Customer owns the remote control

February 27th, 2011 by

I am reading the book “CRM at the Speed of Light’ by Paul Green Berg; in one of the early chapters of the book a 2004 Business Week article is referenced that states in the 1960s an advertiser could reach 80 percent of US women if a single ad aired simultaneously on CBS, NBC and ABC. To reach that same 80 percent in 2008 it would take at least a parallel airing on a minimum of 100 channels. The chapter goes on to explain how TV networks have had to adjust to the dramatic change in the advertising market in order to meet the demands of the consumer.

In the late 1800’s to the early 1900’s, John Patterson was the president of a company called NCR and he was an early innovator of sales strategies with concepts like: each salesman having his own territory – no salesman could sell outside his own territory – all commission earned in a territory accrued to the salesman who “owned” the territory. In addition, each sales representative was measured by having an annual quota that had to be met. All of this was backed up by strong and often innovative advertising. John Patterson was a mentor for Tom Watson; founder of IBM, Tom would implement the same marketing concepts in IBM, making it one of the strongest sales oriented companies in the world.

I have been a professional B2B sales person for 18 years and when I first started in sales we used the same sales and marketing strategies developed by John Patterson developed in the late 1800’s: build a sales territory, assign a rep, provide marketing materials and get them banging on doors. It is perceived by many sales professionals that in “John Patterson sales model” the power is in the hands of the sales representative and not the customer. The John Patterson sales model implies the customer relies on the sales rep to provide the information to the customer and tell the customer what they needed, and if you were a company like IBM you were the expert and the customer could not argue with your recommendations.

Now comes the web 2.0 and it is a major game changer for sales organizations; the power now shifts to the customer. Customers have unlimited access to product info (web 1.0), they also have the ability to socialize about products (web 2.0). The customer can now use wiki’s, blogs, forums, product review sites and social networking to share information about products and services that they use within their organizations. The sales industry faces the same challenges as the network companies. For 90 years if you used John Patterson model of having sales territories, reps and marketing material you could communicate with 80% of the customers; companies now require 100+ channels to achieve the same results.

http://wvegter.hivemind.net/abacus/CyberHeroes/WatsonSr.htm

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