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How the Internet Is Changing the Business Buyer

How the Internet Is Changing the Business Buyer

Historically, customers relied on sales reps to provide information and expertise about the products that the customer needed to purchase. As such, sales reps in a certain sense were in the information delivery business. The typical sales rep spent much of their time carrying product information from the company to the customer. Sales calls involved showing the latest brochure, delivering a product presentation, and explaining the benefits to the customer. This behavior was of value to the customer because the sales rep was presenting information that the customer needed in order to make a buying decision.

Over time, two factors led to a demand for a new class of salespeople – ones who worked for independent companies who produced no products them­selves, but specialized in selling other companies products. These became an alternative channel that vendors or suppliers could use to further penetrate their markets.

These independent sales companies provided either:

  1. A less expensive way to reach a specific geographic market or a market dedicated to a specific class of products. They created this “distribution” business by serving the products of multiple vendors (usually non-competitive) at a greatly reduced cost to each service supplier or manufacturer.
  2. Specialized technical sales “experts” who could include a supplier’s products in a more sophisticated solution that required multiple products (or services) in a specially designed application for a specific customer. They became known as value added resellers or VARs.

The Internet, however, has now made the historical sales methodology obso­lete and put both substantial additional pressure and opportunity on both distributors and VARs. Using the Internet, customers can get product information at the same time as the sales rep, not just about the sales rep’s offerings, but the offerings of all of the rep’s competitors. In this environment, product brochures and elaborate product pitches are meaningless because the customer already knows what to buy and can locate multiple places to buy it. As a result, the importance of the sales rep to the customer as a deliverer of information has waned, almost to the point of non-existence.

Similarly, the information on the Internet has vastly increased the ability of customers to negotiate their own price. In the past, the simple mechanics of gathering data on competitive products (and comparing relative prices) was a formidable job, requiring many man-hours on the part of the customer. Such work was productive only when the customer was comparing products that were nearly identical, and where the difference in price was large enough to justify the effort required to uncover that difference.

For example, a company purchasing a complicated computer system could easily justify writing an RFP, reading multiple vendor proposals, and finally selecting the right vendor because the difference in price (or, more precisely, total cost of ownership) between the two competing systems was likely to be far greater than the expense of the complex buying process.

However, in cases where the variation between the prices of two competing products was relatively small, customers were naturally reluctant to go through such an expensive process. Instead, they’d depend upon local sales reps to provide basic product information and trust them to provide the best price. Often these relationships were “locked down” with the purchasing department, thereby guaranteeing that certain amount of buying behavior would take place going forward.

The net effect of such relationship was to leave the power of setting prices to the selling firm and (by extension) the sales rep who represented the firm. As long as the price was not egregiously higher than what else was available, the customer would continue to buy from the “approved vendor” at the price set by that vendor.

Today, however, customers can instantaneously compare products online, both in terms of functionality and price. Suddenly, it’s become relatively inexpensive for customers to search for the lowest prices for many goods and services that they might require. This ability to easily and quickly find alternatives tends to drive prices downward because, all other things being equal, the customer can now purchase the lower-priced product without carrying a heavy financial burden of researching alternatives.

Customers, and the processes they use to buy, have changed in other ways as well. Op­portunities that were once within the purview of one, or perhaps two, decision-makers may now involve an entire committee. Complex sales that previously could have moved forward on the basis of general consensus among the buyer’s management team are today often subjected to increased levels of scrutiny and formal approval.

the-future-of-selling-product

Read more about selling in the Internet age, in The Future of Selling book series.

 

Making the Most of Millennial Talent

Making the Most  of Millennial Talent

Best practices for developing the next generation of employees and leaders. Based on the Global Leadership Research project – featuring the “Best Companies for Leaders”


millennials-definedWhat can organizations do to engage millennial employees?

Variations on this theme drive a popular and compelling discussion in talent management circles. Unfortunately, much of the evidence is anecdotal, and much of the conversation is negative. Too often the focus is on “coping,” “mitigating,” or “managing” what some older leaders consider a strange and challenging new phenomenon.

Companies that excel in developing talent, however, are both more rigorous and more positive. These firms view younger employees as a source of new capabilities and fresh perspectives. They approach the rising generation as a powerful force for transformation in the workplace, and indeed as the future leadership of their companies. And while they realize that new employees must always adapt to established cultures, they embrace the idea that the organization itself must also change to make the most of a changing workforce.

