Martin Banks, Personal Computer World 10/82 - checked

October 1982

'Hello.' He was tall, angular, and his mohair suit had obviously just come from its third visit to the smoothers.

'Hello.' He repeated his greeting as I sat at my desk wondering what other stunning utterance would spring forth to shatter my concentration. It would come in time; it always did.

'My name is Smith, and I was wondering if you might be interested in some office supplies. You know the type of thing. I have a lovely line in carbon paper, glossy one side, matt finish the other. I have 47 different sizes of typewriter ribbons - they're assorted makes as well, so the customer gets the maximum choice. I have little spray cans of Klenelugs, that's the stuff for cleaning telephone handsets. I have a nice line in personal business computers. Then again there is. . .'

'Hold on there, son,' said I. 'I could be interested in a computer. What type is it?'

'Well it's a. . . let me look at the brochure. . . ah, it's a Widget.'

'Is it the 48k version running on CP/M or the original 16k that used that wally operating system that no one ever produced any software for?'

Well, it seemed a fair question for me to ask. After all I'd read a bit in the magazines about how Widget Computers had completely redesigned its product range so that it could sell some.

He looked perplexed. You can always tell when a sales person is perplexed - his eyes meet in the middle. 'What's software?' he asked. I just asked what the discount was for cash.

Thus ends Scene I, Act I of a play that will almost certainly be performed up and down the country more and more in the future. It is also a precursor to this month's piece and is, for reasons of propriety if nothing else, totally unconnected with what follows. What follows is a company's stated intentions. What has already passed is pure fantasy, right?

A few months ago now, Osborne Computers in the UK, the subsidiary of the company that is scaring the financial pants off some others by refusing to roll over and die, held a press conference. At this affair, its management made a significant announcement. It was significant because of the basic idea involved and also because of the numbers being bandied around to flesh the idea out

Perhaps not surprisingly, there is some tenuous connection between the subject of the press conference and the foregoing scene. Yes, the press conference was called to talk about sales and marketing, and the way that Osborne Computers intended to set about it in this country.

To put this in perspective, there is need for just a little history. The company, the offspring of Adam Osborne, is less than a year old as a legal entity, with a product that many have defined as 'rubbish' and other long words of a deprecatory nature. The product, the Osborne 1, took run-of-the-mill technology and run-of-the-mill software, put them together in a portable box that had an apparently unusable screen, and sold it at a silly price. The company seems set to exceed $100 million sales in its first year, which is good going for rubbish.

Unlike earlier successful, and unsuccessful, machines, the Osborne was tailored for a specific market. With its built-in facilities, its attendant software and its portability, it was a natural for the professional and business market.

Having now dispensed with the history, we move back to the point of the press conference. How will Osborne in the UK move to meet the potential sales demand it expects to find - nay, not only expects but has sales projections to justify the expectation?

The company's objective, as stated at the press conference, is simple. It plans to have about 60 retail outlets around the country by the end of the year(ish). For the type of product the Osborne 1 is - a directly business-oriented machine despite its low cost - the general consensus of opinion suggests that this is a good number of outlets with which to sensibly cover the country.

To this will be added a number of OEM-oriented outfits, the type of company that buys the machine as an engine for its own unique' software products..

On top of this there will be a number of freelance sales staff, recruited to hit the major sales accounts. By this the company means the now well-understood market for multiple sales of machines into large companies. OK, so the company is looking for half a dozen such hot sales persons, maybe 10 at the most, certainly to begin with.

Well, no. It plans (or planned, for it will now be in the past tense according to the announcement) to appoint up to 200 by September (and that is the September that has just gone, not the one next year).

It was a great shame that the company felt impelled to put figures to the basic idea, for it made the idea nonsense when in fact it is completely sound. It made it nonsense because one set of figures could be compared with others, as will be seen later.

First of all, the idea. In theory it is just right. A machine like the Osborne 1 is geared specifically for the type of market filled with the managements and executives of the large companies of this world. Such large companies often have central buying policies so that the best prices can be obtained. They are also normally tough sales nuts to crack. It is an ideal area for professional sales persons that know their way round both the product and the marketplace.

But it is a market that does not need too many of them. Indeed, it is arguable that there are not that many of them to start with. It requires a special blend of skills in - sales, marketing, and the technology of hardware and software to sell micros to such people. It is also a marketplace where sales take time. Months, even years, can go by before the 'big order' comes over the hill.

Now, Osborne want to have appointed 200 by the time you read this. Yet at the same time it is saying it is predicting a UK sales volume of 1,000 units per month by the end of the year. With our calculators at the ready we can see that, on average each person will sell five units a month, which means that with around 30 percent discount they could expect to gross around £1800-£2000 a month. This is just about enough to run a single person small business with such overheads as a car and money-in-front stock purchasing. It would barely cover the cost of in-depth customer support however.

Ah, yes. Support. Now where would support come from? This according to Osborne, would come from the dealer network.

Oh dear, we had forgotten the dealers, hadn't we, and there will be around 60 of them. That means that each 'outlet' will sell under four units a month, on average, which is hardly enough to make a living. But there is a grey area here, for why should the dealers provide support for apparent rivals? The answer, according to Osborne, is that the sales people will be selling for the dealers under arrangements that they strike between them.

In essence, what this would surely mean is that the salespersons' operating margin would be less than 30 percent - probably considerably less. Each would have to sell much more to stay in business, even though Osborne's predictions for the market don't indicate it.

The net result of the idea is right - in theory. There is a big market in the large companies, and it is a market that the microcomputer industry is trying to come to terms with. Sales people out on the road is a definite starter as a solution, even if it would have been anathema as an idea just a couple of years ago.

The figures as published by Osborne at its press conference, however, do not seem to indicate the best way to go about it. The purchasers, certainly in the short term, will probably love it. It is a recipe for virtually every form of cut-throat sales tactic that the sales trade has ever invented (for `cut-throat' the potential purchaser can normally read cut-price) for the sales people will be out to grind each other into the ground to maintain some level of business.

Either that or the 'sales people' will be as outlined in Act I, Scene 1. Computers will just be something else they have on the van, along with the carbon paper, used cars, and a night on the tiles with Auntie Vera.

end