Sales Advocate Newsletter

Why Hiring a “Sales Rep with a Rolodex” No Longer Works

February 2003

It is a common misconception that in order to reach revenue goals, all a company needs (especially start-ups) is a sales person with connections. Unfortunately, this approach to sales strategy and revenue generation is woefully outdated. Even if a sales executive is able to keep track of her or his contacts (given lay-offs, re-orgs, promotions and the general rate at which employees change jobs these days), there are many reasons why a company cannot rely on “rolodex selling” to reach revenue goals consistently.

The Rolodex Model is Not Scalable

True, a few deals can be closed, helped, or accelerated by selling to one’s friends and prior associates. Using “rolodex selling” to close the first few customers is invaluable. But beyond these initial few deals, a company must be able to replicate a predictable sales model. Sooner or later, one runs out of qualified prospects in one’s personal network. Many companies have turned to team-selling approaches, using lower-cost telephone and internet-based sales resources to find and qualify prospective customers and more expensive field sales staff to negotiate and close sales. By implementing such an approach, a Phone Works client, who is a start-up in the software industry, realized Q4 2002 performance that was higher than any quarter’s since June 2001.

Today's Purchasing Decision Process is Complex

Gone are the days of simple decision-making, where one senior member of a department can approve a purchase single-handedly. In most companies, budget-consciousness has given rise to extensive evaluation and approval processes. Decisions must be justified carefully, usually with the involvement of multiple people. This complex decision-making approach, which is prevalent in today’s economy, is best served by a team-selling approach – with the field sales rep covering senior executives while inside sales reps find additional contacts on the client’s decision-making team and give them the information and assurance to support a purchase decision. This sales strategy reduces cost by focusing field sales on the most critical contacts and issues while insuring that a deal won’t be stalled by objections or unanswered questions coming from other client contacts.
Team-Selling Approach Generates Measurable Results
By modifying its sales process from 100% Field Sales to a combination of Inside and Outside Sales, our client realized significant benefits. 129 product demonstrations were performed in Q4 in the United States and Europe, which resulted in licenses to high-profile clients enabling them to exceed 4th quarter goals and reach profitability for the first time. In addition, the company has a pipeline filled with nearly 200 prospects that are in the process of evaluating the product.

Rolodex Selling Has Been Replaced

Rolodexes are obviously passé. Sophisticated tools such as PDA’s, sales force automation and CRM systems have long replaced the Rolodex as tools for keeping track of contacts. Similarly, a Field-Sales-only sales strategy is “old school”. Isn’t it about time your company took a look at revamping its sales model to include the latest proven methods for accelerating revenue, building pipelines and decreasing cost of sales?

This newsletter is provided as a complimentary service from Phone Works, Inc., the San Francisco Bay Area's leading sales consulting firm. Phone Works helps technology firms increase revenue, shorten sales cycles and implement successful, repeatable sales models. The industry's largest technology companies and newest start-ups turn to Phone Works for lead-generation, lead-qualification, telesales and sales-productivity programs.

You can reach Phone Works at 510.749.9073.