By D. Bruce Johnston, President, DBJ Associates

Recently I read an article where a well recognized financial services industry consultant suggested that asset management professionals may be missing out if they aren’t using the social networking and blogging capabilities of LinkedIn or Twitter to find jobs and advance their careers.

Why does that surprise him and not me?  

Let’s take it one step further.  I would suggest that asset management firms and their sales management may be missing out if they aren’t using social networking and creating innovative sales practices which create value for both the firm and their customers.  

This isn’t a well-guarded secret as sales organizations outside of the financial services world have created innovative sales practices by employing Web 2.0 next-generation technology, technology designed to provide what we are all looking for: reduced cost of sales, increased productivity and improved sales effectiveness.  

However, as an industry we would rather focus on vanishing margins, blame it on investor paralysis, and continue to slash costs at a pace which is never fast enough to offset dwindling revenues thus fulfilling what the Boston Consulting Group refers to as the “norm”.  According to BCG the norm is companies whose early response to a downturn is usually some modest belt-tightening typically overreact later on in the downturn by cutting costs more than they ultimately need.  The result:  an expensive recovery for the company when the economy recovers.  

If you look outside the financial services industry you’ll find that we are not alone – the economy is having a negative impact on sales in most companies.  What are they doing differently to avoid disaster?  I’ve already told you – creating innovative sales practices, which are focused on creating value for both buyer and seller, powered by Web 2.0 and next-generation technology resulting in reduced cost of sales, increased productivity and improved sales effectiveness. 

What have sales results, productivity gains and costs savings been?  Here are a few examples:

• One software division that is part of a $1 billion company increased its sales 12% while decreasing headcount 17% and increasing its sales team’s productivity 15% after reinventing its sales organization using Web 2.0 technology.
• A medical device company increased its qualified lead volume by 20% and generated over $7 million in incremental revenue, while increasing its average sales price by 25%. 

To achieve these types of results the financial services industry will need a complete rethinking of current sales strategy, an assessment of sales people’s skills and the implementation of a measurable sales process, enabled by technology.  Sales people are fond of stating that generating a sale is an art.  It may be, but with the aid of technology and the proper processes it can be a measurable, predictable business function.  It will also make the process a much easier one to report to “C” level management and boards when there is a definitive process backing up the results. 

If, as those outside the financial services industry have proven, social networking and creating innovative sales practices aided by technology is effective in this economy what will be its impact when the economy turns?