MARC BABEJ, NOBEL PRIZE WINNERS AND THE COMING EXTINCTION OF SALESMEN

Marc Babej has a new column up at Forbes comparing salesmanship before (B.I.) and after (A.I.) the Internet. He and his blog partner Tim Pollak conclude that the Internet is driving salesmen to extinction. They have two basic premises supporting their notion:

1. Salesmen in the before Internet (B.I.) world existed only because they held all the cards when it came to information.

2. That consumers in the A.I. (after Internet) world now hold all the cards driving salesmen into extinction.

I have a slightly different view on both premises. To explain my view I must first take you back to 1994.

In July of 1994 I got a call from Rob Rodin, CEO of Marshall Industries, then a $700 million distributor of electronic parts. Rob was in a big time lather over this new thing called the Internet and wanted my firm to help launch Marshall on the Internet. As a distributor of electronic parts, Marshall represented about 150 different vendors like IBM and Texas Instruments to 1000's of small and mid-sized enterprises via a sales force consisting of 600 outside sales reps and a few thousand inside sales folks. Marshall was a selling machine and Rob one of the best salesmen I have ever encountered.

Rob's vision for the Internet started out fairly simple - he wanted to use the Internet to post spec sheets and other data for their customers and salesmen and eliminate the millions of dollars they were spending on printing this information. And importantly, he wanted to eliminate the time wasted by salesmen hauling the data sheets and brochures around in the trunks of their company cars.

Rob was the one who opened my eyes to the potential of the Internet. We spent many hours holed up in a conference room plastered with butcher paper trying to figure out the potential impact of this new technology - specifically on the art of selling. We considered many things. We talked about what happens when the customer no longer needs the salesman for basic information? What happens when prices are posted on line? What happens if inventories are posted allowing competitors to see what's selling and what isn't?  What's interesting is that back then we never considered any of this to be a threat to selling. Instead we saw it as a way of becoming much better at competing and selling... because the Internet will enable really smart salesmen to compete in ways we couldn't begin to dream about back in 1994.

So as I read Marc's piece I found myself thinking about those conversations. I was scratching my head wondering if I was missing something. Marc is a bright guy, but was the Internet really driving salesmen to extinction? I don't thing so, in fact I think the opposite is occurring. I believe the Internet is enabling a new breed of salesman - one schooled in the hyper-competitive arena created by the Internet, who will learn to exploit this information to their advantage. And not unlike the contemporary financial arbitrageur who exploits small differences in financial markets, I think you will see the evolution of a salesman archetype doing the same thing - but in this case generating small incremental competitive advantages created by informational asymmetries enabled by the Internet. Permit me to explain in context of the remarks made by Marc and Tim.

First Marc and Tim offer their notion that there was an information imbalance in the B.I. days:

During the B.I. millennia, an imbalance of information was the key advantage enjoyed by salespeople of every ilk. They might not have been much loved or trusted, but they were acutely aware that consumers had little alternative to their biased "expert advice." In reality, their "expertise" may not have amounted to much, but it was more than consumers could bring to the table.

It is incorrect to assume that B.I. consumers were simply clueless marks to be exploited by unsavory salesmen. Assuming as they put it "consumers had little alternative to their biased expert advice" is  plain wrong. B.I. consumers learned long ago to "comparison" shop. To ask questions. To consult others  more experienced. And most importantly to limit their purchases to those brands they trusted. I recall how my mother used to shop - whether for meat at the butcher or for a car at the Ford dealership - suggesting that her and her generation were at any sort of a disadvantage is wrong. But you have to also realize that in the B.I. days, the world was much smaller, moved much slower, and had fewer choices of products and service that were much easier to understand and use.

