CONTENTS:

THE SALESPERSON IS DEAD, LONG LIVE THE SALESPERSON - FEATURE ARTICLE
The influence of salespeople is diminishing as the Internet is fulfilling much of their traditional role as information providers - it is time for the salesperson to change.

DOMINO NOT DOT.COM - GOOD PRACTICE
As dot.coms fall about our ears, it is time to take another look at Lotus.

CROSSING THE CHASM - BOOK REVIEW
A review of a new update to an old best seller

B2B, WHERE IS THE PROFIT?- e-CHAT
Some interesting maths on the margins of B2B exchange sites.

FROM THE EDITOR......

SELLING IT TO INDUSTRY.

In this issue, we look at how the influence of the salesperson is diminishing as the customer finds other sources of information and what can be done about it. Good practice returns with a review of Lotus Domino a pre dot.com solution that works. This look at old best sellers continues with a review of the latest update of a 90's cult book. We conclude with an analysis of one B2B exchange site and compare its ability to generate revenue versus its recent valuation.

Quote for today:

"Men are best convinced by reasons that they themselves discover"
Benjamin Franklin

(I believe this also to be true for women. Ed)

FEATURE ARTICLE - THE SALESPERSON IS DEAD, LONG LIVE THE SALESPERSON.

The influence of salespeople is diminishing as the Internet is fulfilling much of their traditional role as information providers - it is time for the salesperson the change.

Whilst the Internet is changing the way we do business, mobile access to the Internet will transform it. Experts predict that 54 million people in Europe will be regular mobile Internet users within 2 years. What does a world in which everybody has access to the Internet at any time mean for the salesperson?

The first task for yesterday's salespeople was to become familiar with the solution or service they were to start selling. Without information, they could not set about prospecting. At the same time yesterday's customers often struggled to get adequate, even essential information, on which to make a decision.

Now, much of this information, including prices, is available to the customer anywhere, anytime via the Internet. In today's information rich environment the value of yesterday's salespeople, which lay in their product knowledge and ability to discuss price, is rapidly diminishing. Soon the Internet will be a far superior source of information. What rational reason do decision-makers have to involve salespeople? What value will salespeople bring to their employers?

This is of course taking a simplistic view of the sales process. It ignores selling skills and the power of human interaction. The best sales people are persuasive through the authority of their views and vision; they build trust through empathy and social skills. Individual relationships are important differentiators in maintaining profitable long-term business. Yet, overall the influence of a salesperson is diminishing. The question is by 20%, 30% or more?

Today's customer is like the Captain of an early sailing ship, going forward into the unknown, observing changing conditions minutely, fully aware of the abilities of his vessel and crew. Yet whilst the Captain was the most powerful person on board, the most critical person was the Navigator, responsible for identifying crucial data at each stage of a journey and advising on the best course. The role of today's salesperson is akin to a Navigator. It is to identify what will add value to the customer's business and provide direction within a sea of information. It is by providing 'Value Navigation', in the same way that a good department store assistant gives independent advice, that the salesperson again becomes an indispensable aid to the decision maker. The first step in being a Value Navigator is to develop an appreciation of the customer company's current position, its aspirations, its constraints, and its competitors' products prior to the first high level meeting. In this way, the initial briefing is not about the customer reluctantly briefing another salesperson and the salesperson, head down, making notes. It is a face to face, equal to equal, building of rapport through discussing and demonstrating an understanding of the situation.

Traditionally the sales team would rely on their own knowledge, or information from sales sheets or more recently the marketing web.
Unfortunately these sources of information are often partially compete, out of date or poorly categorised and time consuming to use.

Today many companies recognise these issues and are going through the process of restructuring their sales support information often via a marketing web site that is enabled for mobile access. Experience shows that sales people have limited time and tolerance for irrelevant information. The new sales support systems must be simple to use, up to date: search and download must be speedy and information should be presented in concise nuggets. The system must enable the salesperson to search for and digest a briefing within 10 minutes, ideally through a mobile connection.

Technology is only part of the solution. Marketing has a key role in delivering focused content that is continuously updated. To support the salesperson, marketing needs to move away from the style of working that is like a monthly magazine where information has little time dependence and the emphasis is on gloss. Marketing needs to organise itself like a daily business paper, with the emphasis on investigative research, concise text and timely delivery. It may be that marketing can't do all of what is needed, in which case this should be outsourced.

The second step for Value Navigators is to identify the value they bring to prospects. The higher the relative value, the more prospects will involve them in the decision making process. The earlier they identify they don't offer best value, the sooner they can walk- and avoid coming a costly second. This is a complex judgement for the salesperson, involving many variables. It is a decision that needs to be made following the first high level meeting or introductory phone call. The sales support system can be of most assistance by offering the sales person the ability to compare the prospect with other previous situations. Offering a question based rating system
for example is unlikely to provide consistent results for it is part of our human legacy that we are much better at 'classification than calculus'.

A relatively simple approach to developing a catalogue of comparisons involves interviewing customers and losses in different situations and documenting their perceived value. For start-ups the process involves interviewing the customers of competitors. For service providers it is viable to write the expected gains and risks as part of the customer contract. This ensures that customers focus on their priorities and the results are accurately measured. To be successful this method requires continuous investigative research, hence the analogy of marketing being like a daily newspaper.

