Does your business have a Sales and Marketing department?
Do you call your sales force ‘Marketing Representatives’?
Do you have a sales office or a marketing suite?
When you employ marketing staff or consultants, do you measure their performance on the basis of sales KPIs?
I have found many businesses which can answer all these questions in the affirmative and that is puzzling. These businesses clearly have a confused definition of two separate but linked specialisms.
Worse, the description Sales and Marketing is worrying as it gives prominence to the activity of personal selling over the strategic role of marketing professionals.
Sales is the activity of personal selling usually based on the employment of a cohort of sales representatives and involves direct face to face communication between the seller and the buyer. It is a promotional activity based on two-way communication. Sales presentations are also often designed to meet the needs of individual customers based on specific buyer demands and taking into account knowledge of the buyers status and issues.
Personal selling is often an expensive communication channel. You have to pay for expenses such as cars, travel expenses and a sales office. The total bill for a sales representative can be double their salary. The practice of the traditional sales representative model is also changing through the increasing use by organisations of centralised purchasing teams.
Sales representatives are increasingly having to learn new skills. Often the focus is now on the retention of profitable customers whilst the zombie customers that represent costs are abandoned. Sales reps are now Customer Service Representatives, where the focus is on long-term customer retention as opposed to short-term one-off transactions. Salesmen are now also expected to provide knowledge and database management providing market research data and administration. Their role is to promote products and develop solutions; not just to sell. Representatives are now problem solvers who develop partnerships with their clients. They satisfy needs and add value.
The stereotypical image of the salesman as a slick, fast-talking charmer is gradually disappearing to be replaced with that of the thoughtful, knowledgeable professional.
However, personal selling is not a stand alone business activity. It sits as one part of a wider marketing mix. It is only one element of a comprehensive marketing strategy.
Modern sales practice depends on:
- Target market choice: the targeting of profitable accounts. This requires a wider of your targets through market segmentation and key account identification. These wider strategic marketing functions provide for effective sales force management.
- The creation of differential advantage: The start of successful marketing strategy. This strategy needs to be embedded in the sales plan and be effectively communicated to all staff involved in the sales process. The sales force must be able to articulate the differential advantage to customers.
One danger is that your sales representatives dilute your differential advantage by caving in to customer demands for price concessions. it is also important that product benefits are communicated in terms that are understandable to the customer.
So sales activity relies on the strategic objectives of your marketing plan.
There are four generic marketing strategies depending on your market position. These reflect the four quadrants of the Boston Consulting Group Growth/Share matrix:
- Build your market: grow market share and sales volumes; increase your levels of distribution and increase your service levels. prospect the market for new accounts
- Hold your market position: maintain your market share, sales volumes and service levels. Limit prospecting
- Harvest the market: Increase earnings by reducing costs and targeting the most profitable customers. Reduce the cost of service. Reduce market prospecting. Transfer less profitable accounts to telemarketing.
- Divest: Limit sales visits to the most profitable accounts and increase order levels to minimise stock levels. No market prospecting.
Each of these marketing positions requires a different sales strategy:
- Build: Requires high call rates to existing accounts. Highly focused sales activity during calls. Increased prospecting for new customers.
- Hold: Maintain current call levels. Moderate focus during calls. Call on new customers as they appear.
- Harvest: Call on profitable accounts. Move others to email contact and telemarketing. Don’t prospect for new customers.
- Divest: Apply quantity discounts to hive volume accounts.
Perhaps the term Sales and Marketing should be reversed to recognise the strategic role of marketing. it is your marketing strategy that determines the activity of your sales force. Your sales force should not determine your marketing and corporate strategy. This would be a better representation of the relationship between marketing and sales.
Even better, your marketing function should be allied to your wider corporate planning rather than being located as a silo function of your sales team. Strategic marketing planning should be a central part of your organisations top-level business planning.