sales and marketing strategy
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|Ironically, once the Founder is stretched beyond breaking and decides to bring on a Sales Person, the thing that previously was too important to delegate is now dispatched to the new VP, Sales and Marketing. The Founder congratulates himself on this major step forward: “Now I can focus on the Product and know that Sales/Marketing is happening…whatever that means. The VP tells me everything is on track, we’ve got good Traction in the marketplace, the pipeline is filling up, and two new contracts will be signed next week. Sales and Marketing—Check! It’s good to be King!”
“How’s that new Marketing, I mean, Sales guy doing? (My new Sales guy tells me we need a Marketing guy, so he wasn’t as qualified as I thought.) It’s been 3 months and no new Sales? Sure, I understand, it takes a while to understand the Product. Training, yeah, I get it. Our products are very sophisticated.”
… [ 3 months later] “Still no new Sales? I guess that’s understandable, these Sales Cycles do take time. But the pipeline is better than ever! Great!”
… [3 more months later] “Whatever happened to those two contracts that were going to sign 6 months ago? Yes, please do get back with me with the details. I read in the trade magazine that our competitor signed a big contract last month? Were we in the running? Oh, inside job? That’s tough.”
… [more time passes] “If the new VP of Sales doesn’t sell something soon, he’s going to leave unless we extend his commission advance. Then we’ll have to start all over! “
I’m about done with that Sales Guy! The only sales we’ve had since he came are the ones that I closed! And he expects me to pay him a commission for those! Fire him!”
… [3 months later] “Wrongful Termination? He’s got an attorney?”
Channel Partner Relationship Management. If it sounds complicated, it’s because it is. You might think it is a game for big companies, run by a Senior VP, somebody who has a lot of experience with that sort of thing. However it is exactly when you are a fledgling company that the channel partners are so appealing to you. You haven’t yet built out your own Sales staff, you haven’t gotten in front of enough people to really get your messaging down. A guy comes along, “I like what you’re doing here. I think I can sell this.” You go back and tell your team “I have found the solution to our Sales! I have the guy who’s going to make us all rich!”
If a Channel Partner looks really good to you, there’s a good chance it is probably because they have a Sales staff and you don’t. They have client relationships and you don’t. They’re most likely bigger than you. They think you should be satisfied with being along for the ride. If it will be a good relationship it’s because they actually need your product to sell theirs. You have managed to have a product that they cannot easily reproduce. That is going to bother them forever. And when you don’t do what they say (because it is your product after all) they are going to get angry with you. Here you are, helping them sell their product, a product that is clearly missing key functionality that the client needs. And they’re mad at you, primarily because you exist!
The Channel Partner’s Sales staff don’t really understand what your product does. You find out they’re saying that your product does things that it doesn’t and that it doesn’t do things that it does! When you ask “Why didn’t you sell this option to the last customer?”, your contact replies, “I didn’t know you had that! Why didn’t you train my salesmen properly!” He’s right, you should have. In fact, you would have provided training if the Channel Partner had allowed you time at his last national sales meeting, but the agenda was already full with their products.
Pretty soon you have three or four Channel Partners out there, all rattling around, talking to the same accounts. A highly motivated Client Prospect calls to you to ask, “Which of these Sales people represents you?” You don’t know. You’re just excited that he cares! You manage to work through the confusion by engaging the Buyer directly. He buys!! (You decide on whose “paper” it gets contracted, whether it’s yours or one of your Channel Partners’, more on that later.) Now three Channel Partners say “You owe me a commission.” If your commissions are typically 20% for the first year revenue, 60% (!) of your top line is going to pay off your channel partners. Probably none of them really closed the deal. You had to sort it out at the end and close it yourself. You lose money, nobody’s happy and you had to do most of the selling work anyway.
Bottom line: Channel Partners don’t save you any time or effort. All the hard work of figuring out what happens in your product’s Sales Cycle, what it takes to buy it, what Buyers need to know, and when they need to know it, all comes down to you if your product is ever going to get sold. You might have an excellent Channel Partner who is perfectly complementary and non-overlapping with your product and has an excellent sales force. Even then, you still have to do all your own work. The Partner is just funding the Salesmen, not you. It is their investment in the Sales organization that you have the opportunity to leverage. But proceed with caution. You don’t control those people. Sales people follow their compensation plan rather than what their manager tells them to do. With the stroke of a pen, the Partner can change their compensation structure and now your product is not getting sold. They have focused on something else. You don’t control them.
