Christopher Mims comments in the Wall Street Journal:
The direct-sales industry is a $180 billion industry, but hasn’t adapted to online at all. Anyone who needs to put salespeople in front of potential customers can do so by combining the magic of a remote workforce and fractional employment.
Right now a college student in Sweden—let’s call him Sven—has a rather unusual summer job. He’s in sales, but he hasn’t met anyone from the company whose products he pushes.
His boss is an app. It considers Sven’s strengths and weaknesses as a salesman, matches him with goods from any of a dozen brands, and plots a route through Stockholm optimized to include as many potential customers as possible in the time allotted to him.
The app is like Uber, but for a sales force. It has many of the same dynamics: Companies can use it to get salespeople on demand, and those salespeople choose when to work and which assignments to accept. The startup behind it, Universal Avenue, calls the idea “sales as a service.”
While the Stockholm-based company may be pioneering this model of it, outsourcing functions traditionally considered integral to a business is a trend that’s gaining steam with certain types of companies.
Anyone who needs to put salespeople in front of potential customers who aren’t otherwise economical to reach can do so, it seems, by combining the magic of a remote workforce and fractional employment.
The “sharing economy” is best known for services offered to consumers—think Uber and Airbnb. But what this more-recent trend shows is that it can be just as applicable to business-to-business transactions. In this case, its efficiencies are making direct sales possible for small and midsize businesses.
Todd Toback, proprietor of Get It Done House Buyers in Southern California, has been buying and flipping homes for 15 years. For the first 10 he hired and managed his salespeople the usual way. He trained them in person, and they all worked in the same room.
But Mr. Toback found it hard to find talented salespeople who all happened to live in the same city. Then, he discovered freelance marketplace oDesk, which recently renamed itself Upwork. Now, every member of his five-person sales force works at home, from four different states, and is, he says, vastly more productive.
What Mr. Toback and Universal Avenue are doing isn’t outsourcing in the traditional sense. Both still have to train their salespeople. Mr. Toback does it with tools like Skype. Universal Avenue relies on short courses and quizzes in its app.
Both are working with “partners” who are freelancers. These freelancers have control over when and how they work, and their relationship with their employers is defined entirely by measurement and results.
The technology may be novel, but this model of sales isn’t exactly new. For more than 50 years, Americans have been selling each other Tupperware, cosmetics and magazine subscriptions on commission and in their spare time. The barrier to applying the same model to business-to-business sales was information.
Even in “inside sales,” the sort in which everyone stays at their desk, calling customers and giving demonstrations over the Web, there is generally a lot to be gained from having everyone close together, says Peter Levine, a partner at venture investor Andreessen Horowitz. “There’s a lot of transfer of knowledge—you could imagine some employees and some contract people in the same room, and people come up to speed quickly in that environment.”
This model, in which salespeople are deeply integrated into a business, remains the only option when you’re selling high-value goods to large companies, says Greg Schott, chief executive of Mulesoft, which sells big companies business software that stitches together other business software. Selling to senior executives is a high-touch process.
Selling subscription-based software requires long-term hand-holding, because dissatisfied customers can cancel at any time. But for sales to everyone besides the hulking giants of the business world, learning can happen in many other ways, some of which are rare or impossible with traditional sales teams.“I would say we have almost better control than companies have over their own salespeople,” says Universal Avenue founder Johan Lilja.
That’s because every time one of his “brand ambassadors” connects with a shop or restaurant owner, everything they learn about that business is dumped into a centralized database so it can be used to figure out what else that person might want to buy. It’s a network effect. The more businesses Mr. Lilja reaches, the better his freelancers can be at selling them things.
Universal Avenue’s customers include Stockholm-based payments company iZettle, Europe’s answer to Square Inc. It’s exactly the sort of point-of-sale device and service that must be sold to shops, bars and restaurants one skeptical small-business owner at a time.
“If [Universal Avenue] can pull this thing off, I can outsource all my sales to them,” says Marcus Strömbäck, iZettle’s head of direct sales. He says that while he is just in the pilot stage with Universal Avenue, using the service only in Sweden, sales through the year-old payments platform are robust, and he is eager for the company to expand outside its native country. Greece and the U.K. are next, says Mr. Lilja, with the U.S. to follow by the end of the year.
According to rival Upwork, freelancers in sales made $9.8 million on the platform last quarter, and 6,700 sales jobs are posted to the site every month, up 57% from a year ago.
“The direct-sales industry is a $180 billion industry, but it’s an industry that hasn’t adapted to online at all,” says Mr. Lilja. That, it seems, won’t be the case for long.
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