Lean consumption

During the past 20 years, the real price of most consumer goods has fallen worldwide, the variety of goods and the range of sales channels offering them have continued to grow, and product quality has steadily improved. So why is consumption often so frustrating? It doesn't have to be--and shouldn't be--the authors say. They argue that it's time to apply lean thinking to the processes of consumption--to give consumers the full value they want from goods and services with the greatest efficiency and the least pain. Companies may think they save time and money by off-loading work to the consumer but, in fact, the opposite is true. By streamlining their systems for providing goods and services, and by making it easier for customers to buy and use those products and services, a growing number of companies are actually lowering costs while saving everyone time. In the process, these businesses are learning more about their customers, strengthening consumer loyalty, and attracting new customers who are defecting from less user-friendly competitors. The challenge lies with the retailers, service providers, manufacturers, and suppliers that are not used to looking at total cost from the standpoint of the consumer and even less accustomed to working with customers to optimize the consumption process. Lean consumption requires a fundamental shift in the way companies think about the relationship between provision and consumption, and the role their customers play in these processes. It also requires consumers to change the nature of their relationships with the companies they patronize. Lean production has clearly triumphed over similar obstacles in recent years to become the dominant global manufacturing model. Lean consumption, its logical companion, can't be far behind.     

Best face forward

Most companies serve customers through a broad array of interfaces, from retail sales clerks to Web sites to voice-response telephone systems. But while the typical company has an impressive interface collection, it doesn't have an interface system. That is, the whole set does not add up to the sum of its parts in its ability to provide service and build customer relationships. Too many people and too many machines operating with insufficient coordination (and often at cross-purposes) mean rising complexity, costs, and customer dissatisfaction. In a world where companies compete not on what they sell but on how they sell it, turning that liability into an asset is what separates winners from losers. In this adaptation of their forthcoming book by the same title, Jeffrey Rayport and Bernard Jaworski explain how companies must reengineer their customer interface systems for optimal efficiency and effectiveness. Part of that transformation, they observe, will involve a steady encroachment by machine interfaces into areas that have long been the sacred province of humans. Managers now have opportunities unprecedented in the history of business to use machines, not just people, to credibly manage their interactions with customers. Because people and machines each have their strengths and weaknesses, company executives must identify what people do best, what machines do best, and how to deploy them separately and together. Front-office reengineering subjects every current and potential service interface to an analysis of opportunities for substitution (using machines instead of people), complementarity (using a mix of machines and people), and displacement (using networks to shift physical locations of people and machines), with the twin objectives of compressing costs and driving top-line growth through increased customer value.     

Bottom-feeding for blockbuster businesses

Marketing experts tell companies to analyze their customer portfolios and weed out buyer segments that don't generate attractive returns. Loyalty experts stress the need to aim retention programs at "good" customers--profitable ones- and encourage the "bad" ones to buy from competitors. And customer-relationship-management software provides ever more sophisticated ways to identify and eliminate poorly performing customers. On the surface, the movement to banish unprofitable customers seems reasonable. But writing off a customer relationship simply because it is currently unprofitable is at best rash and at worst counterproductive. Executives shouldn't be asking themselves, How can we shun unprofitable customers? They need to ask, How can we make money off the customers that everyone else is shunning? When you look at apparently unattractive segments through this lens, you often see opportunities to serve those segments in ways that fundamentally change customer economics. Consider Paychex, a payroll-processing company that built a nearly billion-dollar business by serving small companies. Established players had ignored these customers on the assumption that small companies couldn't afford the service. When founder Tom Golisano couldn't convince his bosses at Electronic Accounting Systems that they were missing a major opportunity, he started a company that now serves 390,000 U.S. customers, each employing around 14 people. In this article, the authors look closely at bottom-feeders--companies that assessed the needs of supposedly unattractive customers and redesigned their business models to turn a profit by fulfilling those needs. And they offer lessons other executives can use to do the same.     

Don't homogenize, synchronize.