The Global Leadership Research Projectglobal_leadership_2014

The recently-completed Annual Global Leadership Research Project offers valuable, detailed insights in this area. Conducted by Chally Group Worldwide, the project began with an in-depth survey of approximately 300 CEOs and senior HR leaders spanning companies from under $25 million in revenue to over $10 billion, and from fewer than 50 employees to more than 100,000.

Engaging with a sampling of these leaders directly through interviews, Chally investigated the approaches and tools pioneered by companies committed to investing in their own talent. One key issue studied revolves around engaging and developing employees of the millennial generation. Download Report


millennial_commonThreadsCommon threads

In this broader context, the survey asked, “how critical is focusing on the attraction, training, and retention of the millennial generation for your company?”

The majority of organizations consider these priorities either “very important” or “critical.” The ways they choose to address them vary from merely conceptual to very tangible, as some verbatim responses show:

  • “Educating ourselves on how to reach this generation.”
  • “Actively acknowledging the behavior and thought patterns of the millennials.”
  • “Developing a more formal career path with advancement opportunities.”
  • “Reviewing our policies, benefits and cultural practices to support this age group.”
  • “We offer flexible work arrangements, privacy rooms for working mothers, autonomy and being a part of the decision making process.”
  • “We have bolstered our mentoring program and offer flex and job sharing.”

The ways in which these goals take shape in recruiting, training, and development programs vary enormously. Some technological approaches, such as social media collaboration and online training tools, arguably have broader utility to the entire organization. Others are undoubtedly millennial-specific, and tend to reflect the deeper goals and concerns of the new generation. These common threads include a clear development path, meaningful work, abundant feedback, the opportunity for rapid career progress, and a respected voice in the organization.

1 Recruiting New Approaches

The effort to engage millennials begins in the most obvious recruiting arena, the university. Larger organizations maintain a strong recruiting presence there. Deloitte, the top private company in the study’s 2014 Best Companies for Leaders, taps senior partners, principals and directors to work with nearly 40 target universities, recruiting more than 7,000 graduates each year.

Firms take various millennial-focused approaches to enhance the effectiveness of student recruiting, from refreshing their employer brand to increasing their reliance on social media. Aware that inclusion is important to millennials, some companies emphasize their community outreach efforts and connect with or create diversity organizations, both on campus and within the organization.

Once the organization makes contact, internship and co-op programs offer an extremely popular way to involve prospective employees more deeply. The best are shaped by research specifically on the engagement and retention of millennial talent. Here again, a meaningful work experience is a key concept. Best-practice programs collaboratively set clear goals, involve “real” work, and offer significant development support. Because of the value millennials place on recognition, some internships specifically provide contact with executives and opportunities for interns’ contributions to be recognized by leaders.

2 Onboarding Intensive and Sustained

For many companies, the internship experience is the preferred pathway to full-time employment. Whenever the process of onboarding and training begins, it is immediate, intensive, and sustained. To introduce millennials to the life of the organization, the best programs strike a careful balance between purpose-built learning experiences and challenging, productive work. Providing flexibility, ample feedback, and tangible evidence of progress are key factors in sustaining engagement.

Here again Deloitte’s experience shows the level of commitment and complexity required for a best-practice approach. Realizing that millennials now make up more than 50% of the firm’s client-facing workforce, the company has built a robust “Welcome to Deloitte” program optimized for the learning styles and professional goals of the rising generation.

To engage these digital natives, the program focuses on immediate, interactive experiences. Simulations, role-playing, small-group activities, and games help new hires understand how to work successfully as part of a client team. An enterprise social networking platform connects them to resources and opportunities on a global scale, and reinforces the core beliefs and cultural norms of the company. As employees move through the year-long process, a customized dashboard lets them chart their path and track their progress. Graduates of the program report understanding the organization and feeling welcomed to it at rates of 96% or more.

develop_millennials3 Development The Social Professional

Given their duration, some of the more elaborate onboarding efforts overlap with development offerings for current employees. In these programs, the themes of meaningful work and rapid progression continue to guide best practices for developing millennials.

As befits a global consultancy, PwC’s efforts are rooted in a global research study of millennial attitudes, behaviors, and work styles. The more than 44,000 responses collected helps leaders understand how millennials compare with their non-millennial colleagues, and supports such initiatives as a Young Professionals Network and accelerated development programs.

GE takes a more collaborative approach to the same goals through their Global New Directions program. This brings together teams of next-generation leaders to identify approaches, tools, and processes that can help the company attract and inspire a diverse, globally competitive workforce.

