Traveling Sales Reps Done Right (2017 Dec)

by Barry A. Liebling

When I was a child I often witnessed the activities of traveling salesmen (There were some women, but mostly they were men). These people made their living by knocking on doors, ringing doorbells, and exerting great efforts to persuade potential customers to let them in, hear their pitch, and buy their products. Some of the items they peddled were encyclopedias, vacuum cleaners, kitchen appliances, and household brushes. While I saw a few real-life traveling salesmen in my neighborhood, it was more common to see them portrayed in the movies and on television shows – usually as part of a comedy. Fictional salesmen would go to ridiculous machinations in their efforts to get their “foot in the door” of target customers. Ordinary people would typically be annoyed by the persistent badgering of these aggressive pests.

Even today the business model of the traveling salesman endures – but it is used less frequently. The payoff for the sponsoring company is sales. But the difficulties are significant. The sales rep has to have a thick skin, because the refusal rate is very high. This filters out reps who are not highly persistent and pushy. Once the rep gets through the door – because it required so much effort to get past this barrier – the rep is motivated to do everything possible to make the sale.

From the customer perspective the selling episode can be uncomfortable. Certainly, some customers are happy to meet with the rep and purchase the products. But many potential customers do not want uninvited reps calling them. And even after the sale, some customers feel foolish for giving in to the pressure, and they may regret their moment of weakness and feel resentful.

Recently Amazon and Best Buy – two giants in the retail industry – have updated and improved the sales rep business model. And they seem to be on the right track. Instead of having the rep contact the potential customer, the customer makes the first move and invites the rep into the home. The reps do not call themselves salespeople, instead they are “advisors” and “consultants” who will walk through your home and explain, demonstrate, and recommend the latest technical products that will fit your lifestyle and preferences. These modern reps are paid a salary instead of being compensated on commission. Both companies anticipate that their new model for traveling company representatives will lead to more sales as well as stronger customer loyalty.

Of course, in the age of big data the new Amazon and Best Buy programs can be very valuable, and the quantitative analysts will be delighted. The retailers will have records of what customers are interested in, and this will be used to fine-tune advertising and offerings that focus on a person’s special characteristics. For example, someone who purchases a baby monitor system is likely to be a good candidate for a myriad of products for young children.

But the most interesting part of the new sales rep model is the shift in the psychology of the key players.

Consider the customer first. Since the customer has to request an appointment the rep will be seen as compliant, rather than as obnoxiously aggressive. The difference between inviting someone into your home, as opposed to allowing someone in who knocks to enter, is significant. The potential customer is in charge, and that has to feel better. Notice that the customer is promised a “free consultation” by an expert in home high-technology products, and the sponsoring company has the ability to deliver on the pledge. If the visit goes well and the customer decides to buy things, the rep will probably be contacted the next time the customer needs advice.

Now think about how the world of the new sales rep is different compared to the old model. Traditionally, a sales rep has learned that most encounters will result in customer rejection. But in the updated Amazon and Best Buy model the tables are turned. Now every appointment is with a potential customer who is pre-qualified and definitely in the mood to hear the sales pitch (re-named “participate in the consultation process”). A successful rep no longer has to be highly aggressive and persistent. In the new scheme the rep will make fewer visits to homes but will have a much higher conversion rate. A low-key, no-pressure approach will be sufficient to convert a lot of “clients” into buyers. Notice that with the Amazon Best Buy model the sales rep will be far less anxious because the people who request a rep visit are mostly friendly and receptive.

Incidently, no matter how much the reps call themselves “consultants” or “counselors” or “technology experts” they are still sales professionals. While the company rep is not paid on commission, you can be sure that the amount of sales attributable to each rep will be closely monitored by Amazon and Best Buy. When it is time for promotions, salary increases, or deciding who should leave the company this information will count heavily.

What about potential customers who have no interest in having a rep come into their home? How should Amazon and Best Buy deal with them? For these individuals (probably the majority of people) the large retailers can continue their current policies. The new sales rep position does not displace existing purchasing channels. It skims off consumers who are most interested in having products explained to them and are highly likely to buy.

Of course, the success of the new sales rep policies will depend on how well Amazon and Best Buy implements them. If they stick to their promise of providing expert advice – with minimal sales pressure – their prospects are excellent.

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