Technically oriented companies frequently use the terms “Sales” and “Marketing” interchangeably. In fact, they are closely related because the purpose of both is to generate revenue, although through different but interrelated roles. By understanding the purpose of each function and their differences, productivity and related revenue increases will be obtained.
Sales is where the rubber meets the road – the up close and personal process of getting the business; convincing prospective customers to sign on the dotted line. Sales is Marketing’s direct channel of distribution for the products. Sales is defined by Michael T. Bosworth in Solution Selling as: “Helping people buy – facilitating the buying process”.
Typical Sales Tasks Include:
Marketing’s goal is to define the products, who needs them, how to get the word to those who need them, and at what price.Typical Marketing Tasks Include:
Four P’s of Marketing Marketing is frequently defined by the “Four P’s of Marketing” as explained in E. Jerome McCarthy’s, Basic Marketing, A Managerial Approach:
Sales and Marketing Organizations are Related, but Different
Marketing’s job is to get the word out to the many target customers while Sales’ job is to work one-on-one to close business, to obtain signed contracts. Sales accomplishes this goal by identifying each prospective customer’s pain, needs, and/or goals and then communicating the vision of how their product or service solves the prospective customer’s pain, needs, and/or goals better than other alternatives.
Both Sales and Marketing evolve their processes as technology changes. The Internet has opened opportunities for change to both functions. For example, through Marketing Websites, companies can deliver their story anywhere in the world to anyone with access to the Internet. Buyers then have more resources available to them. As a result, they are able to conduct research on their own in a more efficient manner. Armed with additional knowledge, Buyers now can move further along in the buying process before bringing in sales people. Therefore, it is now more important than ever for companies to have websites that meet prospective customers where ever they are in the buying process. The goal is to not only provide critical information, but to be a compelling resource whose product is worthy of further consideration.
Social media marketing has also opened up direct access to customers as well as prospective customers. As prospective customers hear from actual customers, the marketing process is enhanced.
New sales processes are also available via the Internet. Think of the impact that Amazon.com and ebay.com have had on retail sales. Retailers now have the option of providing an online storefront as an alternate channel of distribution. However, for the larger, consultative sales, sales people are still required for the one-on-one sales process. Prospects still need to recognize their pain, needs, and/or goals so they will be able to visualize the best solution for them. Although the Internet has had an impact on the buying process, the actual steps a buyer goes through remain the same. (Link to: Sales Cycle vs. Buying Cycle)
Sales people who are savvy and recognize how the Internet influences buying cycles will be much more productive. With awareness and the ability to spot the status of the buyer in their buying cycle, sales people will be more efficient, close business faster, and produce more revenue for your company.
It is important to understand the differences in the two functions in order to hire talented, experienced people to fill these different roles. It is true that there are some maverick sales people who can do both jobs effectively, but most individuals are better suited for only one of the functions. Just because someone has the ability to create a compelling marketing scenario about a product, does not mean they will be able to hold up from repeated rejection from prospective customers. Likewise, a salesperson who handles rejection well, might not have the creative ability to produce a winning marketing program.
Where should these functions reside within an organization? Should Sales report to Marketing or should Marketing report to Sales? Or, should they be organized at the same level reporting to a common vice president? Or, should they be combined into one origination?
In a new organization, both the Sales and Marketing functions may be accomplished by the same person or group of people. Eventually, the time and effort to keep the promotional materials up to date with an evolving product will take time away from selling activities and sales activities will take time away from marketing activities. Eventually, personnel with specialized experience will need to be added in order to meet both Sales and Marketing goals.
Organizations can be successful regardless of whether Sales reports to Marketing, or if Marketing reports to Sales, or if the Sales organization and the Marketing organization both report to a VP of Sales & Marketing. What is important is that both functions focus on the prospective customers and keep the message up to date with their needs and with the product’s evolution.
The two organizations may not always “get along”. As sales people make calls on prospects and observe their reaction to the marketing materials, there is a tendency for sales people to make local modifications to fit their style, and in their view, improve the message. Marketing personnel will complain that the sales people are not accurately portraying the product by modifying the message. What needs to happen is for both groups to listen to existing and prospective customers’ reaction and feedback and work together to make sure the message and materials are up to date and delivers the best vision of how the product meets their needs better than other alternatives.