To be more responsive to customers, companies often break down organizational walls between their units--setting up all manner of cross-business and cross-functional task forces and working groups and promoting a "one-company" culture. But such attempts can backfire terribly by distracting business and functional units and by contaminating their strategies and processes. Fortunately, there's a better way, says the author. Rather than tear down organizational walls, a company can make them permeable to information. It can synchronize all its data on products, filtering the information through linked databases and applications and delivering it in a coordinated, meaningful form to customers. As a result, the organization can present a single, unified face to the customer--one that can change as market conditions warrant--without imposing homogeneity on its people. Such synchronization can lead not just to stronger customer relationships and more sales but also to greater operational efficiency. It allows a company, for example, to avoid the high costs of maintaining many different information systems with redundant data. The decoupling of product control from customer control in a synchronized company reflects a fundamental fact about business: While companies have to focus on creating great products, customers think in terms of the activities they perform and the benefits they seek. For companies, products are ends, but for customers, products are means. The disconnect between how customers think and how companies organize themselves is what leads to inefficiencies and missed opportunities, and that's exactly the problem that synchronization solves. Synchronized companies can get closer to customers, sustain product innovation, and improve operational efficiency--goals that have traditionally been very difficult to achieve simultaneously.     

Companies and the customers who hate them

Why do companies bind customers with contracts, bleed them with fees, and baffle them with fine print? Because bewildered customers, who often make bad purchasing decisions, can be highly profitable. Most firms that profit from customers' confusion are on a slippery slope. Over time, their customer-centric strategies for delivering value have evolved into company-centric strategies for extracting it. Not surprisingly, when a rival comes along with a friendlier alternative, customers defect. Adversarial value-extracting strategies are common in such industries as cell phone service, retail banking, and health clubs. Overly complex product and pricing options, for example, may have been designed to serve various segments. But in fact they take advantage of how difficult it is for customers to predict their needs (such as how many cell phone minutes they'll use each month) and make it hard for them to choose the right product. Similarly, penalties and fees, which may have been instituted to offset the costs of undesirable customer behavior, like bouncing checks, turn out to be very profitable. As a result, companies have no incentive to help customers avoid them. Tactics like these generate bad publicity and fuel customer defections, creating opportunities for competitors. Virgin Mobile USA, for example, has lured millions of angry cell phone customers away from the incumbents by offering a straightforward plan with no hidden fees, no time-of-day restrictions, and no contracts. ING Direct, now the fourth-largest thrift bank in the United States, offers accounts with no fees, no tiered interest rates, and no minimums. In industries where squeezing value from customers is commonplace, companies that dismantle these harmful practices and design a transparent, value-creating offer can head off customer retaliation and spur rapid growth.     

The four faces of mass customization

Virtually all executives today recognize the need to provide outstanding service to customers. Focusing on the customer, however, is both an imperative and a potential curse. In their desire to become customer driven, many companies have resorted to inventing new programs and procedures to meet every customer's request. But as customers and their needs grow increasingly diverse, such an approach has become a surefire way to add unnecessary cost and complexity to operations. Companies around the world have embraced mass customization in an attempt to avoid those pitfalls. Readily available information technology and flexible work processes permit them to customize goods or services for individual customers in high volumes at low cost. But many managers have discovered that mass customization itself can produce unnecessary cost and complexity. They are realizing that they did not examine thoroughly enough what kind of customization their customers would value before they plunged ahead. That is understandable. Until now, no framework has existed to help managers determine the type of customization they should pursue. James Gilmore and Joseph Pine provide managers with just such a framework. They have identified four distinct approaches to customization. When designing or redesigning a product, process, or business unit, managers should examine each approach for possible insights into how to serve their customers best. In some cases, a single approach will dominate the design. More often, however, managers will need a mix of some or all of the four approaches to serve their own particular set of customers.     

M&A needn't be a loser's game

Three out of four acquisitions fail; they destroy wealth for the buyer's shareholders, who end up worse off than they would have been had the deal not been done. But it doesn't have to be that way, argue the authors. In evaluating acquisitions, companies must look beyond the lure of profits the income statement promises and examine the balance sheet, where the company keeps track of capital. It's ignoring the balance sheet that causes so many acquisitions to destroy shareholders' wealth. Unfortunately, most executives focus only on sales and profits going up, never realizing that they've put in motion a plan to destroy their company's true profitability--its return on invested capital. M&A, like other aspects of running a company, works best when seen as a way to create shareholder value through customers. Some deals are sought to help create better value propositions for the business or to better execute current strategies--or to block competitors from doing these things. But most deals are about customers and should start with an analysis of customer profitability. Some customers are deliciously profitable; others are dismal money losers. The better an acquirer understands the profitability of its own customers, the better positioned it will be to perform such analyses on other companies. In this article, the authors show that customer profitability varies far more dramatically than most managers suspect. They also describe how to measure the profitability of customers. By understanding the economics of customer profitability, companies can avoid making deals that hurt their shareholders, they can identify surprising deals that do create wealth, and they can salvage deals that would otherwise be losers.     

