Fredrik Leek, Jan Johansson - Tillväxtbloggen

Sales vs. Marketing part 2

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This blog is a follow up to the previous post. If you haven’t read the previous blog please go back and read that one first.

The goal of both sales and marketing is to drive prospect into your sales funnel to eventually convert them into customers and ultimately returning customers. And with limited budgets most companies have to prioritise one function over the other. For example, If direct sales activities are low, marketing activities will have to drive sales. The opposite is also true, if direct sales activities are high, it is likely that marketing activities will take a backseat. The trick is finding the combination for your budget, product and organisation.

In our experience many organisations (new innovation companies as well as established growth companies) do not fully develop their marketing and sales strategy beyond simple budget allocations. The long-term result of these (non)actions is that these companies fail to reach their full growth potential.

Examples we have seen:

Company 1: A relatively young, digital software development company, with a very large number of potential customers. The product is relatively inexpensive, customer acquisition is sales (as apposed to marketing) focused. Sales in general are relatively slow, resulting in high cost-per-customer expenses. The risk is also that other, larger competitors enter the same market.

Revenues Take: Reevaluate their customer acquisition strategy to incorporate digital distribution of their platform. This if executed properly will heavily decrease the sales time needed in the future. However, for a small relatively unknown brand the marketing effort will need to be developed and will be substantial for this strategy shift to be successful.

 

Company 2: Complex technical consultant, high knowledge with limited total customer base. The offering is high value projects with specific expertise and limited competition. Their customer acquisition strategy is historically relationship based. To fuel growth the company together with a communication bureau developed a marketing plan based on target customer persona profile.

Revenues Take: Perhaps in this situation a more effective and cost efficient approach would have been to take that marketing budget and instead focus that time and money on person-to-person direct sales meetings.

 

Company 3: Industrial company focusing on government / public procurement (offentlig upphandling). A best in class product but no active sales or marketing activities. To grow, the company wants to pursue industrial companies with the same product offering.

Revenues Take: In this particular situation the company has to invest in both sales and marketing capabilities and activities. Before they can start either function they need to determine their new business model starting with comprehensive market analysis. Long term, sales will be the key activity supported by smart marketing efforts directed to key decision makers and influencers.

 

At the end of the day each company must find which mix works best for their particular situation. We recommend reviewing strategies and KPI’s at least every 6 months, as market conditions change rapidly.

Sources, for further reading:

App Data Room. (2014). MARKETING VS SALES: THE BATTLE FOR CUSTOMERS – INFOGRAPHIC. Available at: http://appdataroom.com/marketing-vs-sales-revenue-battle-infographic-2/ [Accessed 08/02/2017]

Greener, M. (2016). MARKETING VS SALES: THE BATTLE FOR CUSTOMERS – INFOGRAPHIC. App Data Room. Available at: http://appdataroom.com/marketing-vs-sales-revenue-battle-infographic-2/ [Accessed 30/01/2017]

Leslie, M. (2016). Leslie’s Compass: A Framework For Go-To-Market Strategy. First Round Review. Available at: http://firstround.com/review/leslies-compass-a-framework-for-go-to-market-strategy/ [Accessed 30/01/2017]

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