Customer Service Blog
What is the huge difference between sales and marketing
Posted by Jim Scott on 23rd August 2015
Anyone who has ever been on one of my training courses or worked with me on a marketing project, will know just how much emphasis I place on the answer to this question, what is the huge difference between sales and marketing.
For the sake of brevity, Marketing is a planning process and sales is an action process. Marketing is all about deciding what you are selling, who you are going to sell it to, what sales channels you are going to use and how much you are going to charge – it is also about a lot of other things but these are the essentials.
Effective selling – that is, cost effective selling – can only take place when you have answered all of the planning questions. It is exactly the same as the (rather overworked) example of booking a flight to your holiday destination which can’t be done until you have decided where you are going, where you are going from, what class of ticket you want and how long you will be there.
Selling without planning becomes very , very expensive. When you have developed your marketing plan you will have a clear idea of who and where your customers are and how to reach them. This means that you may not have to use National TV to reach them. If you know who they are and where they are, you are in control of the least cost route to reaching them.
Far too many years ago, I took over the running of a National sales force of 34 field sales representatives in a company that did not have a marketing department and no marketing direction.
That is 34 well paid people. 34 fully financed company cars and 34 expense accounts.
All of them were cold calling anywhere they though best within their territories and most were slightly successful at selling the lowest priced products.
It took a while but after defining the target market groups for each product and re-defining the channels for each product, a telemarketing team was created and the number of field based reps reduced. The net effect was 35% increase in sales value and a 20% reduction in the cost of the sales team. Along the way management controls were put in and monitored to help each salesperson to make the most of each opportunity.
Why then, would a company go out and recruit a field based sales person without a marketing plan?
Why would they recruit a sales person without having any sales management experience or sales management controls?
The same question applies to those who place advertisements or spend money on any kind of marketing communication without placing that activity in the context of a well worked out marketing plan.
Somehow though, recruiting people without a framework for them to work within, seems a lot more expensive – and can mess up their lives for a bit.
What a difference a business model makes…..
This week a good friend of mine has sadly had to put his business into receivership. He worked hard over many years to create a business in which his employees felt valued and secure and his suppliers were paid on time.
This strategy held good for a number of years. He had a marketing plan but it was rarely implemented as work kept coming in until one day it didn’t.
He reacted a bit by reducing staff a bit and holding off payments to suppliers a bit. The office, the office staff, the vans, the technicians all added up to a burden each month that just could not be covered by the reduced income.
He has learnt a lesson. It is never too late and I am sure he will pick himself up and start again with a different business model this time.
Talking about different business models. This week I visited a company in North Yorkshire in the same line of business as my friend but operating on a completely different business model. He hardly had any overheads at all. In his last full financial year he made a profit of £200k on a turnover of £800k. He employed two part time administrators – more or less according to the needs of the business. All his technicians are sub contractors. They all have their own vans. He is as loyal to them as he can be and many of them have been with him for over fifteen years. His customers buy the supplies and parts directly from the wholesalers so he has no materials bills.
He concentrates on marketing – that is keeping the business they have and developing more, whilst his business partner concentrates on field supervision and quality control.
What a difference.