2.1 The History of Sales

The History of Sales

“Clearly, academia continues to discount the sales profession. The lack of hard academic research and formal university sales curricula further highlights this “player hating.” Is it because professional salespeople are still seen as snake oil salesmen? Or is there just a lack of interest in professional selling? My prediction is that sales is still not considered a hard skill or discipline like marketing or finance. Well, that is about to change.”

-Aaron Ross

1870 – Insurance Begins Role Specialization with Hunters & Farmers

If you haven’t noticed or have been living under a rock for the last…forever, sales has been around since cavemen roamed the earth, bartering with each other. But, let’s start with good ol’ Ben Franklin in 1752: the year “Benjamin Franklin founded America’s oldest, continuously active insurance company.” Apparently at this time, insurance and most household items were subscription products. The “sales rep” would close the deal and then make regular house calls to collect payment each month.

Eventually, the sales rep’s time was fully consumed with collecting payments and didn’t have any extra time for prospecting or selling. That might sound familiar to some of you. To solve this issue, the insurance industry developed what’s called role specialization. This included Account Executive or the Hunter and the Account Manager or the Farmer. If you’re not following, the Hunter was the producer and the Farmer was the collector. 

This new structure within sales was literally an instant success. So, as with most successes, it quickly spread to other industries outside the insurance realm. This role specialization would become the first major advancement 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. One of the best parts or worst parts of the migration was the game changing product called snake oil. Clark Stanley (the original snake oil salesman), doctors and traveling salesmen jumped on board and began aggressively but more importantly, deceptively selling “magic medicines” all across the U.S. As you’ll learn as you grow your sales career and skill, this stigma is something we still deal with today.

During the early 1900s, the sales profession was seen as an occupation for the unethical and unprofessional, because of snake oil salesmen. However, 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 lived by 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 move 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 “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.

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 Tyler).