With thanks to sales guru Charles Hawkins, here's how you can use the Porter model in a sales management situation. So, it still has five forces like the Porter model but the forces now are a little different and they're more relevant to the business with sales and sales management. The first force to consider is competition and rivalry among sales people. One can now legitimately argue that continued expansion of the roles that both marketing and inside sales is now playing is eroding the traditional wall of outside business to business sales people. On top of this, some industries see buyers as no longer valuing the personal relationships or the face-to-face engagement as they once did. Number two, the next force is threat of new entrants. Job automation is a threat right now. Artificial intelligence, cognitive computing, robotics, virtual and augmented reality are all advancing at great speeds and each one of these categories of technological innovation are posing a genuine threat to those aspects of the sales role that are routine and therefore can be automated. Artificial intelligence will continue eating away at those aspects of the traditional sales role that require information synthesis and exchange. Artificial intelligence powered sales-enabling platforms are emerging to further empower buyers with data-driven services at a fraction of the cost and help automate aspects of the sales role. This data-driven approach to sales can help organizations reduce costs by taking the black art out of sales, by identifying repeatable and scalable processes. Number three is the threat of substitutes for sales people. Business to business sales roles are now increasingly under threat from e-commerce and self-service as more business to business buyers seek to bypass the salesperson and gain commercial benefits from self-diagnosis and online purchasing. Of course, the element of the traditional sales role that is being an information source is also being eroded because everything is now available to buyers online. Let's not forget the back and the vendor push days, sales people had all the cards because of information asymmetry. But now buyers have all the information which is turning vast numbers of generally sales people into high cost order takers. Another force that impacts the competitiveness of the sale situation is the bargaining power of buyers. Sales people now have little control and influence in the customer pool era, deny it if you like, but buyers are in control of virtually everything now and sales people in many industries are being marginalized simply because they don't create enough value in the eyes of the buyers. I have a friend who runs an industrial ceramics company that's based in the United States. His sales are global. Recently my friend told me that if he does not respond to an email or RFP that is a request for a proposal within 24 hours, he has probably lost the sale to his competition. Finally, is the bargaining power of suppliers. We now operate in global markets and the network effects are increasingly complex. Partner ecosystems continue to gain more momentum as industries take shape and evolve. Sales people must work with more partners nowadays in order to continue to develop competitive differentiation. So, what does this mean? What we've done is, we've identified these five forces. It's up to the sales manager to take a look at that model and apply that to a particular marketplace. In some situations, perhaps, many of these forces that I've mentioned are significant pressure points. Which would mean that it's a very very competitive market and probably a very difficult market to make lots of profits in. In other situations, maybe you're a little bit lucky and you don't have as much competition coming from these forces at all, but simply puts it as a tool. It's a way to help you to organize your thinking and analysis in a marketplace. Any type of sales management plan needs to consider its environment and all of these forces. Hopefully, you can use this Porter model and adapt it to your particular situation.