The simple beauty of value navigation is that information levels the playing field. Just as the customer can search for the best fit, so can the sales person. Just as customers are in a position of power because they can gather all the specifics they need, sales people are equally in control.

Yesterday's sales people who are offering product knowledge are being squeezed out of the decision making process. By linking a sales team with relevant, up to date information on situations and value you are effectively creating the salesperson.com, an agile, up to the minute player who can easily and quickly exert influence anytime, anywhere.

Ian Dabney

ian.dabney@brainsells.com

GOOD PRACTICE - DOMINO NOT DOT.COM

As dot.coms fall about our ears it is time to take another look at Lotus.

Remember "Groupware" predates Internet mania. Lotus Notes provided large professional firms, like the Androids, software that let individuals learn about developing business opportunities. All this required mainframe servers and an expensive in-house WAN. The arrival of the Internet (to provide WAN on demand) and Domino (to extract information from legacy files and publish it) allow ordinary firms to share information more effectively.

A simple application that uses two of the best features enabled by the Internet, can easily be provided to Sales Representatives. The field sales force can use laptop computers to improve their productivity when they visit a prospect. They can serve themselves via Domino to understand the order history of the prospect at all locations.

They can use Lotus Notes to share this information with sales colleagues. Together, the sales team can identify patterns of orders in similar companies and the events that triggered them. The result can empower a sales representative to suggest more compelling product offers.

In a dot.com world it's worth remembering that it's the simple things that always go wrong.

Mike Evans

mike.evans@cambashi.com

BOOK REVIEW - CROSSING THE CHASM

Geoffrey A. Moore, Regis McKenna - Paperback - 222 pages (June 1999)
Capstone Publishing Limited; ISBN: 1841120634 - (A314.99 at Amazon.co.uk)

Geoffrey Moore has just revised his classic exploration of high technology marketing, published first in 1991. Despite his later books, this is the best analysis of his key idea, the "chasm". If you read the original then you will find a few new spins but no new ideas. In particular, it does not cope with the advent of the Internet and ASPs changing the nature of software from product to service. Nonetheless the original idea, which is that marketing methods that work for the pioneer users, have to switch around when the market goes into growth, still has application today.

The real strength of the book is its accessibility and readability. Far too many of the texts on marketing remain provinces of the academic; too full of references and carefully manicured case studies to stand on their own merit.

To the outsider, or the new entrant to the world of high technology marketing, the author provides valuable insights and everyday examples that help to demystify a market that, at first sight, appears fearfully convoluted. The 'chasm' in question is the gulf that separates a brilliant, young, high technology company, selling to enthusiasts, from a mature organisation which dominates it chosen market - the leadership role to which virtually all new high technology ventures aspire. The reality of the chasm, and importance of successfully crossing it, would be hard to overstate. In terms of revenue size and growth, market stature and influence, shareholder
value, IPO options and long-term security, the chasm is the turning point. At best,failure to cross the chasm leads to anonymous survival.

If you operate outside the US you do need to know that this is a book with a loyal following in America. It's quite clear to company watchers like ourselves that many companies operating in global high technology markets, particularly the IT companies we routinely track and observe, embrace this book wholeheartedly and apply some of the lessons it contains. Oracle and Siebel come to mind.

Bob Brown

bob.brown@cambashi.com

e-CHAT - B2B, WHERE IS THE PROFIT?

Below is a summary of an article that does some simple arithmetic on B2B exchanges. It is taken from a recent article entitled 'Another Blow to B2B' by Pat Dorsey, Morning Star, March 31st 2000

"Some of the biggest boys in the aerospace industry--Boeing, Lockheed Martin, Raytheon, and British firm BAE Systems--got together and formed an online exchange, with B2B player Commerce One as a key technology partner.

Royalties, of course, are the Holy Grail of B2B, and the prospect of a limitless stream of high-margin transaction fees is largely what's
keeping the B2B stocks propped up at price/sales ratios of 250 or so.

Just for fun, let's do some rough math on the aerospace deal. The four companies that set up the exchange spend $71 billion per year on goods and services, and the aerospace industry as a whole does about $400 billion per year. So let's be very generous and assume that two years from now, half of all aerospace spending--$200 billion--runs through this new exchange. Typically, the entity running a B2B exchange gets a transaction fee of about 0.75% or so, which works out to $1.5 billion in this case.

Because Commerce One will have a 5% stake in the aerospace exchange, it would get $75 million in revenues from this particular deal. Generously assuming gross margins of 85% and a tax rate of 35%, this yields a little more than $40 million in net income. If we then apply a generous P/E multiple of 40 and a discount rate of 15%, we get a present value of about $1.2 billion for the deal. For reference, Commerce One's current market cap is more than 10 times larger, at about $15 billion.

And no, this isn't a slam of Commerce One in particular. It's just a reminder that the B2B business model seems to be changing shape almost daily, and B2B companies are getting increasingly cagey about just what percentage of these multibillion dollar revenue streams they're actually going to get their hands on.

And you know, for 250 times sales, I think I'd like to have a slightly better idea of just what I'm buying if I were a B2B investor."

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