I talked with a businessman a couple of weeks ago who was riding a unicycle.
The business owner didn’t understand the need for marketing. “We have a sales force. We don’t need to market,” was the particular statement that is still ringing in my ears. He runs a locally-focused printing operation that is struggling to come up with new customers. Like many in the printing industry, he’s seen volumes decrease in the past few years as products that were once mainstays have vanished and content has gone online. His average revenue per customer has declined, so the logical answer is to get more customers. The owner’s conclusion (and his instructions to his sales team): “Sell harder.”
There’s more to the story. In the course of the conversation, it became obvious that the owner really doesn’t differentiate between selling and marketing. In his mind, sales is marketing and vice versa. That certainly makes things difficult for a marketing consultant like me, who depends on small businesses that want to improve their marketing programs. It’s also a big problem for the business owner, one that he doesn’t realize he has. The owner is entering the bike race on a unicycle. It’s a one wheeled contraption and no matter how hard he peddles, he just isn’t going to move very fast. He’s at a competitive disadvantage.
Is a Puzzlement
What about you? Are you puzzled about the difference between sales and marketing? Do you understand why both functions are needed to keep a business growing?
There are times I almost think
I am not sure of what I absolutely know
Very often find confusion
In conclusion, I concluded long ago
Rodgers and Hammerstein, The King and I
Where’s the confusion? The need for both sales and marketing should be understood by most business people. Nonetheless, many small business owners seem to be puzzled into inaction. Here are some statistics from a 2013 survey conducted by Yodle, the online marketing firm:
- 42% of small business owners say they worry about finding new customers
- 52% of small businesses don’t have a website. 90% don’t have a mobile-optimized website.
- 92% spend less than $1000 each month on marketing.
- 78% depend on word-of-mouth as the primary marketing channel.
- Only 13% use email marketing. 11% use social media.
- 56% do not measure marketing results.
So What’s the Problem?
For small business, it starts with the definition. Here’s another example:
I clipped this job description from Careerbuilder a couple of months ago. It’s a great example that shows how small business owners are confused about exactly what sales and marketing do. For those of you with bifocal malfunctions, here’s the text of the job post:
It seems evident to this marketer that the advertisement above is for a sales position. Good communications skills are a logical requirement for sales or marketing, but why would a marketing person be paid on commission or need a company car? I’m not at all sure what the requirement for “community vastness” means, but perhaps they’re looking for an individual with girth. Hopefully, the company car is an 80’s vintage Cadillac DeVille and not a Ford Fiesta.
Definitions that Overlap
Here are two very simple definitions for sales and marketing:
- Marketing is one-to-many.
- Sales is one-to-one.
Both definitions are people focused. They describe the disciplines in terms of relationships. Marketing can be very effective at the beginning of the process of developing relationships. In a very broad sense, marketing’s job is to influence with what groups of people think and know about the company, its products, its services, and its character. Despite the difficulties small companies have establishing their brand, marketing is required to establish awareness, even for small businesses in local markets.
In bygone days, market presence could be established with a good selling effort. Today, most potential customers prefer to research online first before they make contact. An unannounced call or visit from a salesperson is more likely to be considered an interruption than to be welcomed. In today’s marketing and selling environment, businesses have to be “findable.” It’s Marketing’s mission to make sure that information about the business can be found and that it is conveyed in a way that establishes trust, inspires interest, and provokes some to respond. Increasingly, marketing is responsible for generating leads.
Sure, there is overlap, and salespeople can and should generate and develop leads, but cold calling just isn’t the most productive use of their time. Sales is far more efficient when they are provided with warm leads to develop into accounts. The sales objective can then move away from “prospecting” to developing business with potential customers. Instead of selling harder, they can sell smarter. Marketing starts the process of developing relationships. Sales cements them. Both sales and marketing can help perpetuate them. Let’s clarify what sales and marketing can do in a small business:
Here’s what Marketing can do:
- Provide findable information: products, services, and the company story
- Engage audiences and build brand awareness
- Execute traditional advertising and promotion
- Generate warm leads
- Gather information
- Reinforce customer relationships
Here’s what Sales can do:
- Generate and develop leads
- Analyze customer needs
- Customize products and services to meet specific needs
- Close transactions
- Gather information
- Build and maintain customer relationships
These are not exhaustive lists and there are and should be overlaps, especially in small businesses where sales and marketing can be closely aligned. In small businesses, it’s easy for salespeople to be attuned to the company’s message and for marketers to come into direct contact with customers. Both sales and marketing take active roles in maintaining customer relationships. These kinds of overlaps should be encouraged. They give small businesses an edge over larger competitors that struggle with “silo problems.” Sales should have input into the marketing process and marketing can help craft the sales message.
