By Pat Hinds
I read an interesting article in the Calgary Herald this week called “Shale Storm: How an energy revolution in the United States is battering natural gas prices and squeezing Albertans”. The article speaks about the Oil & Gas industry’s use of unconventional drilling technology to unlock natural gas in shale rock formations and the impact it has had on companies that rely on revenue generated from higher cost conventional natural gas. I can’t help but draw a parallel between what is happening in the natural gas market due to the exploitation of shale gas and what is happening in the sales industry as a result of the impact of the global recession resulting in a “new normal”.
The driver behind the technology that opened up shale gas production was the desire to get more natural gas production at a lower cost. Consequently, petroleum engineer Nick Steinsberger started experimenting with horizontal drilling and the use of water and sand to fracture the shale to release the gas. The sales industry is faced with the same challenge of increasing production of sales people while lowering cost; as a result companies are implementing web-based customer relationship solutions in order to improve and automate the sales process.
Listed below is an example of how the natural gas industry and sales industry are faced with similar challenges and how technology will make a difference.
Conventional Gas/Existing Customer Spend – When the economy is growing and the price of natural gas is high conventional gas producers are making money; as a result, no action is taken. As the economy grows sales people can hit revenue targets servicing existing customers; as a result, no effort is made to improve sales processes.
Unconventional Drilling/Sales Force Automation – In the natural gas industry the use of new technology has increased production and lowered cost making it difficult for high cost producers to compete. In the sales industry access to web-based customer relationship management technology has improved the productivity of sales people thereby reducing the cost of sales and making those companies that adopt more competitive.
Shale Gas/More Productive Sales Territory– Shale gas was not feasible prior to advancements in technology and the implementation of the technology has opened a whole new source of revenue for gas producers. Sales force automation was not available to small and medium companies prior to the introduction of internet technology; since this introduction companies can open new sales territories with existing sales resources.
Companies that maintain B2B sales organizations need to look to technology to improve sales processes and lower the cost of sale. Companies that do not adopt technology to improve sales process and customer relationships will find themselves faced with similar challenges as conventional gas producers. Waiting for the economy to improve is not a solution – it is a problem.