If you’re a member of a sales force, or in sales management, there is always practical information you must know. You need to know as much as possible about your own products. You need to have a firm grounding about your particular industry and market. Today especially, in the new sales era, you must have as much insight as possible into your prospect companies, their buying processes, and their decision makers.
But what about the overall economic environment in which you operate? Seen or unseen, that environment has principles operating every minute of every day. The very idea of sales is actually rooted in economic theory. And while it may seem that such a theory would constitute very dry reading, be a struggle to understand and really not needed or desired to operate in the day-to-day sales environment, the exact opposite is true. These principles are in fact easily grasped—and the vision they provide can go a long way to assisting you in understanding the background of your very existence within the business world.
Salespeople As Entrepreneurs
What is an entrepreneur? A entrepreneur is someone that is able to see opportunities that others would not and possesses the ingenuity to figure out how to exploit that opportunity for his or her own benefit, the benefit of the community and even of a nation. They have a reliable instinct for estimating the risk in an opportunity and gauging when they should act or not. Entrepreneurs welcome the challenge of being responsible for their own incomes through good and bad. They naturally operate by their own observations, their own conclusions, and their own decisions.
Even a cursory look at salespeople will reveal that they are actually “entrepreneurs within the enterprise.” They, too, excel at spotting an opportunity and acting upon what they see. Sales reps are born risk-takers, and generally have an idea of which risks to take and which to avoid. Rather than be salaried employees, they much prefer working on commission and creating their own financial gains, willing to take any losses in stride. And they definitely operate through their own observations, conclusions, and decisions.
The Bigger Picture
But taking a look at the larger economic picture, what does it really mean to be an entrepreneur? What effects can entrepreneurs create when they really know some of the grounding principles of the economic world in which they operate? The fact is they’re creating these effects whether they intend to or not; knowing the truth of the matter can only arm them to weather the bad times, better understand their risks and take fuller advantage of their opportunities.
An entrepreneur operates in an overall economy within a state or a nation. But a salesperson—an entrepreneur within the enterprise—operates in a smaller version of the same economy within a company and industry.
In this series of blogs, we will be exploring the major principles that make up the economic landscape in which salespeople, the entrepreneurs, operate. We’ll cover the importance of sunk costs—costs that your company has already invested in products or services that must now be profitably recovered through your sales efforts. We’ll go over opportunity cost—the investment your company must make to achieve a sale, and how that affects your actions and your opportunity management itself. We’ll take up the vital importance of subjective value—the perceived value of your product or service in the mind of the prospect. We’ll address comparative advantage—the principle of optimizing a sales force based on differing strengths of salespeople. And we’ll take a firm look at sustainable value—the longer term value of your and your company’s sales activities and how they affect your economic survival potential.
The principles which we’ll be discussing are not new—in fact they are 150 years old and come from the Austrian School of Economics, a school of thought that is probably more relevant in today’s economy than when it was first invented. Central to the Austrian School is the entrepreneur’s causative operation within a free-market economy—a version of which forms the very foundation of the economic landscape in which we find ourselves today.
In applying these principles, you will, in fact, be following the lead of an economic founding father, Henry Hazlitt, who in 1946 wrote, “The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.”
So how would these principles apply to sales and sales management? We welcome you to make the discovery with us.
The principles of entrepreneurship form the core philosophy behind Pipeliner CRM. How could Pipeliner empower your sales force and sales management? Find out by signing up for one of our free webinars.