Here’s What Works
Sales and Marketing are the two wheels of the racing bike. They’re different disciplines, but they work together. Both are required for small businesses to grow and succeed.
DP Marketing Services would be glad to help you get started. If your business is struggling to add customers and sales revenue and you don’t have a marketing plan in place, now is the time to start. Let’s talk. The first ideas are free. Contact Richard and we’ll schedule a conversation.
Copiers Are Commodities
When I walked into the front door of my old customers’ business, he was happy to see me. We caught up for a bit. His business had recovered from the recession and was expanding again. He has always been an optimist and was excited about the potential to grow again. After a few minutes conversation, we changed gears. “So what have you been doing since the printing business sold?” he asked.
I explained that I had freelanced for a bit with a small marketing company, but that I had recently taken a new job as sales manager for a local copier distributor. I presented him with my glossy new business card. “Hmmph, never heard of this company,” was the response. “Don’t need a copier. Are you still doing marketing? We need some website work.” It was a sign of things to come.
This post is a bit difficult to write. I’ve just returned from a four month career detour. After working in my one-man global marketing enterprise for a little over a year, what looked like opportunity called. A position as sales manager opened with a familiar Middle Georgia business. I have enjoyed sales in past endeavors and the job looked promising. I took it. I shouldn’t have.
To be clear, the job wasn’t a fit. The four month stint was more a bad trip than an excursion. Selling copiers requires hard-charging salespeople who know and will employ the tactics needed to close quickly. To paraphrase the small company’s owner, copier salespeople need to be hunters, not farmers. I am a farmer who likes the occasional hunt. Ultimately, I think that the sale should produce positives for both the customer and the supplier. My past successes had to do with strong, mutually beneficial relationships, not sales tactics.
To be fair, I also don’t think that the difficulties I experienced had as much to do with the small business that employed me as with the industry as a whole. Copiers, or multi-function-printers (MFPs) in industry jargon, shouldn’t be commodities. They are commodities because the industry sells them that way. It’s a trap that looms for printing companies and small businesses and it’s worth writing about.
What Makes a Commodity?
Early in my career I had the good fortune to work for an excellent company that sold lumber. There is no doubt that lumber is sold as a commodity. It is very difficult to differentiate #2 grade 2 x 4s from one manufacturer to the next, and price is inevitably a major component of the sale. My company didn’t see it that way, though. Long before the advent of inbound marketing strategies, we positioned our company and assisted our customers’ companies by providing information that helped them to differentiate. We sold treated lumber, but marketed decks and projects. We talked with contractors and DIYers. We even provided seed money to start the nation’s first deck building franchise, Archadeck, a company that still leads in the outdoor construction market. We sold commodities, but the company acted as a “thought leader” long before that phrase was coined.
Copiers, printers, and document technology provide measurable value to almost every business in existence. Because the applications of the machinery and software are highly customizable to the particular needs and systems of each customer, it would be logical to conclude that this equipment and the accompanying software would be anything but a commodity. But that isn’t the way the industry has developed. My knowledge is limited by a very brief tenure in the industry, but I have the strong impression that the copier industry has shot itself in the foot.
Transactional Sales and No Marketing
Even though the manufacturers provide a substantial amount of information about systems and applications that can truly help businesses to operate more efficiently, the mechanism for conveying the information is missing. In the printing business, we frequently thought that we knew more about the applications for our digital presses than the salespeople did. They knew the acronyms, but weren’t always clear about how the capabilities could fit our business model. That was the job of the specialists in the manufacturer’s organizations, and we didn’t see them much.
This problem is even more pronounced at the dealer or distributor level. At the small company that I worked for, the emphasis was entirely on sales transactions. When the salespeople thought about marketing, they really meant sales support, and there was little of that beyond an occasional product flyer or bullet points in a proposal.
Gaining new business is also seen as a sales function, and the sales cycle really doesn’t provide an opportunity to convey value beyond price. The typical sales approach is to convey the message that the customer can save money with a new machine. The focus is on the transaction, with little emphasis on utility or capabilities, accommodating the customer’s inclination to equate one “box” that produces 35 pages per minute with any other “box” that operates at the same speed.
