55 percent of orders pass through Ciscos system without being touched by anyone.20

new customers. Despite these changes, many companies still refer online sales from new customers to a salesperson. Cisco may have had $9.5 billion in online sales in 1999, more than three-quarters of its total sales for the year, but if you try to order from Cisco and you havent set up an account through a dealer, you cant do it. New customers have to register with a dealer before they can purchase online.21 And Cisco is not alone in this. A recent study by Shelley Taylor & Associates found that 90 out of 100 web sites (from the 1,000 largest companies in the world) sold products to other businesses, but only 9 allowed new customers to initiate a sale online.22 Many people dont realize that companies are focusing their B2B efforts not on acquiring new customers, but on converting current customers to web-based ordering, sales, and customer service.23 The high-value activity of acquiring new business is still left for consultative salespeople.

reductions in sales costs and sales forces. There is evidence that sales expenses have declined and sales productivity has increased since sales have moved online. For example, Cisco Systems, which sells about 80 percent of the routers and other forms of networking gear that power the Internet, now handles 80 percent of its orders online. Cisco Systems sold an estimated $15 billion online in 2000.24 Larry Carter, CFO of Cisco Systems, reports that in 1999, Ciscos networked business model saved over $800 million, while increasing salespeoples productivity by 15 percent.25 While 80 percent of Ciscos orders are online, the other 20 percent involve higher-value sales activities carried out by internal and external salespeople (remember the 80/20 rule).

Dell has also lowered its sales expenses using the Internet. For example, Dell Computers U.S. web site, which was launched in July of 1996, sells $40 million a day and accounts for 50 percent of Dells

U.S. sales.26 Dell allows customers to initiate orders online, but always follows up an online order with a call from a customer service person.27 Salespeople get credit for online orders when customers write in the name of their salesperson, and regional marketing managers set online revenue goals for the sales team.28 The Internet has helped Dell lower its sales, general, and administrative expenses from 15 percent of its revenues in fiscal year 1994 to 9.4 percent in 2000. Michael Dell believes that further reductions in these costs are still possible, even as much as half again.29

Several leading companies have virtually eliminated their sales forces in favor of independent solution providers. Microsoft and Dell are just two examples. Other companies have reduced their field sales forces and chosen to go with distributors, dealers, and value-added resellers. After exploring alternative channels for years in order to reduce sales overhead and be more price-competitive, IBM and Xerox have both turned to independent solution providers.

A final note: As I look around, I see fewer road warriors on planes than I used to. Companies have gotten smarter and are using fewer outside field salespeople. The message seems to be that companies are looking for a few good field sales representatives to call on their clients. Like the Marines, a few good people are left with getting the job done on the outside. The salesperson and consultative marketer of tomorrow will have to be really good at what she or he does, since the competition will be so fierce for fewer jobs.

ACTION POINTS

4 Expect further reductions in sales forces. The Internet is expected to continue to reduce the number of sales representatives and change the ways in which businesses sell to each other. As sales expenses decrease and the Internet continues to grow, employment in direct sales forces is expected to continue to decrease. Sales organizations should plan on reducing cost of sales by opting for inside sales reps.

4 Consider team selling with higher-potential accounts. Many of the Fortune 500 companies approach particular industries (education, insurance, utilities, etc.) and high-potential accounts with sales teams that include not only a manager from the sales department but also managers and representatives from engineering, service, and research and development. Such team sales efforts bring strengths from many functional areas to bear on the account. Procter & Gamble and IBM are two examples of companies that have used this team sales approach successfully. According to Jill Summers, a former Procter & Gamble manager who is now with Eli Lilly, We have vice presidents who often head up our customer teams who call on our larger accounts, such as Wal-Mart.

SALES TRUTH 24: Consultative salespeople will remain, but in reduced numbers.