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Before in the 1980s, salespersons worked in ‘local offices’ which were responsible for catering customers within a specific geographical region. The salesperson was the professional correspondent who met with key buyers within his jurisdiction and is the knowledgeable product expert who often traveled to meet with clients. However, as a salesperson is often only capable of being well versed with one product, multiple salesperson who are specialized in different products from the selling organization had to be deployed to meet various customer needs and demands which constitutes the sales force (Webster 1980, cited in Sharma 2007).
As computer hardware and software improvements gradually follow over the years, small and larger firms started to recognized that some amount of sales function can be made more efficient with sales force automation (Engle & Barnes 2000).
Sales force automation is the digitalizing of analogue sales through information technology (Rivers & Dart 1999). It is also used as a tool to implement a new marketing strategy known as customer relationship management (CRM) (Speier & Venkatesh 2002). However, sales force automation has brought its own advantages and disadvantages to the business at the same time.
Sales force automation has smoothen the interaction between the firm and customers with a smaller sales force. The customers can quickly access the product’s information through the firm’s website (Larpsiri & Speece 2004). When there is an enquiry about the product, the customers need not approach the salesperson in person, or even when they have enquiries about different products, they need not approach different salesperson. They just have to log on to the website and browse through for different product information at the same time. This has in turn reduced the number of salespersons. For example, a customer can visit Hewlett Packard’s website to check on different types of products such as desktops and printers from the website, they can compare the prices of different models. With the website, Hewlett Packard does not need to hire different salespeople for the different types of products to explain the advantages of the products to the customers one by one (Johnson & Bharadwaj 2005).
This form of sales force automation can improve customer service by providing more than just information about their products. Information can be provided specifically to answer the customer’s query (Sharma 2007). If customers have any doubts on a particular product, they can check on the frequently asked questions (FAQs).
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The advantages of sales force automation for the salesperson is twofold. It improves the efficiency of the salesperson by speeding up the data processing designed with more precise customer information, and increases their effectiveness by allowing the salesperson to concentrate on customer relations strategies.
Taylor (1994) and Verity (1993) (cited from Johnson & Bharadwaj 2005) have both agreed that a salesperson can be more productive if their hands are free from dealing with menial administrative details. With a proper automation system, it also improves the chances of having less discrepancy in the sales process that helps to save corrective or sales support costs. The salesperson is also becomes better equipped with customer and product information that is within arm’s reach to provide a solution to the customer’s needs in a more timely manner.
In a service-based industry, Larpsiri & Speece (2004) have observed that sales force automation has also positively improved the image of the salesperson to the customer. From the sales force automation toolbox, such as laptops, PDAs or other mobile hardware installed with appropriate software, the salesperson is able to meet appointments on time, remain in contact with customers at all times and have a better grip of time management. Not only that, the salesperson is able to use business application from their work desktop to prepare business presentation and proposals as well as other documentation which saves time and shows sign of professionalism. This projects a sense of competency of the salesperson, his confidence to his customers which builds trust that is crucial to a service provider business.
The benefits of sales force automation also helps to improve sales performance of the salesperson. They have been noted to use computers in direct selling that involves the customers as a more significant factor in improving sales than using computers for administrative and data processing in a multinational company (Engle & Barnes 2000).
Salespersons who use web-based forms of sales force automation have fully delegated their sales job to the website. Instead they dedicate their effort in planning for developing strategies to score better in targeted market segments with customer analysis and consultative or team selling (Johnson & Bharadwaj 2000). While the sales force automation system is ensured to take care of the sales transaction and supporting activities, the salesperson is given the freedom to advance with these more refined and precise selling activities that will generate more revenues.
However, organizational size has been found to be positively linked with the adoption of sales force automation and its benefits. Weerahandi and Moitra (1995) (cited from Rivers & Dart 1999) have found that larger companies have more budget to install sales force automation systems compared with smaller firms and have enough funding to fix any problems that the system may have. The large amount of cost that comes with sales force automation discourages the smaller firms to use sales force automation because they cannot afford the expenses to purchase and hired the necessary expertise to maintain the sales force automation system. Smaller firms are also less likely to gain any returned benefits from implementing sales force automation than larger firms which exploits the economies of scale. This makes sales force automation an option that is more practical or viable only for large sized corporation rather than small to medium enterprises (SME).
The adoption of sales force automation has also adverse effects on the salespeople. Sales force automation can lead them to believe they are losing their competencies in the organization. Due to that, they think they do not have any important role in the particular company since their jobs are being replaced by the sales force automation system. This has resulted in increases of companies’ personnel turnover rate in the telecommunication and real estate industries (Speier & Venkatesh 2002).
Resistance in utilizing sales force automation is also high in countries that have a matured sales force. The more experienced the salespeople, the harder they adapt to sales force automation. The older and more experienced salespeople, who predate sales force automation, have gotten used to the old methods of selling and they rarely utilize computer systems to its full potential. Conversely, only the newer and younger salespeople have more experiences with computers, so they are easier to adopt the sales force automation (Engle & Barnes 2000). This has organizational implications because the management would have to consider whether sales force automation can be properly implemented if they have a matured sales force.
Besides, the sales force automation is found to have different impacts in different business industries. For those firms who emphasize on services, the adoption of sales force automation may not bring any benefits if customer satisfaction is low (Larpsiri & Speece 2004). For example in the insurance industry, customers still prefer to communicate with salespeople rather than with machines. The salespeople are more “friendly” and “approachable”. This is what the “cold” machine cannot do. Both customers and salesperson felt that sales force automation of any kind could not replace the important role that the salesperson plays in gaining the trust of the customers (Larpsiri & Speece 2004). Trust is the commodity that carries more value between the organization and customers which is upheld by the integrity of the staff rather than the technological level of the sales force automation system.
In the telecommunication and real estate industries as mentioned earlier, customers are dealing with companies in standard routines of business. Sales force automation makes it easier and faster to deal with these customers but then has caused negative effects on the salesperson who feel obsolete.
In conclusion, since the sales force automations bring advantages to salespeople and customers but at the same time bring disadvantages according to the company’s size and the customer’s perceptions, the company has to analyze the issue considerably before they want to decide whether to apply sales force automation or not.
Engle, RL & Barnes, ML 2000, ‘Sales force automation usage, effectiveness, and cost-benefit in Germany, England and the United States’, The Journal of Business & Industrial Marketing, vol. 15, Issue 4, pp. 216-233, (online ProQuest).
Johnson, DS & Bharadwaj, S 2005, ‘Digitization of selling activity and sales force performance: an empirical investigation’, Academy of Marketing Science Journal, vol. 33, Winter, pp. 3-18, (online ProQuest).
Larpsiri, R & Speece, M 2004, ‘Technology integration: perception of sales force automation in Thailand’s life assurance industry’, Marketing Intelligence & Planning, vol. 22, No.4, pp.392-406, (online ProQuest).
Rivers, LM & Dark, J 1999, ‘The acquisition and use of sales force automation by mid-sized manufacturers’, The Journal of Personal Selling & Sales Management, vol. 19, Spring, pp. 59-70, (online ProQuest).
Sharma, A 2007, ‘The shift in sales organizations in business-to-business services’, The Journal of Services Marketing, vol. 21, Issue 5, pp. 326-336, (online ProQuest).
Speier, C & Venkatesh, V 2002, ‘The hidden minefields in the adoption of sales force automation technologies’, Journal of Marketing, vol. 66, July, pp. 98-111, (online ProQuest).