Marketing Plans and Sales Executes

Marketing plans and sales executes.

Okay, so it’s not quite that cut-and-dry, but in considering the roles of the two organizations, we find some key distinctions.

Marketing - Step 1

Marketing sets the “tone” in the market before sales engages with individual prospects. Marketing identifies the “best prospects” based on market size, competitive environment, and product or service capabilities. Marketing establishes the overall value proposition – “our products solve this problem”, the positioning, pricing, etc. Marketing creates the sales assets used in developing individual opportunities.

Selling - Step 2

Sales follows through to establish the relevancy of the offering for individual prospects and converts prospects into customers.

I’m simplifying a bit…

In this model, step 1 naturally precedes step 2. You sand before you paint. You scramble the eggs before you cook. You date before you marry. Step 1 is necessary for the success of step 2.

A change in step 2 requires changes in step 1. Cooking paella requires different preparation than that for cooking an omelet.  To transform sales, you must create a new set of preparations in step 1 (marketing).

Results are what matter

We don’t actually care about sales transformation; instead we care about the results of sales transformation. In this conversation, we don’t even care much about the short term results of sales, what we’re focusing on is building a more robust, healthy business, a qualitatively better set of results.

Selling is a means to this end -- the creation of profitable, long-lasting relationships between buyers and sellers. These profitable, long-lasting relationships generate the highest shareholder value.  And what shareholders really care about is shareholder value (not this quarter’s sales).

Unfortunately, our current set of preparations (in marketing) doesn’t usually lead to that end. If measured using the Six Sigma scale, selling is at best a one sigma activity. Buyers complain that less than a third of their sales people show up “very prepared” for sales calls. Buyers cite a poor relationship with their vendor as a primary reason for switching vendors. More than 50% of all reps failed to make quota last year. (Source IDC 2010)

Vendors are failing miserably to meet the relatively low expectations of their buyers. In talking with senior executives at Global Fortune 500 companies, I repeatedly hear stories of sales people driving to a deal rather than building relationships. One executive at a global financial services firm described a storage rep who, despite being invited to coordinate a brainstorming session, essentially showed up with an order pad and an expectation of booking something that day. The damage to the relationship by his actions can be measured in the millions of dollars of lost revenue.

Most vendors mean well. They want their sales people to do the right thing. They hope that their sales people are doing the right thing. They need their sales people to be doing the right thing. But wanting and hoping and needing don’t constitute a strategy.

To create more productive, profitable relationships between buyers and sellers that actually drive shareholder value for both sides, both parties must commit to change. Both parties must invest in the relationship. If vendors do not make this investment, buyers will treat them as commoditized suppliers rather than value-adding partners.

Where to start?

A good place to start is to evaluate the needs of your best customers. What value do you provide these customers? What other organizations have similar needs? How should your engagement process change to enable more value creation and transfer? What else must change within your organization to ensure consistency?

If you undertake sales transformation with the goal of improving relationships with your customers and actually make the changes necessary to ensure this transformation, you will be rewarded with higher share of wallet, longer, more profitable relationships with your customers, higher revenues and profits, and increased employee satisfaction.

Seems like a no-brainer to me!

Thanks,

Lee

Sales Transformation Starts in Marketing

Five years ago, I launched a consulting practice at IDC with the express goal of “fixing how the technology industry sells.” We made a lot of progress over the years, developing a formal sales productivity framework that provided a context for the conversation, identifying specific improvements for selling and related processes and changed team roles. Many of the practice clients have made substantive improvements in their sales productivity.

Today, however, most organizations remain stuck in their old paradigm – “let’s get what we can from our customers now”, or “we’ll get to transformation later, right now we have to keep the lights on.”

And I know why.

For most, what they’ve been doing is “good enough.” It has kept the lights on, engineering fed, sales people paid, investors or shareholders happy. Few technology organizations want to believe that their approach to selling is broken, that it’s damaging to long-term (and sometimes short-term) relationships, that the adversarial relationship that they create with prospects and customers is simply unhealthy for both organizations.

But “good enough” is crap.

It’s "short-term, this quarter" thinking, it serves nobody, and it robs the company of the opportunity to build real profitability and shareholder value into the relationship for everyone.

My ongoing research supports this perspective. Buyers willingly switch suppliers at the drop of a hat because they see no real engagement or commitment on the part of their suppliers. Buyers report that sales people continue to show up unprepared for the conversation with their key prospects. They do this not because they’re lazy or stupid (far from it!), but because it’s accepted by their own company. Sellers simply don't invest in the processes and resources to create the possibility of a powerful, productive, profitable relationship.

Sure, buyers have some culpability here too, but that’s a different conversation, one that led me to create the concept of a “Buyer-Seller API” a few years ago. For now, let’s focus on the sellers. While the buyers may have the upper hand with regard to the availability of information, it is the sellers that have the goods. And buyers need these goods to improve their productivity or competitiveness or customer service.

So let’s consider the possibility of creating powerful, productive, profitable buyer-seller relationships. Sure sounds better than fixing something that’s broken.

What do powerful, productive, profitable buyer-seller relationships look like?

We’ve all experienced great transactions…when I asked this question during my keynote at an executive lunch seminar in the fall, most of the audience indicated that they had recently experienced positive, productive transactions as buyers.

But transactions aren’t relationships…transactions can lead to relationships, or conversely, relationships can lead to transactions. For example, last summer Diane, a senior IBM executive, was clear with me – she had neither budget nor need for my services. What she was looking for was information, a conversation with a similarly minded person that might help her to do her job better.

Most transaction-oriented sales people would simply have moved on; I engaged in the conversation she needed to have and started to build a relationship of trust with her. Several months later I received a call from another senior executive, a referral from Diane that led to the first formal agreement between IBM and my company. And through that transaction, I'm starting to build a relationship with the person Diane referred to me.

How do we create powerful, productive, profitable buyer-seller relationships?

I’ll sign off with this teaser – it begins in marketing. Not in sales, where the dysfunction is so visible, but in marketing, which is tasked to provide both the Voice of the Customer and the overall direction for the company. Nowhere else do the market inputs and outputs meet so concisely; as a result, it’s up to marketing (with the necessary blessing and support of the executive team...and the active participation of sales) to drive sales transformation.

My next post will explore this question…stay tuned.

Thanks,

Lee