May 2012

The Changing Role of Sales

At first blush “converting sales to profits” seems like a simple equation. Conventional wisdom has it that Sales drive revenue, which in turn generates profit; straight forward and obvious. But is it? Just how cost efficient and profitable is your sales force? How many of us have taken the time or have the inclination to determine the actual cost of a sales call, or better yet the real cost of a sale? Adjusting for inflation, research consistently shows most business to business sales calls cost $250 to $350 per visit, while a pharma sales call can cost as much as $1800. Obviously, costs vary depending on a number of factors including the industry, base salaries and the overall compensation package, support, training, advertising and promotion. But this only begs the question, how important are traditional sales calls in a world of social media, interactive web sites and on line selling that can, supposedly, greatly reduce actual selling costs? Today the Internet provides a level playing field where a small to mid-size business can compete with businesses ten times their size or greater. In other words the larger question central to the whole notion of selling in general, is “How is it changing and where is it going?"

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