Activity-Based Pricing in a Monopoly

In this article, I study the interaction between cost accounting systems and pricing decisions in a setting where a monopolist sells a base product and related support services to customers whose preference for support services is known only to them. I consider two pricing mechanisms—activity‐based pricing (ABP) and traditional pricing—and two cost‐accounting systems—activity‐based costing (ABC) and traditional costing, for support services. Under traditional pricing, only the base product is priced, whereas support services are provided free because detailed cost‐driver volume information on the consumption of support services by each customer is unavailable. Under ABP, customers pay based on the quantities consumed of both the base product and the support services because detailed cost‐driver volume information is available for each customer. Likewise, under traditional costing for support services the firm makes pricing decisions on cost signals that are noisier than they are under ABC. I compare the equilibrium quantities of the base product and support services sold, the information rent paid to the customers, and the expected profits of the monopolist under all four combinations of cost‐driver volume and cost‐driver rate information. I show that ABP helps reduce control problems, such as moral hazard and adverse selection problems, for the supplier and increases the supplier's ability to engage in price discrimination. I show that firms are more likely to adopt ABP when their customer base is more diverse, their customer support costs are more uncertain, their costing system has lower measurement error, and the variable costs of providing customer support are higher. Firms adopt ABC when their cost‐driver rates for support services under traditional costing are noisier measures of actual costs relative to their cost‐driver rates under ABC and when the actual costs of support services are inherently uncertain. I also show that cost‐driver rate information and cost‐driver volume information for support services are complements. Although the prior literature views ABC and activity‐based management (ABM) as facilitating better decision making, I show that ABC and ABP (a form of ABM) are useful tools for addressing control problems in supply chains.     

The customer has escaped

Every company makes choices about the channels it will use to go to market. Traditionally, the decision to sell through a discount superstore or a pricey boutique, for instance, was guided by customer demographics. A company would identify a target segment of buyers and go with the channel that could deliver them. It was a fair assumption that certain customer types were held captive by certain channels--if not from cradle to grave, then at least from initial consideration to purchase. The problem, the authors say, is that today's customers have become unfettered. As their channel options have proliferated, they've come to recognize that different channels serve their needs better at different points in the buying process. The result is "value poaching." For example, certain channels hope to use higher margin sales to cover the cost of providing expensive high-touch services. Potential customers use these channels to do research, then leap to a cheaper channel when it's time to buy. Customers now hunt for bargains more aggressively; they've become more sophisticated about how companies market to them; and they are better equipped with information and technology to make advantageous decisions. What does this mean for your go-to-market strategy? The authors urge companies to make a fundamental shift in mind-set toward designing for buyer behaviors, not customer segments. A company should design pathways across channels to help its customers get what they need at each stage of the buying process--through one channel or another. Customers are not mindful of channel boundaries--and you shouldn't be either. Instead, they are mindful of the value of individual components in your channels--and you should be, too.     

Knowing what to sell, when, and to whom

Despite an abundance of data, most companies do a poor job of predicting the behavior of their customers. In fact, the authors' research suggests that even companies that take the greatest trouble over their predictions about whether a particular customer will buy a particular product are correct only around 55% of the time--a result that hardly justifies the costs of having a CRM system in the first place. Businesses usually conclude from studies like this that it's impossible to use the past to predict the future, so they revert to the timeworn marketing practice of inundating their customers with offers. But as the authors explain, the reason for the poor predictions is not any basic limitation of CRM systems or the predictive power of past behavior, but rather of the mathematical methods that companies use to interpret the data. The authors have developed a new way of predicting customer behavior, based on the work of the Nobel Prize-winning economist Daniel McFadden, that delivers vastly improved results. Indeed, the methodology increases the odds of successfully predicting a specific purchase by a specific customer at a specific time to about 85%, a number that will have a major impact on any company's marketing ROI. What's more, using this methodology, companies can increase revenues while reducing their frequency of customer contact-evidence that overcommunication with customers may actually damage a company's sales.     

