History of Sales: 6 Things You Should Know
Written by Carey Davis
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Sales are defined as the exchange of a commodity for money or the action of selling something. Thanks to supply and demand, market changes, consumer experiences and product reviews, many methodologies, ethics and business empires have risen and fallen throughout the history of sales. From door to door interactions to technological developments that link companies directly to their consumers, sales leads that connect businesses to their target markets has changed the way transactions are made today. If you’re wondering how the history of sales in modern b2c relationships (business to consumer) and b2b (business to business) interactions has changed, start with Benjamin Franklin.
1752 – 1870: Role Specialization
In 1752, Franklin started one of America’s longest active insurance companies. During this period, subscription services were highly popular. As such, the insurance industry established its original model around a subscription-based service. A salesperson would visit your home, present a pitch, close the sale and make routine in person visits to collect the monthly subscription payments. In the beginning, this model was perfect for businesses and customers, but as companies grew, successful sales people began to realize they didn’t have time to prospect for new clients because they were too busy traveling to different locations collecting monthly subscriptions.
The issue of time management was a conundrum for many sales reps. As a result, the insurance industry developed the concept ofrole specialization. The terms ‘farmer’ and ‘ hunter’ were born in the 1870s to describe ‘collectors,’ individuals who collected subscriptions and ‘producers,’ those who generated and followed up with new leads. This structure of selling was so successful that other businesses outside the insurance industry began adopting this methodology into their relationships with consumers.
1849 – 1924: Snake Oil Salesmen & IBM
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From 1849 to 1882, 180,000 Chinese immigrants came to the United States looking for work to provide for themselves and their families. At the time, the US had a demand for a large workforce due to the construction of the intercontinental railroad. With the arrival of Chinese immigrants, a stigma rose within the world of sales: snake oil salesmen. A ‘ snake oil salesman’ is known as a fraudulent, greedy profiteer that tries to exploit an unsuspecting public by selling it fake medical cures. Did you know that Clark Stanley is known as the original snake oil salesman? He fooled the public by posing rattlesnake oil as a healing medicine full of Chinese snake oil. With other traveling salesmen and doctors, Stanley began to aggressively push his false remedies across the United States until he was exposed and fined in 1917.
Thanks to Stanley, consumers began viewing everyone within the sales profession as unethical, deceitful businessmen. That was until a salesman by the name of Thomas J. Watson Sr. founded his company “International Business Machines” known as IBM and made a bid to redeem the integrity of the sales industry in the eyes of the public.
Through IBM, Thomas introduced several core concepts:
- As competitors increase, having a sales force becomes a competitive advantage.
- To sustain the competitive advantage of your sales force, they must be educated, professional, and well-trained.
With these core concepts in mind, Thomas made a significant contribution to the sales industry in multiple ways:
- Introducing the idea of motivating a sales force by throwing contests, offering sales commissions, and singing songs.
- Recruiting college graduates; Thanks to IBM, the sales profession is considered a respectable career choice for college graduates.
- Using formal sales training.
1925 – 1936: E.K. Strong and Dale Carnegie
E.K. Strong published, The Psychology of Selling in July 1925. In his book, Strong introduced a wave of new sales principles that included question type, objection handling, and features & benefits. He made it clear that sales is a skill that can be taught and studied. With the combined efforts of the sales concepts in Strong’s book and the success of IBM and its sales force, there was a renewed interest in salesmen. Entrepreneurs, corporations, and authors began investing in sales. One of the most famous of these entrepreneurs was Dale Carnegie.
Carnegie is best known for his bestselling book, How to Win Friends and Influence People. He was also a business trainer who made major contributions to the sales profession with the concept of AIDCA (Attention, Interest, Desire, Conviction, and Action). AIDCA demonstrated how sellers could walk a buyer through these five steps and end with a sale. The combined contributions of Dale Carnegie and E.K. Strong moved the sales industry along in multiple ways:
- Creating the tactical and relationship selling playbook.
- Making ambiguous sales concepts more clear through research.
- Articulating how sales can be repeated over and over again.
- Introducing the idea that sales were a skill that could be learned, studied, and mastered.
1988 – SPIN Selling
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became popular in the late 1980s, revamping older ideas and elevating them to the next level known as Solution Selling or Consultative Selling. SPIN selling focused on the idea that customers will only make a purchase if they realize that there’s a need for that product in their lives. There are times when a client may not be aware that there is a problem to begin with. It then becomes necessary to ask them questions that may reveal certain issues. SPIN selling essentially takes four compelling questions that, when asked in sequence, will increase the likelihood that you’ll be able to close the sale.Solution selling was perfect for those who sold complex products and services. Originally, salespeople attempted to convince a potential prospect to purchase their goods or services without any background information on the customer. However, the Solution Selling method allowed sales reps to ask a series of questions to identify if the prospect is a good match before attempting to make the sale. The concepts of SPIN and Solution Selling ushered the world into a new era in which maneuvering through complex sales processes had never been easier.
2011 – Aaron Ross
Aaron Ross was the next innovator to make major contributions to the sales industry. While at SalesForce, he identified that though there were plenty of specialized roles in the sales industry, there was still a major flaw. Remember, the 1870s introduced the concept of specializing job roles to fix the issues that the salespeople of that era had to deal with. 141 years later, Ross identified yet another major flaw that needed fixing. He realized that account executives and closers were spending too much time prospecting for new leads instead of closing new business deals.
Once again, a new specialized sales role was created to fix this inefficiency known as the Sales Development Rep (SDR). SDR focused on the three primary components of the sales process: lead generation, closing, and account management. Each element was just as important as the next, needing the same amount of attention. Therefore, one specialized rep was required to focus on just one component of the process. This meant that three reps worked in conjunction with one another while focusing on their separate areas of expertise. Ross introduced the idea that true sales growth can only occur if there are constant qualified leads. These leads would be generated by a Sales Development Representative focusing on their one specialized role and nothing else.
2015 – Automation Tools
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2015 introduced a seemingly endless flow of automation tools that made selling much easier. The modern day salesman has an unlimited amount of tools at their disposal that focuses on each aspect of the sales process. For example, there are apps for lead generation, CRM, contract management, email automation, and so on. There have also been apps that focus solely on connecting independent apps together so that sales reps can find everything he or she needs in the same place.
It’s common to find that the top sales people are those who learn to balance technology with best practices. Known as sales hackers, these individuals understand that achieving mastery of both technology and sales concepts will allow them to perform at a higher level. The sales profession has never seen such growth in all of its history with the advent of new more efficient tools.
Over time, other professions in marketing and finances have outpaced the sales industry in terms of growth with their golden ages of expansion, but with the advent of new technology, it has never been easier to scale up a business with a consistent stream of new sales leads. Innovations like as email, SMS, and telephone marketing have made it so that any person with a phone, computer, and a decent internet connection can become a sales guru without ever having to leave their home. From its historical best practices to mastering the new tools of the trade, individuals who understand the unique aspects of sales will have an advantage over their competition and will likely see success during their career in the sales industry.
References & Links
- A Brief History of the Sales Environment
- 21 Sales Methodologies
- History of Professional Selling
- The Importance of Sales Role Specialization
- A History of ‘Snake Oil Salesmen’
- Chronological History of IBM
- A Brief History of the Strong
- The Evolution of Professional Selling
- The Top 4 Sales Questions | The Basics of Spin Selling
- Five Fatal Sales Mistakes – Aaron Ross Sales Hacker Conference Talk
- Top 51 Sales Automation Tools