Tuesday, January 26, 2010

disintermediation part 3: universal spiff

Retail stores are struggling because it's cheaper and better to buy things on the web. I see something I want in the store, but I wonder if that model is highly rated, and I know I can get it cheaper online. Yet manufacturers still need to get goods in front of customers in the real world where they can see, touch, and use them in order to make the sale. Some companies have tried manufacturer stores, but they are hampered by not undercutting other stores (my local Sony Style store closed a year ago).

When I worked in tech support, if a support engineer was able to convince a customer that they needed a product (often a paid upgrade to the new version that addressed the problem) , the employee would transfer the phone call to sales and get a small commission on the sale. This is called a “spiff”: A bonus or other remuneration, given for ... promoting the goods of a particular manufacturer.. The problem is if the customer later on bought the product because of that person's assistance, there was no way the employee could get compensated. I've also gone out on sales calls where my technical knowledge sealed the deal, yet the sales person got the commission.

My thesis is companies have a certain promotional budget for the sale of an item, and they should be willing to hand sum over to anyone on ANY sale. They already do this on click-through ads for web sites, but they should extend this to the world of people.

It would work somewhat like this:
Enter the e-mail address of the person who led you to buy this product: __@___

So whether someone demonstrated the laptop at the Sony lifestyle store, or someone showed it to you at a convention, or you saw a book at a bookstore but guiltily purchased it online instead, or your mechanic told you to buy some accessory, or you read a rave review about something on a blog, you can credit the person who led to your purchase.

This would encourage and liberate millions of people to sell things, and it would break down the artificial division between salespeople selling a product and the many people whose efforts can lead to a sale. It would provide a financial model for company "stores" and marketing events that merely demonstrate items yet often spur sales.

Companies probably wouldn't allow any e-mail address, they would have a known list of approved promoters: all their employees, partners, people on certain web sites. The system has vast potential for "abuse", e.g. someone who had nothing to do with the sale would offer to split the spiff with the buyer. But the abuse still leads to increased sales!

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