Match your sales force structure to your business life cycle

Although companies devote considerable time and money to managing their sales forces, few focus much thought on how the structure of the sales force needs to change over the life cycle of a product or a business. However, the organization and goals of a sales operation have to evolve as businesses start up, grow, mature, and decline if a company wants to keep winning the race for customers. Specifically, firms must consider and alter four factors over time: the differing roles that internal salespeople and external selling partners should play, the size of the sales force, its degree of specialization, and how salespeople apportion their efforts among different customers, products, and activities. These variables are critical because they determine how quickly sales forces respond to market opportunities, they influence sales reps' performance, and they affect companies' revenues, costs, and profitability. In this article, the authors use timeseries data and cases to explain how, at each stage, firms can best tackle the relevant issues and get the most out of their sales forces. During start-up, smart companies focus on how big their sales staff should be and on whether they can depend upon selling partners. In the growth phase, they concentrate on getting the sales force's degree of specialization and size right. When businesses hit maturity, companies should better allocate existing resources and hire more general-purpose salespeople. Finally, as organizations go into decline, wise sales leaders reduce sales force size and use partners to keep the business afloat for as long as possible.     

The new science of sales force productivity

For years, sales managers at many companies have relied on top performers and sheer numbers of sales reps to stay competitive. But while they may have squeaked by on this wing-and-a-prayer technique, their sales teams haven't thrived the way they once did. Today's most successful sales leaders are taking a more scientific approach. Savvy managers are reshaping their tactics in response to changing markets. They are reaching out to new customers in innovative ways. And they are increasing productivity by helping the reps they already have make the most of their skills and resources. Leaders who take a scientific approach to sales force effectiveness have learned to use four levers to boost their reps' productivity in a predictable and manageable way. First, they systematically target their firms' offerings, matching the right products with the right customers. Second, they optimize the automation, tools, and procedures at their disposal, providing reps with the support they need to boost sales.Third, they analyze and manage their reps' performance, measuring both internal processes and results to determine where their teams' strengths and weaknesses are. Fourth, they pay close attention to sales force deployment--how well sales, support, marketing, and delivery resources are matched to customers. These four levers can help sales leaders increase productivity across the board, the authors say, though they have the greatest impact on lower-ranked performers. The overall effect of increasing the average sales per employee can be exponential; it means a company won't have to rely on just a few talented individuals to stay competitive. This is especially important because finding and keeping star salespeople is more difficult than ever. What's more, managers who optimize the sales forces they already have can see returns they never thought possible.     

Take command of your growth

Ask senior managers to pare costs by 10%, and they know just what to do. Ask them to boost growth by 10%, and they're stymied, assuming that growth is not really something they can influence. But managers can control their company's growth if they have better information about where their revenues are coming from. Rather than sort sales by geographic market, business unit, or product line, they should break them out in a way that reveals which part of their strategy is responsible for what part of their revenue. This article presents a tool--the sources of revenue statement (SRS)--that does just that. Through straightforward calculations using data taken from a company's balance sheet, along with estimations of customer-churn and industry growth rates, the SRS enables managers to classify their revenue according to five sources of growth: continuing sales to established customers (base retention); sales won from the competition (share gain); sales that fell into their laps because the market was expanding (market position); sales from moves into adjacent markets; and sales from entirely new lines of business. Once sorted in this way, revenue can be viewed as the outgrowth of manageable circumstances. At one company, seemingly healthy 10% total revenue growth masked substantial customer defections counter-balanced only by sales in a fast-expanding market--a market that actually grew faster than the company did. Rather than doing well, the company was ceding customers and market share to competitors. Comparing the sources of revenue across divisions can uncover similarly profound insights, which can suggest smart ways to change strategy or set stretch goals. Hundreds of companies are perched atop enormous potential that they can't see and so don't exploit. The SRS can endow them with sight and, more important, with understanding.     

