Many new technologies, even valuable ones, arrive in the world with more hype than substance. Over time, their value is revealed as applications proliferate and adoption ramps. But until then, it can be difficult to parse what’s truly impactful from what is simply noise. In this regard, blockchain is no exception. Though touted as a disruptive platform, most firms have yet to see blockchain’s impact. But it would be a mistake to discount blockchain’s potential, however slow to develop. In this article we will review blockchain and explore its potential impact on sales and sales leadership.
Transactions are the economy’s most basic unit of measurement, and millions of transactions occur every second. When a transaction takes place between two parties it is recorded by the buyer, the seller, and the transaction enablers. If your pottery business sells 6,000 flower pots to a big box retailer you will record the sales, the big box retailer will record the purchase, and your respective banks will record the exchange of money.
This process has been in place since the advent of the modern banking system. Blockchain is challenging this status quo with the promise of transforming how transactions are recorded. Does this prophesied revolution have far reaching implications on the sales organization? The answer is complicated, but suggests that sales leaders pay close attention as developments unfold.
What is Blockchain?
Simply put, blockchain is a system of recording every single transaction that occurs between two parties in the ledgers of every participant without a way of altering the record retrospectively. Thus blockchain eliminates the needs for a centralized third party to store and validate the transaction.
While blockchain technology is mostly know for cryptocurrencies like Bitcoin, it is already being used across a diverse field of business problems. On August 10th 2018, the World Bank, in collaboration with Commonwealth Bank of Australia, announced that it will release the world’s first bond based on blockchain technology “to streamline processes among numerous debt capital market intermediaries and agents”. TradeLens, a joint effort between Maersk and IBM, is already proving to be an effective blockchain-based supply chain platform that has the potential to save up to “40% on shipping costs and thousands of dollars per transaction”.
Furthermore, with the Ethereum Project the technology is being used in smart contracting, while Stroj uses blockchain to provide safe and flexible cloud storage and web services. Salesforce also announced in March 2018 that they are working on a product integrating blockchain technology with their offerings.
So what does blockchain mean for the future of sales?
This is where the picture gets murky. While there are certain inherent qualities of the blockchain technology that are well-suited to sales applications, most of the predicted impact is incremental in nature. Currently blockchain offers solutions to problems that are already in the process of being tackled through other technological solutions. However, these incremental changes taken together could mean a significantly streamlined end-to-end sales process.
Here are some key areas where the technology could be impactful:
Trust and Transparency
Blockchain is built on the premise of trust and transparency, an image that sales organizations labour to project. Sales reps want their clients to trust them, but often this trust is hard to build due to the centralized nature of information. Sales reps can be the gatekeepers of knowledge, and buyers have few resources to verify the information presented to them.
With the advent of the internet, buyers have indeed gained substantially greater access through peer to peer feedback, online reviews, and competitor analysis. But there is still a long way to go until a fully transparent system is built. Blockchain technology could help with this next step and establish complete transparency.
All the information that sellers wants to disseminate to the buyers can be put on the ledger and can be accessed independently by the potential buyers. This is easier said than done, as an open ledger also means that sellers loses the ability to price discriminate.
Customers are increasingly becoming more cautious of providing personal data online due to the growing fear of data hacks and data misappropriation. Hence CRM tools need to evolve to cater to these concerns. A blockchain-based CRM could solve this problem and address issues that plague current CRM softwares: fragmented existence of data that is often hard to analyse.
Employees typically rely on big data analytics, and other tools to mine information and create the needed slice of information, but the process is time-consuming and quite often flawed. Blockchain-based CRM could deliver more data consistency without sacrificing application flexibility. As a result, data silos will break down. Rather than multiple copies of a customer’s personal information confined in various systems, the whole organization has access to one set of characteristics for each profile.
For a sales rep this could mean greater success in scoring and qualifying leads. Poor leads could be marked as such throughout the organization and this system could eliminate duplicated effort. An open ledger would also ensure that leads can be tracked and their position in the sales pipeline is clear.
Another application for blockchain that is being explored is data storage and recordkeeping. Contracts, correspondences, proposals, memos, receipts, and any other document can be stored digitally on a blockchain, giving businesses a clear and accurate image of what happened and when. This form of transparent record keeping will also simultaneously eliminate false self-reporting by sales reps who are just looking to meet their quotas.
But there are many problems with this blockchain-driven approach. We already have multiple applications like Dropbox or Box.com that can securely store data and sync it across the system. Blockchain also relies on a single factor authentication rather than a far superior two-factor authorization system that includes features like intrusion detection, volume limits, firewalls, remote IP tracking, and the ability to disconnect the system in an emergency.
Speed of Transaction
Transactions and ledger updates through blockchain are instantaneous throughout the ecosystem. As a result, precious time is not lost waiting for bank transfers to go through. Sales reps could receive payments quickly and get their commissions on time.
But this speed comes with a limitation. While Visa can handle sixty thousand transactions per second, Bitcoin historically has managed only seven. For larger corporations that do multiple transaction every minute, this limitation might be unacceptable.
Tracking sales after a product has been sold to a vendor is often a huge challenge for companies with indirect channel partners. Companies have no control over the end-user experience and little visibility into the sales process after the initial sales. This problem is highly relevant to the high-tech industry; according to an estimate by Accenture, 80% of all sales are indirect sales. Such companies are forced to invest in collecting sales data through expensive third-party aggregators.
In principle Blockchain has the ability to completely change the way such sales happen. Since the ledger is publicly visible, high-tech companies could easily track sales down to the end user and get full visibility into their sales process.
That said, any adoption of the blockchain technology in the indirect sales channel would require significant investment by channel partners. On the other hand, increased transparency would mean that companies are less reliant on channel partners and third-party data brokers for data. These two factors together may result in reluctance of the broader ecosystem to adopt the technology.
So is Blockchain the future?
Things are clear. Blockchain is not the present. But the technology will continue to evolve. Once the underlying issues that limit it are resolved, it is likely to play some part in the future of sales, and as sales leaders we will continue to monitor it closely.