Marketing Times - March/April 2008 - (Page 9) World class Sales greg alexander a competitive advantage in a commoditized global economy Globalization and commoditization are diminishing the strength of organizations who rely on product differentiation or price leadership as the means of achieving competitive advantage. Many companies have survived for years using a ‘tried and true’ product development model, which begins with design, proceeds to engineering, follows with patent protection, continues with mass manufacturing, and ends with defending profitable multiyear product runs. Yet, today these core processes are under attack. The educational systems in emerging countries are producing design, engineering, and legal skilled labor at wage rates well below historical norms, making it harder for countries in developed nations to compete. Furthermore, previously scarce manufacturing assets are now in sufficient supply, which only places additional pressure on domestic manufacturing to lower costs. Some companies are resorting to a hyper accelerated product development cycle or shifting to made-to-order manufacturing, both of which make copycatting more difficult for foreign competitors, but are much more expensive models to support. All of these trends are preventing companies from relying on product differentiation as a means of sustaining any competitive advantage in the marketplace. Low cost providers are dealing with the similar challenges. A low cost structure and streamlined operations are now easily duplicated. Relying on price leadership has reached the point of diminishing returns. In a world where what little product differentiation that does exist is constantly narrowed by the copycatting manufacturers, the lowest-cost supplier wins. Yet, it is difficult for companies from the developed world to survive as the lowest bidder when the forces of globalization allow them to be constantly undercut by foreign firms who can do much the same for significantly less. What’s left, then, upon which to build a sustainable competitive advantage? Simply, to establish, promote, and maintain an intimate Customer Experience that bonds with and binds to buyers of your product or service. The emotional resonance and psychic charge generated by a connection made between a provider of an experience and the consumer of the experience becomes just such a sustainable competitive advantage. Ironically, the corporate business function best able to create and nurture this Customer Experience is the sales force. And as the sales force is composed of people and process, it is very difficult to duplicate. Thus, achieving world class capability in the sales function is the key to achieving a strategic differentiation through the approach of Customer Experience. No wonder sales transformation is on the top of boardroom agendas. But why is now the time for business leaders to turn their attention to the sales department? There are 3 powerful forces at work to morph the sales function from its current state as a ‘cost of doing business’ to one of a 21st century ‘mission critical corporate process’. First, America is going to shortly begin suffering from a labor shortage in the sales category the size of which we have not yet experienced. This shortage will stimulate the demand for sales professionals. The corporate need for sales professionals will peak at a time when a good portion of the labor pool will be retiring. According to the Bureau of Labor Statistics there are 20 million people in the United States that list as their primary occupation “Sales”. Ken Dychtwald, Ph.D., states in his book Age Wave: How the Most Important Trend of Our Time Will Change Your Future that “beginning in the year 2011, close to half [of these sales professionals] will be retiring”. Not only do Generations X and Y not have the numbers to replace them but also they lack the sales experience, skills, knowledge, and training. Institutionalizing the tribal knowledge locked in the minds of your aging sales force before they retire will become a near-term priority. 2011 will be here before you know it. 9 marketingtimes
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