it for what it is—a useful tidbit of information that has limited impact and no longer works to set you apart from your competition.

Understanding that traditional marketing is dead is the first step in understanding how to market in this new era of sales.  If you want to get to the top of your industry, you must entirely rethink what marketing is and how you do it.

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