Birth of a Sales Tool: LinkedIn Meets eBay

Serial entrepreneur Evan Sohn believes that selling is a broken trade. He’s here to fix it, and he’s attempting to do it with an intuitive venture that is an experiment in sales all its own.

As corporations swell and business moves Web-ward, it can be argued that traditional sales practices — done over a handshake or a phone call — are going the way of the telegraph. New York-based entrepreneur Evan Sohn has watched the transformation first hand, as an early stage executive in leading-edge tech companies like OmniPod, ReefEdge, and Logix. As an employee, decision-maker, and entrepreneur, he sensed an inefficiency in the way sales is conducted in the Internet age. So he embarked on a mission to turn the profession digital.

The product of his observations — called Salesconx — is an online marketplace for sales contacts, where salespeople sell each other contact information about the folks in their Rolodex. Let's say you're a seasoned salesperson; other Salesconx users can pay you a small fee (usually about $100) for an online "introduction" in which you introduce them to one of your contacts. The idea is that every introduction be mutually beneficial; a snowplow salesman, for example, might connect a tire salesman and a truck salesman. Sohn hopes the marketplace will be trustworthy enough that it will allow top salespeople to leave inefficient practices like cold-calling or mass-emailing behind. Think of it as LinkedIn meets eBay.

The business of sales has remained largely intact for hundreds of years. Why does the model need revision now?

When you're doing business, there is always difficulty in finding the right person — the decision maker. It’s not always clear who the buyer is at the enterprise level nor what's the best way to actually get to that person.

In my first company, for example, we relied heavily on cold calling to penetrate a targeted company. I remember calling into what is now Ameritrade and working my way through the organization until I reached the CEO. It took three months, and all started from a cold call.

At my next company, we relied heavily on industry tradeshows, niche tradeshows, and live seminars (remember when Comdex had 220,000 people attending?). Most recently, people have been relying heavily on email marketing and PPC campaigns for effective lead generation. But I found that the more money I spent in marketing, the worse the conversion rates were. I started to look at companies like Craig's List, eBay, LinkedIn, and Prosper.com. I also started speaking to all the sales people that I worked with to see how their lives have changed with the Internet.

The Internet has certainly changed things — but people don't always trust it. Have you accounted for that?

From a development perspective, it was very difficult and time consuming for us to create a sense of trust between users and coding in a way that makes sense. We hit upon many of the same issues that other successful marketplaces, such as eBay, have grappled with. When you are providing an environment for users to do business when they have never actually met, creating the technical features and processes to support this trust is a difficult technical challenge. We provide eBay-like feedback ratings for buyers and sellers, and we also provide how much money they have made using Salesconx. This is a great metric of how much this individual is trusted on the site. In addition, we are launching a Salesconx Associate Program that will provide additional screening of our sellers. Our account management team also talks to every user that registers on our site to make sure that they are appropriate for our marketplace. We reject about 15% of the people who apply for membership.

What convinced you that this could work?

Well, there are a number of pioneers that paved the road for Salesconx. Salesforce.com paved the way for enterprises to trust a hosted service with their business information. Ebay set the stage for a transaction between two individuals that have never met. And social networks have really re-invigorated the notion of a referral as a means of connecting with a targeted individual.

While Salesconx seems very social networking focused, it is much more in line with a true marketplace. Salesconx is allowing businesses to grow through good old fashioned word-of-mouth. The difference is that we are providing nearly 1,200 mouths.

Essentially, our marketplace is trading in human capital — great, trusted relationships with decision makers in numerous industries and in companies of all sizes. There are businesses, marketers, and other sales people willing to compensate these folks for getting them into the door of a prospected buyer. We make that happen.

Can you give me an example?

Here's one: a seasoned telecommunications sales rep was faced with a common situation; his client, a New York firm with 30 desktops, needed to find an IT management firm to manage their desktops. The sales rep posted on Salesconx and three companies responded. The sales rep did some quick research on the three companies and selected one of them to introduce directly to his client. All three parties benefited — only this time the sales rep made some money along the way. And why shouldn't he? Shouldn't he be compensated by the IT management firm? This introduction was incredibly valuable to the IT management firm, and they have no problem paying the sales rep for his service.

Of course, software tools to maximize sales already exist, don't they?

I was impressed early on that CRM tools, analytic software, presentation tools, etc. were all designed in the hopes of taking "B" rated sales people and making them into "A" players. But the Internet never actually helped the "A" player. Top sales people were expected to cold call 20 years ago and the same holds true today.

In fact, most eCommerce tools were designed to dis-intermediate the sales person from the process. A company spending money on banner ads to drive potential customers to its website is really not about feeding quality leads to the top sales representatives — it's driving leads to an inside sales team. Inside sales used to mean support for the outside sales force. Today, in many instances, inside sales means those who are handling leads as a result of lead generation demands. When I talk to top sales people today, many of them feel that their perceived value has diminished in the past 10 years.

Is Salesconx working?

We now have about 1,200 users, and our traffic is growing by 30% every month. Our transaction volume doubled from December to January as more and more businesses, marketers, and selling professionals are realizing just how easy is to drive revenue and make money using Salesconx. We are seeing businesses of all sizes — from consultants to larger enterprises — taking advantage of the pay-for-performance model of Salesconx.

What's the future of sales?

I recently heard an executive at a conference say that sales today are "algorithmic." I disagree. Sales is, and always will be, about a relationship between a buyer and a seller. The fundamental concept of Salesconx is to embrace sales people, leveraging their knowledge and trust with the decision maker and incorporating them into the lead generation process as a conduit to the customer.

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2 Comments

  • Chris Carter Brennan

    I'd be very disappointed if one of my team went on line and started selling company data. The data isn't owned by the "rep". Some of this data is obtained via a chargeable one time use database, or sheer hard graft. It might be an OK process for a self employed business person, but I certainly wouldnt encourgage practises that could breach the contract of a purchased database, breach the employment contract regarding confidentiality of company data - or potentially deliver information into a competitors hands. Not for me.

  • Steve Lavi

    It seems that the FastCompany.com site has lost ALL postings and comments for at least the last 10 days. I see postings ONLY dated FEB.

    Also Group moderators are locked out.

    Is anyone experiencing similar issues ???