The History of Professional Selling

To understand where you are going you need to understand where you have been.

History of Sales

The goal of this post is to educate today’s professional salespeople. As Steve Jobs said, “You can’t connect the dots looking forward.” Hopefully, you can connect the historical dots here in order to extrapolate what the future of sales may look like.

1870 – Insurance Begins Role Specialization with Hunters & Farmers

Obviously, sales has been around since we were bartering as cavemen. Let’s pick up the story of professional selling in 1752: the year “Benjamin Franklin founded America’s oldest, continuously active insurance company.” At this time insurance and many household goods were subscription products. A sales rep would close the opportunity and then make regular in-person visits to collect monthly payment.

Eventually, the successful sales reps had no time to prospect or sell because all their time was spent collecting monthly payments (sound familiar?). To solve this misallocation of time and resources, the insurance industry developed role specialization from an Account Executive/Hunter and Account Manager/Farmer perspective. “The terms ‘hunter’ and ‘farmer’ were coined by the insurance industry in the 1870s to describe ‘producers’ (those who wrote new business) and ‘collectors’ (those who collected the weekly premiums).”

This new sales structure was an instant success and quickly spread to other industries outside of insurance. Role specialization and process improvement become the first major advancements in the history of professional selling.

1924 – IBM & Professional Selling

From 1849 to 1882, 180,000 Chinese immigrants arrived in America to help build the intercontinental railroad. And with these Chinese workers came a game-changing product called snake oil! 😉 Clark Stanley (the original snake oil salesman), doctors, and traveling salesmen began to aggressively and deceptively sell “magic remedies” across America. This stigma is still something we deal with today when discussing the public’s perception of the sales profession.

During the early 1900s because of snake oil salesmen, the sales profession was seen as an occupation for the unethical and unprofessional. Luckily for the profession, a hotshot salesman by the name of Thomas J. Watson Sr. had just landed a new gig. Thomas looked to make his newly named company, International Business Machines, a sales powerhouse.

The major insights Thomas understood were: 1) as competition increases, a sales force becomes a competitive advantage 2) the more well-trained, educated, and professional the sales force, the more sustainable the competitive advantage. Thomas and IBM helped push the sales profession forward by:

• Implementing formal sales training programs
• Focusing on sales force motivation through songs, contests, and innovative commission structures
• Focusing on recruiting the best and brightest right out of college

Thanks to IBM, sales had become a professional and respectable occupation for the educated.

1925 – 1936: The Psychology of Selling & Dale Carnegie (Tactical Selling)

In July 1925, E.K. Strong published The Psychology of Selling. Strong developed a myriad of lasting sales principles such as features and benefits, objection handling, and question type. He showed that sales was a hard skill that could be taught, learned, and studied.

The success of IBM’s sales force and the findings in The Psychology of Selling led to a renewed interest in the sales profession by corporations, entrepreneurs, and authors. One of these entrepreneurs was Dale Carnegie. Dale Carnegie became a best-selling author and business trainer. He helped moved the sales profession forward through his concepts like AIDCA, which “shows how the seller works through the five steps to secure a buying commitment.” AIDCA stands for Attention, Interest, Desire, Conviction, and Action.

E.K. Strong and Dale Carnegie helped move the sales profession forward by:

• Concluding sales was a repeatable process
• Showing that sales was a skill set that could be learned, studied, and mastered
• Using research to solidify and articulate unclear sales concepts
• Developing the tactical and relationship selling playbook

1988: SPIN Selling & Solution Selling

SPIN Selling took tactical concepts, like open-ended questions, to the next level: Solution Selling or Consultative Selling. The key premise of SPIN Selling is that customers will only be motivated to buy something if they identify there’s a need. And because there are times when prospects are not even aware there’s a problem, the questions you ask are key. This book describes a powerful sales process that reveals four types of questions that when asked in sequence, will significantly increase the likelihood of a lead translating into a sale.

Solution Selling introduced an advanced sales model that worked very well for selling complex products and services. Instead of the sales rep forcing the product down the customer’s throat regardless of need, the rep would ask a series of questions in order to identify if there is a fit.

SPIN Selling brought us into the solution sales era and helped us understand how to maneuver complex sales processes.

2011: Predictable Revenue

While at Salesforce.com, Aaron Ross saw that further role specialization was needed in the sales profession. 141 years earlier, insurance companies specialized sales roles because of process inefficiencies. Aaron saw similar inefficiencies: Account Executives/Closers spending disproportionate amounts of time prospecting for leads instead of closing new business. This insight was followed by the creation of the additional specialized sales role, the Sales Development Rep (SDR).

The 3 key components of this sales process (Lead Generation, Closing, and Account Management) each have 1 specialized rep focusing on that piece of the process. Aaron moved the sales profession forward by helping us understand that sales growth comes from qualified lead growth. And qualified lead growth comes from a Sales Development Rep 100% focused on finding and qualifying leads.

Struggling to create repeatable, scalable and predictable revenue with a world-class sales development team? We have helped thousands of organizations build sales development teams, and would love to help you build yours! Book a free discovery call to learn what we can do for you.

2015: The SaaS Sales Stack & Sales Hackers

It is a very exciting time in the sales profession with SaaS prospecting automation companies raising major financing rounds and beginning to really scale their footprint. The number of tools in the modern sales rep’s tool box has exploded in recent years. With the SaaS Sales Stack, now reps have specialized cloud sales apps for each of their workflow processes. Apps for lead generation, CRM, email automation, contract management etc etc. The more app’s your team has mastered the more successful they will be. All the apps connect which means the customer data has never been so robust. Automation of key processes like logging sales activities means reps can spend more of their time actually selling.

The top performers are now those that have learned to master the new sales technology AND the best practices. We call these top performers “sales hackers.” These sales hackers understand the importance of the right tools and the right training in combination. The Sales SaaS Stack will become so powerful over the coming years that it will inevitably leave a significant percentage of “old school” sales reps in the dust. The SaaS Sales Stack and its proponents like Max Altschuler helped move the profession forward by giving sales reps a ridiculous amount of new impactful sales tools.

Sales has evolved more slowly over the last 145 years than other disciplines like finance and marketing. But we are now in a sales renaissance. Innovations and new insights will continue to come at an increasing rate. The future looks very bright for those who understand the history, study best practices, and master the new tools of the trade. The combination of the right tools and the right training will power a new generation of tech savvy sales nerds (like myself).

How can you carry on your duties as an entrepreneur to create and develop, if your business is also relying on you to bring in sales?

Considering the relationship, time, and effort a founder/entrepreneur can spend on sales vs. developing their products, building your own SaaS Sales Playbook comes in handy.

Download this step by step guide for free!