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The Mystery of Marketing.
By Dr. Rick Johnson
Sunday, 1st February 2009
 
Many companies often blur the connection between marketing and sales -

Ssome even combine the function and actually create the position Vice President of Sales & Marketing. That would be the same as appointing someone as Vice President of Finance and Operations. Unless the company is exceptionally small, no one person can maximize their effectiveness at either position.

Simply put, both functional areas are completely separate and require separate management.

Sales vs Marketing

Basically speaking the sales function is to bring in business. Marketing's function is to give sales the tools it needs to be able to bring in that business. Marketing's job is to understand the company, the competition, and the market. Additionally the current trend is to put "Vendor Management – Relationships" under the direction of marketing.

Many companies operate under the misconception that the job of marketing is to saturate the opening of the sales funnel. They accomplish this saturation utilizing advertising, brochures, branding techniques, trade shows hoping that they can generate numerous leads for the sales department to follow-up on.

In reality sales resources are limited and cannot afford to chase unqualified leads. Marketing often believes they are performing a demand creation activity. However, that is not always the case and true measurement of success in this arena is generally very limited. This creates the ability for marketing to create "urban legend" with regard to true demand creation performance. Ask any marketing manager and they will quote excellent performance statistics regarding lead generation.

If you take any marketing course in business school, the Five P's of Marketing are ingrained into you from day one. Collectively these 5 P's make up what we as marketers call the Marketing Mix. While there are some variations to the P's, they generally consist of:

  • Product ' the product or service offered to the customer
  • Price - pricing strategies with the goal of meeting a desired profit margin or costing structure
  • Place (Distribution) - distribution of the product/service to your target market
  • Promotion - communication and endorsement of your product/service to a customer
  • People - service marketing and the level of customer service you provide to your customer
Marketing is Also about Customer Retention

Unfortunately, some marketing "professionals" wouldn't know a customer even if the customer were a rattle snake and bit them in the behind. Many marketing managers simply don't have enough contact with customers. They rely on surveys, research and sales person feedback alone.

Furthermore they often lack the sales experience to understand where the opportunities really lie. Make no mistake; it is the customer that drives the entire marketing mix. The entire process starts and stops with the customer - this is the only true measure of success; anything else is just "smoke and mirrors" or "Urban Marketing Legend".

Some Key Marketing functions should include the following:
1- Market research
2- Market segmentation
3- Competitive analysis
4- Customer and market  segmentation and product attractiveness
5- Development of marketing plans
6- Pricing strategy and tactics
9- Advertizing & Promotions
10- Brand management
11- Vendor Management

Marketing managers should be the first ones to notice trends and be able to make recommendations of new products. Product development and product launch should be key strategic initiatives led by marketing. Marketing is how you define your product, promote your product, distribute your product, and to maintain a relationship with your customers. 

Marketing can also play a role in helping sales to become more effective (thereby increasing the close rates) by providing competitive data, solution-building tools, and so forth. However, those peripheral activities are only useful insofar as they match the requirements of the qualified leads — the leads that marketing should help generate. 

In real life, many sales professionals  believe that  most marketing "tools" are useless and they throw them into the trash can  because the "tools" have no relevance whatsoever to actual customers.  It's a sad truth that some marketing groups are viewed as the generators of piles of unqualified leads and piles of useless, generic marketing junk. 

If that is the case at your organization, the solution to the problem of unfocused, generic marketing activity is to compensate Marketing personnel based upon their ability to reduce the cost of sales. 

This works because:
1. Cost of sales is easily quantifiable and highly visible to top management, which can quickly take action if Marketing falls short.

2. Focusing on sales cost prevents Marketing from funding activities that neither generates qualified leads or helps Sales close those leads.
 
Unfortunately, many (not all) marketing groups are compensated based on how many brochures they print, how many ads they run, how many conferences they attend and how many presentations they give. Some take credit whenever a sale is made, regardless of how the actual sale was generated.

Marketing is often out of sync with the overall sales process or they are not "measured" in a way that ensures they add value to the sales process. Effective marketing should lead to effective sales which make it ridiculous that marketing is not held more accountable for the overall cost of sales.

Marketing may be viewed as "doing their job" if they put out enough brochures, advertising, etc. But,  the sales team is considered a failure if all this great marketing effort is not turned into increased sales. And how about booking to billing ratios from month to month; if that starts to go in the wrong direction, it may not be  a reflection of poor sales performance. It could be that the Marketing "strategy" may need to be re-visited.

Let me clarify --- Marketing is not sales. Marketing is a support function to sales but should be held accountable for supporting growth with effective, measureable marketing plans. Marketing should be responsible for product, price, promotion, and  placement(distribution). The objective is to have the right product, at the right price, at the right place, at the right time, for the right customer.

It's a little more complex than sales and as such it should be held to the standards of accountability as sales departments are at a minimum.

Rick Johnson, expert speaker, wholesale distribution's "Leadership Strategist", founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. Need a speaker for your next event, E-mail rick@ceostrategist.com

www.ceostrategist.com
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