This information imbalance Marc and Tim describe was actually the subject of a 2001 Nobel Prize award winning theory put forth by George Akerlof, Michael Spence, and Joseph Stiglitz which described the asymmetrical advantages a used car salesman had over his customer. For example the salesman knows how much he'll take for the car. He may also know that the exhaust system is about to rust-away or that the valve job will only last a few thousand miles. The potential buyer in this case does not have access to the same information and therefor suffers from a competitive disadvantage. So I agree with Marc and Tim that the B.I. salesman in some cases held an advantage over their customer or prospect, but I also think that the A.I. world has amplified this advantage in favor of the salesman. I'll explain in a moment.

Their second point is that the Internet has leveled the playing field between seller and buyer by enabling consumers to generate and access consumer generated content and media. And that whatever information asymmetries existed in the B.I. millenia are now eliminated because consumers will use the Internet to erase this advantage. Here's what they say:

In A.I., all of this is changing fast—but while the leveling effect of the Internet is hardly news, it might as well be to many marketers and salespeople, who continue to play by the B.I. rule book. They assume the existence of an information gap that is no more, and they focus on leveraging information asymmetries that have gone the way of the dodo.... Why buy blind if you can get the opinion of an unbiased expert, or the aggregate experience of dozens of users? If there's something newer or better out there, they can spread the word like wildfire through postings and blogs.

This premise is based upon the notion that consumers will want to participate... and when they do, be honest, accurate and informed. I don't buy this. The vast majority of consumers will not write the reviews, spread the word, design the ads, play the contests, rank the products, or offer their advice. Nor will the vast majority of consumers take the time to do the research, read the reviews, seek the advice, ask for the rankings, etc. Anybody who assumes that the Wikipedia is accurate is in for a surprise. If you really believe on line reviews at Amazon are indicative of how all readers felt then, you're really, really naive.

But most importantly the Internet enables all sorts of devious, nasty, downright obnoxious tactics unscrupulous marketers can deploy. From orchestrated  "word of mouth"  campaigns, to single issue blog swarms, to all sorts of search engine schemes designed to artificially inflate the relevance of a web site, the Internet has enabled an awesome array of tools and technologies to game the system and generate biased, misinformed opinions and advice. The Internet has enabled the used car salesman of B.I. days to migrate to selling erectile dysfunction cures.

In other words the signal to noise ratio is much greater today with the Internet than it was without. The need for a trusted, educated, experienced source of information is greater than ever. And the ability for consumers to really become educated consumers is more and more difficult due to the daunting number of alternatives and the complexity of the decisions. Smart sales folks will understand this and learn to use the Internet to make themselves indispensable. For better or worse, the Internet has tilted the playing field in favor of the salesman. Are salemen going extinct? Quite the contrary.

May I speak to a salesman please?

Learn how to wage and win battles for market share. Download the free PDF preview of the Art of Attack. Just click to get the PDF. There are no forms to fill out, you don’t need to leave your email address. No annoying questions to answer. Just click and get your PDF.

 

Comments

[Mike Sigers]

I've read a lot of what Marc's written, but I'm gonna have to disagree with this one.

The internet is not used by such a vast majority of those that buy anything, that to even suggest it's a factor is short sighted.

There's billions being spent by people who will never buy a single item online.

Maybe Marc's never used the internet to actually buy anything, but a lot of the time it's a very frustrating experience. And that from someone with 13 blogs and over 30 other sites.

I also happen to be a salesman Monday thru Friday and I can say that without real salesmen to talk to, I would not deal with many of our vendors, as their sites suck !

We need salesmen now more than ever...to clear up the mess that the internet makes of the buying and selling process !

Sorry Marc...the Mike and Mike show is right about the money and right on the money.

[Van Sales]

I visited this blog first time and found it very interesting and informative.. Keep up the good work thanks..

[Buy Viagra]

this is the best post that I find in long time.

[Generic Viagra]

Hello good morning let me tell yall
We spent many hours holed up in a conference room plastered with butcher paper trying to figure out the potential impact of this new technology - specifically on the art of selling
John B. Barnhart