The whole process is based around lease renewals. If you are an established salesperson and have a base of business, your income is generated by making sure that old machines are replaced with new ones before the lease runs out. If you have no base, you must rely on cold calls to identify potential lease end opportunities, and hope for the slight chance to dislodge an embedded competitor by being at the right place at the right time with a lower price. Cold calls are not a great way to convey detailed information and the “upgrade” conversations at lease renewal time quickly become price-oriented, especially if there will be a competitive bid.
This focus on the transaction provides no opportunity to differentiate products or the companies that sell them. Lacking any differentiating information to inform their decisions, customers choose on price. While there may be exceptions, most copier dealers reinforce this tendency through tactics that appear to produce a low price – as an example, extending the lease terms to fit the monthly cost into the customer’s operating budget.
Further, this transactional focus of the industry has conditioned customers to only consider the product when a lease is near expiration or a machine has broken. The CFO of a small college told me bluntly that “every copier salesman claims to be able to save us money.” He didn’t want to be rude and would meet “for a moment,” but he really couldn’t afford the time for a conversation. The machines at his college would be put up for bid when the existing leases expired.
Einstein’s Definition – Escaping the Commodity Sales Trap
Albert Einstein defined insanity as “doing the same thing over and over again and expecting different results.” The commodity sales process is self-perpetuating and the results are problematic. While it’s possible to maintain existing business, prices and margins erode over time. It’s difficult to add new customers in a saturated (and perhaps, declining) market. In Middle Georgia, the best this transactional approach could do was to re-divide a shrinking pie at lower margins, not a sane objective by any measure.
To be clear, this short-sighted transactional sales approach is conventional wisdom in the copier industry and in many others. It’s the major topic of discussion in the leading industry blog, Print4Pay Hotel, and it defined the language in the small business where I worked. In the printing industry, every job is custom, yet many job printers still count on competitive bids for much of their revenue. Small businesses are at a competitive disadvantage to the Wal Marts and Amazons of the world. Commodity competition is a self-defeating business model.
The best way out is to break the mold of conventional wisdom. Every product and service that is sold and every business that sells them has attributes that are valuable. Marketing, at it’s essence, is how those values are communicated. Even when the market has defined a product as a commodity, there are still opportunities to educate, to inform, and to convey knowledge that builds trust and benefits the customer.
My short career excursion has confirmed the conviction that commodity sales strategies for small businesses don’t work. The good news is that opportunities to communicate with prospective and existing customers abound. A solid, well-planned, and consistently implemented marketing program is a necessity for any small business that hopes to grow their revenues and profits.
This post signals a return to the main road and my little consulting enterprise, DP Marketing Services. The detour was a bumpy path, and I’m glad to resume a career highway that’s a more comfortable drive, even if the gas tank is a little low after the side trip. Over the next couple of posts, I’ll be writing more about lessons learned, continuing next time with the startling revelation that sales and marketing should be aligned to create ongoing customer relationships. I hope you’ll join me on the journey and please get in touch if you have a comment or story to share or if you’d like to discuss ways that a marketing program can help your business break the commodity mold.
I got curious. I was reading through the LinkedIn Groups and came across the obligatory weekly “Print Is Not Dead” post. I wondered how many of these articles had actually been written, so I Googled it. Here’s what I found out:
Print is Not Dead – About 216,000,000 entries (in .42 seconds, wow!)
Print is Still Relevant – About 140,000,000 results (0.29 seconds)
The Value of Print – About 1,020,000,000 results (0.43 seconds)
Enough, Please. The Point Is Made.
This may be the shortest blog post I’ve ever written. Two points:
- There’s no real need for printers to continue justifying our industry. The recession has been over for years. We’re not going back to the “good old days,” but the future doesn’t really look so bad for those of us with energy and a little imagination.
- There’s no need to continue making the same arguments. Look at the brand names inside your mailbox – pretty good proof that some influential companies think that print is still relevant.
Where Monty Python Comes In
What happens to the poor old man? To end his protestations of “I’m not dead yet!,” Eric Idle whacks him over the head!.
I’m afraid that at this point the hundreds of millions of articles that try to convince the public that print isn’t dead may be doing more damage than good. They may be convincing people that we really are dead and only think we’re alive. Let’s move on. There’s plenty of living opportunity to talk about. I’m casting the first vote for a moratorium on further “Print Is Not Dead” articles. Anybody else in?