Three Common Misconceptions About Markets (or Why Earnings Smoothing,Guidance, and Concern About Meeting Consensus Estimates are Likely to be Counterproductive)

Although many executives strive for stable earnings growth, finance theory and research have long suggested that the most sophisticated investors aren't especially concerned about “normal” levels of variability in reported earnings. More recent research by the authors and their McKinsey colleagues also suggests that extraordinary efforts to achieve steady growth in earnings per share quarter after quarter aren't worthwhile and may actually hurt the companies that undertake them. While such efforts to smooth earnings involve real costs, the research finds no meaningful relationship between earnings variability and valuation multiples or shareholder returns. Based on these findings, as well as considerable experience in advising companies, the authors offer the following advice to senior executives:

• Managers shouldn't shape their earnings targets or budgets just to meet consensus estimates. Companies that reduce spending on product development, sales and marketing, or other contributors to long‐term growth are sacrificing long‐term performance for the appearance of short‐term strength.
• As the year progresses, managers should likewise avoid costly, shortsighted actions to meet the consensus. Resist the temptation to offer customers end‐of‐year discounts to boost current‐year sales, or to resort to creative accounting with accruals. Investors recognize these for what they are: borrowing from next year's earnings.

Finally, companies should reconsider the practice of quarterly earnings guidance. Instead of providing frequent earnings guidance, companies should design their investor communication policies to help the market to understand their strategy, the underlying value drivers of their business, and the most important risks associated with the business—in short, to understand the long‐term health and value of the enterprise.     

How to sell services more profitably

When products become commodities, manufacturing companies may seek to differentiate themselves with value-added services--a potentially profitable strategy. Unfortunately, companies often stumble in the effort. Reinartz and Ulaga conducted in-depth studies of 18 leading companies in a broad variety of product markets to learn what distinguished the successes from the rest. They discovered four steps to developing a profitable services capability. RECOGNIZE THAT YOU ALREADY HAVE A SERVICE COMPANY: You can identify and charge for simple services--as Merck did when it stopped quietly absorbing shipping costs. Switching services from free to fee clarifies their value for managers as well as for customers. INDUSTRIALIZE THE BACK OFFICE: To prevent delivery costs from eating up service-offering margins, build flexible service platforms, closely monitor process costs, and exploit new technologies that enable process innovations. The Swedish bearings manufacturer SKF provided off-site access to an online monitoring tool that could warn of potential failure in customers' machines. CREATE A SERVICE-SAVVY SALES FORCE: Services require longer sales cycles and, often, decisions from high up in a customer's hierarchy; what's more, product salespeople may be inimical to change. Schneider-Electric did a major overhaul of its sales organization and trained its people to switch from cost-plus pricing to value-based pricing. FOCUS ON CUSTOMERS' PROCESSES AND THE OPPORTUNITIES THEY AFFORD FOR NEW SERVICE OFFERINGS: You may need to acquire new capabilities to take advantage of those opportunities: The industrial coatings specialist PPG had to learn how painting robots function after it offered to take over Fiat's Torino paint shop. Services can both lock in customers and help acquire new accounts. They should be developed with care and attention.     

Tailored logistics: the next advantage

How many top executives have ever visited with managers who move materials from the factory to the store? How many still reduce the costs of logistics to the rent of warehouses and the fees charged by common carriers? To judge by hours of senior management attention, logistics problems do not rank high. But logistics have the potential to become the next governing element of strategy. Whether they know it or not, senior managers of every retail store and diversified manufacturing company compete in logistically distinct businesses. Customer needs vary, and companies can tailor their logistics systems to serve their customers better and more profitably. Companies do not create value for customers and sustainable advantage for themselves merely by offering varieties of goods. Rather, they offer goods in distinct ways. A particular can of Coca-Cola, for example, might be a can of Coca-Cola going to a vending machine, or a can of Coca-Cola that comes with billing services. There is a fortune buried in this distinction. The goal of logistics strategy is building distinct approaches to distinct groups of customers. The first step is organizing a cross-functional team to proceed through the following steps: segmenting customers according to purchase criteria, establishing different standards of service for different customer segments, tailoring logistics pipelines to support each segment, and creating economics of scale to determine which assets can be shared among various pipelines. The goal of establishing logistically distinct businesses is familiar: improved knowledge of customers and improved means of satisfying them.     

