Google's pursuit of efficiency through superior engineering has already driven a great deal of change in the advertising industry and is now driving change in how selling is accomplished. They have achieved extraordinary growth without any sales or customer service to speak of and now other companies are trying to emulate this lowest of selling costs. The question is: How does a company with a high cost of selling become a company with very low cost of selling? I can think of two routes: sell better or sell less.
Effective companies do this by measuring everything, then cutting the things that don't measure up, and doubling down on the things that do. The result: increased selling effectiveness and lower cost. In the dynamic world of sales and marketing a once highly effective sales tactic can lose momentum and fade into inefficiency. After all, we hope that the things that don't measure up did not start out that way. This seems simple enough until the conversation turns to innovation. A company only focussed on measuring the relative efficiency of the things it is currently doing will not try to do new things and will be quickly passed by competitors that are not so burdened by yesterday's thinking.
Time is an additional layer of complexity in this analysis. Selling costs money now and delivers benefits in the future. Very few companies have successfully neutralized the time dimension when analyzing sales effectiveness. So cost cutting always looks great at first because the lower cost is being compared to sales activities purchased in previous periods. Then the gradual decline in revenues starts and things don't look that great anymore. Often at this point more cutting is administered and you can see where this is leading. Bleeding the patient has obvious limits.
Better selling comes from innovation. Innovation comes from rapid experimentation. Rapid experimentation comes from the freedom to try new things. New things are never sure things and all of this costs money. Whether you are an investor looking to put your money to work, or an employee looking for a career, or a buyer looking to standardize on a product/service, beware of the company that is on the sell less track.
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