Monthly Archives: September 2013

Does Marketing “Sell Dreams” and Sales Need to Make that “Dream” Happen, No Matter How Crazy the Dream?

Marketing DreamsIt’s been said to me that marketing writes the script but sales makes the movie.  Conceptually both sales and marketing should complement each another.  However, in reality both do not always meet eye to eye.  In other words, bad script…bad movie. An organization with maverick salespeople all off doing their own thing being managed four different ways will ruin even an exceptional Marketing Plan.

Looking at Marketing Through the Sales Lens

Looking at Marketing Through the Sales LensA sales rep needs to know how to position a product, set and manage customer expectations and be motivated to sell the product.  Sounds easy but does hard.

Why is this?

Most marketers, especially product managers,  understand their products inside and out. What they don’t understand is how this interacts with the sale rep’s role in getting it sold.

Sales Need to Make that Dream HappenSo, here are the “Questions You Must Answer for Sales” (in no particular order) for you to be successful as a marketer working with your sales team.  My thanks to David Shoaf for sharing these with me originally.

  1. What is the customer problem that your product is solving?  Listen up PM’s, this is not the laundry list of technical whiz-bangers you built into the product.  This is getting to the heart of the benefits (the value proposition) the product solves for the user.
  2. What are the critical qualifying questions I can use to confirm if my customer has this problem your product solves?  If I don’t know how to identify my customers buying criteria, I can’t effectively sell your product.
  3. What assumptions are you making about my customer’s business situation? What would drive the customer to adopt and use this product over any other solution that’s available to them?
  4. Who are the key competitors in this product segment? Who’s got the low price? Who’s got a unique solution? It is important to understand how you will position yourself in the market – and just as critical to understand how you will de-position the competition.
  5. What are the assumed customer buying criteria for the product? You should be able to be able to articulate the customer’s reasons to be looking at the market.
  6. Can you prove your claims? Coming to the selling situation with references, testing and other data points about the market, competitors or users adds significant credibility to me a sales person.  Kudos to many product managers for getting this one right more often than not!
  7. What drives the pricing in this segment? Which is likely to be the constraint – price, margin or inventory? What are the expected metrics: ROI, POS, etc.? Can my customer understand the pricing and ROI discussion in less than a minute?

Let’s be honest….I’m a sales person and I get measured on sales

knowing your competition better than they know themselves

So I have a few questions about how this new product will affect my metrics.

  1. What’s my plan? Are you giving me an unrealistic goal simply because you think this is a great product?
  2. What is the typical sales cycle for this product? How much time am I expected to spend selling it? Do I have exclusivity in my territory?
  3. Will this product cannibalize any products I sell now? If so, please explain to me how this is going to be handled.

The key here is alignment.  Sales & marketing executives should sign off on each other’s plan. The sales plan and the marketing plan should roll up hand and glove. Then you have accountability for performance.

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Are You Using a Zero-Based Marketing Communications Strategy?

Advertising EffectivenessDesigning hard-working marketing programs is not a simple “black and white” situation. There are numerous choices, many different methods and no single optimal combination exists.

It is, in effect, a collection of ideas, approaches and options that change continually to meet changing needs, new marketing opportunities and growing competitive challenges.

There are, however, strategies to help make marketing efforts more cost-effective. These include coordinating your marketing with your direct selling, developing a zero-base budget and establishing clear, measurable objectives for every dollar spent.

THE MARKETING BUDGETING PROBLEM

“I know that half my advertising dollars are wasted, but I don’t know which half”

quote-half-the-money-i-spend-on-advertising-is-wasted-the-trouble-is-i-don-t-know-which-half-john-wanamaker-193077

Sound familiar?

For decades, companies have tried to make their marketing dollars work harder. They have used concepts such as target marketing, niche marketing and positioning to help build sales by generating leads, reaching decision-makers and even asking for the order. But a problem remains: marketing and sales have never been completely coordinated.

The result is that money is allocated to advertising because everyone knows advertising is necessary. And sales people are told go out and sell because most B2B products and services are sold that way.

This approach has worked in the past, but the changing business climate will continue to force companies to re-evaluate the entire process. To borrow a buzz-phrase, tomorrow’s marketing will have to work − not harder − but smarter.

AN OPPORTUNITY

Consider your marketing spend in terms of its contribution to profits…instead of just cost of sales

Are You Pricing For Volume or Profit?Instead of basing the marketing communications budget on projected sales, the sales requirements can be used to establish a zero-based project approach.

In this way, the actual point when the sale is closed determines what materials and how much should be spent to make the direct selling effort as cost-effective as possible.

A DIFFERENT BUDGETING APPROACH

The first step is to establish a benchmark for both the cost-per-call and cost-per-sale

Cost Effectiveness of Direct Selling Worksheet

Using the chart, determine the total cost for your entire sales force, and then the average cost-per-call and cost-per-sale. (At this stage, do not factor out individual salespeople).

The resulting numbers are a measure of your current marketing efficiency, arid will serve as a gauge of the cost-effectiveness of your total future program.

Next, using the chart below, break out your new accounts and those you have had for at least one re-order. Depending upon market factors, you may also want to break out the accounts by region, season, or some other criterion.

What you are measuring here is the cost-effectiveness of your existing direct-selling effort, looking for the types of accounts which are most profitable and those which are least profitable.

Cost Breakdown by Account TypeAs a general rule, your marketing depends upon the profitability level of each category. Those categories where direct selling is very profitable should have programs designed to support the sales person, helping to either increase the dollar volume per account, or lower the average cost-per-sale.

Those categories where the profitability level is low should have programs designed to replace the sales person as much as possible.  This can be accomplished effectively with programs such as automated marketing to lower the cost of pre-qualification inquiry fulfillment.

Once you have determined the cost-per-sale for each category, you should establish sales objectives. The first is to maximize a sales person’s productivity, and to do that requires establishing the prime job function:

  • Developing new business leads
  • Making presentations
  • Maintaining face-to–face contact at existing accounts
  • Trouble-shooting problem accounts

Do You Have A Customer Engagement Strategy?Obviously, some or all of these functions could be present in all categories, but by assigning the sales person a prime function, you are taking the first step in determining:

  1. The type of program (support vs. replacement) that will result in a lower overall cost-per-sale
  2. The message that each component in the program should carry
  3. The amount to be spent to deliver the message(s)

Given this information, you are now in a position to correlate all your advertising, promotion and direct selling expenses to sales.

Program effectiveness can now be tracked. And you can begin to consider your marketing spend in terms of its contribution to profits…instead of just cost of sales.

Good Selling!