Recommended Reading: Amazon Effect Takes Aim at Relationship Equity

Survey shows distributor sales reps could become "less necessary" in future.
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In a recent Indian River Consulting Group-MDM survey on the role of field sales, we asked distributors to look forward and consider how likely it would be for field sales reps to take customers with them when switching employers in 2020. While a little more than half said they expected little or no change from today, more than a third of respondents expected reps to be less likely to take customers with them.

This would be a good thing, since many sales reps today own considerable relationship equity.

Responses to another of the survey questions points to one of the reasons for this expectation. When asked what is expected to be the largest change to the traditional field sales role over the coming decade, one respondent said more of the sales process will be done over the internet, including pricing checks, stock status checks and order placement. "Field sales will have increasing challenges in getting in front of customers as they move more to the internet (Amazon effect)."

Other respondents expected that this movement toward the digital and away from the personal would result in companies having fewer sales reps, who will be “less necessary.”

This echoes what I’ve been writing and talking about a lot in recent years: the ongoing shift away from outside sales reps as the primary touch point for a customer. It’s been long believed by many in the industry that the economic value of the relationship is between the sales rep and the customer, not the distributor and the customer. And in many cases, because of the historically self-directed nature of the sales force, this is true. Today’s sales reps own considerable relationship equity that will not transfer well when they retire. And sales incentives usually support that.

Because of this, many distributors are afraid to introduce too much change to how they approach sales – lest sales reps quit and go to a competitor, taking customer business with them. Or they are afraid that if they don’t have an outside sales rep call on the customer, another competitor will send in their field sales rep and steal the customer away.

But the role of field sales has to change. The internet has become the customer’s main source of new product and application information, and reliable supply chains are the norm not the exception, reducing the need for a heroic recovery from sales reps. I wrote about this recently for Modern Distribution Management in a two-part series looking more closely at the future of relationship selling, where I also discuss the other forces that are changing the economics of traditional, relationship-based selling.

I also offer four ways to help your sales team adapt to these ongoing trends in our latest whitepaper, The Sales Rep of the Future.

Mike Marks is managing partner of Indian River Consulting Group and specializes in helping distributors and manufacturers accurately diagnose problems and identify risk-bound alternatives so they can take their next steps confidently. Call IRCG at 321-956-8617 or visit ircg.com.

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