Verizon offers a variety of opportunities across its organization, including internships, entry-level opportunities and robust rotational leadership development programs. The intern experience is a critical element of its mission to attract and retain top talent and serves as the priority pipeline for future full-time opportunities and returning internships and co-ops. The design of the intern program is directly influenced by research on engagement and retention of millennial talent. Verizon has a robust check-and-balance system that ensures all interns have clear goals, meaningful work, and an opportunity to showcase their achievements to the leaders of the organization.

Verizon’s six enterprise-wide Leadership Development Programs (Engineering, Finance, Human Resources, Information Technology, Supply Chain and Marketing) are designed to build a strong pipeline of future leaders by providing rotational assignments that develop functional competency and leadership capabilities. The rigorous rotational assignments enable these high-caliber millennials to contribute to critical business initiatives while building their professional network through bi-annual enrichment and networking events. All VLDP employees are paired with top-talent mentors within their first year of the program, and the company reinforces the importance of being good corporate citizens through annual community outreach events.

Verizon also offers a robust training curriculum for high-potential talent within the organization. Specifically, Verizon Leadership University is a corporate leadership development program designed to grow leaders at all levels and consists of core courses and ongoing learning resources. Verizon believes that every day is a new opportunity to develop as a leader, improve how you influence your team, and create greater value for customers and shareholders. Its suite of training programs and classes all incorporate millennial-friendly features such as social collaboration technologies and e-learning. From a development perspective, Verizon encourages geographic mobility amongst its employees, especially when new opportunities become available.

Deloitte continues its emphasis on social collaboration from initial training into all aspects of their development efforts. In addition to formal programs, the company stresses more organic opportunities for professional growth through community-of-practice microsites and the Deloitte People Network, which facilitates networking and peer-to-peer coaching and allows employees to crowd-source information globally. Micro-blogging is strongly encouraged, and user-created forums help match younger professionals with mentors.

Some companies are already taking these efforts to a higher organizational level with programs for training the next generation of leaders. Verizon’s Talent 2020 initiative is rolling out a series of test and pilot programs focused specifically on millennials. Verizon and others have built rotational leadership programs and numerous high-potential programs. One characteristic shared by best-practice companies is starting early: the strategic effort to identify and develop future leaders starts at the very beginning of the employment lifecycle.

4  Organizational change Reciprocal Advantages

In the broadest sense, however, a commitment to developing talent reaches beyond one-way training activities, or even programs that give younger employees a truly collaborative role. Leading companies show that a more expansive effort is required, one in which changes to the business itself support a holistic, long-term integration of the new generation.

Verizon’s commitment to managing “cross-generational talent” hints at this broader perspective, asserting (contrary to some conventional wisdom) that millennials aren’t a radical phenomenon but rather just one of many generational populations, each with unique needs and contributions.

Like-minded companies are training managers to understand generational differences and adapt to them. In some firms, this topic is a core part of all management development programs. In at least one, a coaching and mentoring approach, based on the ‘servant leader’ philosophy, is mandated for all leaders in the company.

Communication techniques such as social collaboration platforms are rapidly becoming part of the corporate landscape, not just for new hires or young employees but organization-wide. Even HR practices are changing to align with the inclinations of the millennial workforce: from more robust performance review and feedback methodologies, to health and wellness competitions, to experiments with flexible work hours and locations.

One innovation that perhaps typifies these trends is “reverse mentoring.” Adopted by several firms in the study, this approach promises insights in both directions. Older managers come to understand the attitudes, motivations, and cultural norms typical of their younger peers, learn practical technical and social skills – and often profit from informal, unfiltered feedback. Millennial mentors gain the professional benefits of contact with senior managers, plus a gratifying level of visibility. They feel that their generation’s voices are being heard.

5  Next-generation development Bigger, Better, Faster

The workplace has always evolved. Expectations, norms, policies and practices, even the physical and digital spaces in which work gets done have changed over time as each generation has come to assert itself. Rising cohorts of young professionals before this one have also been met with a mixture of incomprehension, anxiety, and promise. In the long view, the challenges and possibilities posed by the latest evolution may not be that different from those that came before, apart from some indisputable differences unique to digital natives.

What does seem to be different today is the breadth and sophistication of the efforts leading organizations are taking to integrate the new generation into their cultures. Faced with generational challenges at a time when so many other aspects of business are also changing, companies are responding swiftly and decisively. And by adapting the way the entire company functions to match the inclinations and capabilities of millennials, best-practice firms are affirming just how much each generation can offer to the others.

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