Customer-centered brand management

Most executives today agree that their efforts should be focused on growing the lifetime value of their customers. Yet few companies have come to terms with the implications of that idea for their marketing management. Oldsmobile, for example, enjoyed outstanding brand equity with many customers through the 1980s. But as the century wore further on, the people who loved the Olds got downright old. So why did General Motors spend so many years and so much money trying to reposition and refurbish the tired,tarnished brand? Why didn't GM managers instead move younger buyers along a path of less resistance, toward another of the brands in GM's stable--or even launch a wholly new brand geared to their tastes? Catering to new customers, even at the expense of the brand, would surely have been the path to profits. The reason, argue the authors, is that in large consumer-goods companies like General Motors, brands are the raison d'etre. They are the focus of decision making and the basis of accountability. But this overwhelming focus on growing brand equity is inconsistent with the goal of growing customer equity. Drawing on a wide range of current examples, the authors offer seven tactics that will put brands in the service of growing customer equity. These include replacing traditional brand managers with a new position--the customer segment manager; targeting brands to as narrow an audience as possible; developing the capability and the mind-set to hand off customers from one brand to another within the company; and changing the way brand equity is measured by basing calculations on individual, rather than average, customer data.     

Kill a brand, keep a customer

Most brands don't make much money. Year after year, businesses generate 80% to 90% of their profits from less than 20% of their brands. Yet most companies tend to ignore loss-making brands, unaware of the hidden costs they incur. That's because executives believe it's easy to erase a brand; they have only to stop investing in it, they assume, and it will die a natural death. But they're wrong. When companies drop brands clumsily, they antagonize loyal customers: Research shows that seven times out of eight, when firms merge two brands, the market share of the new brand never reaches the combined share of the two original ones. It doesn't have to be that way. Smart companies use a four-step process to kill brands methodically. First, CEOs make the case for rationalization by getting groups of senior executives to conduct joint audits of the brand portfolio. These audits make the need to prune brands apparent throughout the organization. In the next stage, executives need to decide how many brands will be retained, which they do either by setting broad parameters that all brands must meet or by identifying the brands they need in order to cater to all the customer segments in their markets. Third, executives must dispose of the brands they've decided to drop, deciding in each case whether it is appropriate to merge, sell, milk, or just eliminate the brand outright. Finally, it's critical that executives invest the resources they've freed to grow the brands they've retained. Done right, dropping brands will result in a company poised for new growth from the source where it's likely to be found--its profitable brands.     

The quest for customer focus

Companies have poured enormous amounts of money into customer relationship management, but in many cases the investment hasn't really paid off. That's because getting closer to customers isn't about building an information technology system. It's a learning journey-one that unfolds over four stages, requiring people and business units to coordinate in progressively more sophisticated ways. The journey begins with the creation of a companywide repository containing each interaction a customer has with the company, organized not by product, purchase, or location, but by customer. Communal coordination is what's called for at this stage, as each group contributes its information to the data pool separately from the others and then taps into it as needed. In the second stage, one-way serial coordination from centralized IT through analytical units and out to the operating units allows companies to go beyond just assembling data to drawing inferences. In stage three, companies shift their focus from past relationships to future behavior. Through symbiotic coordination, information flows back and forth between central analytic units and various organizational units like marketing, sales, and operations, as together they seek answers to questions like "How can we prevent customers from switching to a competitor?" and "Who would be most likely to buy a new product in the future"? In stage four, firms begin to move past discrete, formal initiatives and, through integral coordination, bring an increasingly sophisticated understanding oftheir customers to bear in all day-to-day operations. Skipping stages denies organizations the sure foundation they need to build a lasting customer-focused mind-set. Those that recognize this will invest their customer relationship dollars much more wisely-and will see their customer-focusing efforts pay offon the bottom line.     

Understanding what your sales manager is up against

Every year, the research firm CSO Insights publishes the results of its Sales Performance Optimization survey, an online questionnaire given to more than 1,000 sales executives worldwide that seeks to examine the effectiveness of key sales practices and metrics. In this article, two partners from CSO provide the 2005 and 2006 survey highlights, which describe the challenges today's sales organizations face and how they're responding. An overall theme is the degree to which the buy cycle has gotten out of sync with the sell cycle. Buyers have always had a buy cycle, starting at the point they perceive a need. Sellers have always had a sales cycle, starting at the point they spot a prospect. Traditionally, the two have dovetailed--either because the seller created the buyer's perception of need or because the buyer pursued a need by contacting a salesperson (often for product information). Now the buy cycle is often well under way before the seller is even aware there is a cycle--in part because of the information asymmetry created by the Internet. The implications for managing a sales organization are profound in that sales training must now address how reps handle an environment in which buyers have more knowledge than they do. The authors offer evidence that sales executives are taking--and should take--aggressive action to train and retain sales talent, manage the sales process, and use sales support technologies to meet the challenges of this new environment.