The Difference Between Sales and Marketing
Definition of marketing versus sales:
A surprising number of sales and marketing executives could not clearly define the difference between sales and marketing semantically or in fact. The Committee on Definitions of the American Marketing Association defines marketing as "the performance of business activities directed toward and incident to, the flow of goods and services from producer to consumer or user." Historically the field of marketing encompassed the complete process including the physical activity of moving and storing goods as well as the promotional sub-divisions of merchandising and sales promotion. Today there is a tendency for the physical distribution aspects of moving and storing goods to be less associated with the traditional marketing umbrella, particularly with manufacturers of capital equipment and services. The current trend is to identify marketing as still the umbrella encompassing all sales activities as subheadings. For semantic clarification in this discussion we shall treat marketing as synonymous with sales promotional activities such as advertising, public relations and marketing services. We shall treat sales as "personal salesmanship" - making cold calls, visiting customers, quoting prices and the act of "closing the sale" and obtaining a purchase order.
The essential balance:
The balance referred to in this sub-title is the relative weight or emphasis placed on marketing/sales promotional activities as opposed to sales/personal salesmanship efforts. The great majority of capital equipment manufacturers are selling a highly engineered product, system or service. It follows in natural sequence that the roots of management will trace back to engineering backgrounds in a majority of cases. The sales/marketing tendency in the engineered product fields has been to lean toward personal salesmanship, one to one contact and "word of mouth" as the primary sales/marketing direction. Capital equipment sales and marketing people can learn much from consumer product marketing where the emphasis is obviously weighted toward a marketing/sales promotion/merchandising approach as opposed to personal salesmanship.
Marketing/sales promotion as a function, should exist, be recognized and maintained in effective balance with sales/personal salesmanship efforts in every size firm, from the one (1) man "rep." organization to Fortune 100 manufacturing corporations. The cost of a sales call in today's economy is extremely high. The use of the traditional sales call as the primary vehicle to identify and meet a prospect is a prohibitively expensive activity. Effective use of marketing/sales promotion minimizes and can eliminate the need for cold sales calls. There is a far lower cost of leads and potential quotation situations generated by marketing type functions versus "selling." The marketing efforts produce exponentially greater "leverage" than personal salesmanship. Good marketing programs can encompass sales follow-up and account maintenance procedures. These procedures minimize the need for expensive personal contacts between the infrequent need occurrences for a specific type of capital equipment. Personal visits are reserved for "hot" situations.
The goals and results:
Essentially marketing/sales promotion strives to entice the prospective customer to come to the seller. Sales/personal salesmanship strives to locate and go to the buyer. Logic and common sense tells us the former situation is preferable. A strong marketing/sales promotion program must have the overall effect of: A.) Lowering a company's "cost of sales." B.) Increasing lead and inquiry activity.
A balanced program now introduces an equally strong personal salesmanship effort to qualify the customer's need, offer the company's product in attractive fashion and close the sale. The individual players in this effort will ideally have high product knowledge and application skills. Nothing puts a customer in the comfort zone or closes the sale faster than dealing with a sales person who demonstrates a substantial depth of product knowledge combined with sincere prudence in making a good application. The net result of such an effort will invariably be a sales increase at lower cost of sales and at better margins.
Earlier in this discussion we stressed the advisability of a balanced program in all sizes of organizations. The relative scope of activity may range from the independent "sales rep.", maintaining and implementing a small monthly direct mail program, to the larger manufacturer who utilizes every form of advertising, public relations, trade shows and media support activities.
If the need for strong sales promotional effort is demonstrated and justified by our peers in consumer product marketing where every chimney represents a potential customer for a kitchen broom, the same need is even more justified in industrial capital equipment. Not every smoke stack is a qualified potential customer for an expensive powered floor-sweeping machine. Do an ongoing and thorough job of telling the whole industrial world about your unique product or capability when the need exists for your unique product, system or service, the informed potential customers will seek you out. The capital equipment manufacturer with an effective, balanced program will have maintained a high level of public awareness and made his product "easy to find" - "less costly to sell." If it costs less you sell more.
A strong promotional marketing program offers the additional benefit of giving the sales force the advantage of a degree of choice in which inquiries they pursue the hardest. Obviously the more leads or inquiries generated the greater likelihood there will exist a higher number of good matches between the prospective customer and your company's product or service. The element of choice tends to improve your percentage of closed sales and improve margins on sales made. Once again a picture emerges - lower cost of sales, higher volume and increased profit.
There are pitfalls inherent to a pronounced imbalance in either direction. In the rare cases wherein the marketing/sales promotional program is more heavily weighted than the sales capability, the problem is more apparent and thus may be diagnosed and remedied. The more common pitfall is a lack of sufficient marketing/sales promotional activity. This shortcoming is often misdiagnosed as a sales/personal salesmanship problem when the real culprit is an organization that is using expensive sales people to do a job that can be done far better and at much lower cost by the traditional marketing disciplines of advertising and public relations.
No capital equipment manufacturer can hope to realize maximum sales efficiency without a carefully planned and structured program drawing equally on the two (2) principal distribution vehicles - Sales and Marketing.
The End
Copyright 2006 - Richard H Henley
By Richard H Henley |
