There is no greater impediment to the advancement of knowledge than the ambiguity of words. Thomas Reid
Photo credit: Gerard Stolk (vers Noel)
The trouble with most of us who speak in the English language is that we assume that people actually understand what we are saying. This last semester, as I set out to teach a course on International Marketing, I happened to ask the class casually, “How many of you understand the difference between marketing & sales?” The faces, more than the raised hands, clearly communicated the confusion over the two. So as I set out to clarify the difference, I learned a thing or two and reckoned I’ll share that with you.
Let’s get the basics out of the way. And in the interest of not reinventing the wheel, I’ll share what I reckoned was a good definition from Diffen.com.As they summarize it
Marketing The goal is to generate awareness and interest in the product/service and create leads or prospects, by influencing the perception and behavior of the target customer group.
Selling is focused on converting prospects to actual paying customers. Sales involve directly interacting with the prospects to persuade them to purchase the product.
This means the activities done by marketing and sales can be quite distinct
consumer research to identify the needs of the customers
product development – designing innovative products to meet existing or latent needs
advertisingand digital marketing the products to raise awareness and build the brand.
pricing products and services to maximize long-term revenue.
focused on converting prospects to actual paying customers. Sales involve directly interacting with the prospects to persuade them to purchase the product.
So far so good. Now that we are clear about definitions, does this help us figure out when does your business require marketing (or sales) and how much of it does it require? As we set out to answer this for some examples, I realized that there was some nuance to this, especially when it came to a matter of
target customers – are yours’ consumers or other businesses
sales channels – do you sell direct or through channels
Of course, neither of the above is an either/or answer. You could have both consumer and business sales (think airlines, catering or training classes) and could be both direct or channel (advertising, over-the-counter medications).
While the role of marketing remains building awareness and generating demand – its relative contribution and nature of activities depend on which of these combinations your business falls into. With the rise of internet and e-commerce, certain categories of consumer-targeted businesses can operate without any sales force at all. Similarly, business-focused sales channels, which are businesses themselves such as aggregators or distributors, rely primarily on the marketing of their principals to drive demand. Even these folks have to market themselves to stand out from their competition.
Here’s a useful framework (and some examples) to think about this. What is the product or service you are selling and to whom are you selling it and how will you sell it to them? And what marketing will be directed towards whom? And what sorts of sales activities and personnel will you need to meet your goals?
Here are two different examples of companies that sell primarily to consumers (airlines, cars) or businesses (Facebook ads) and what they do for sales & marketing. Of course, all these businesses serve both consumers and businesses to varying degrees.
I’d love to hear how this looks for your business. Happy hunting.
This last weekend, I gave a talk at the Unpluggd Conference in Bangalore titled “Selling Your Business.”
It appears that the internet and world at large is filled with information on creating business plans, getting co-founders not to mention loads of advice on fund raising. Yet there is mostly silence or a lot of speculation on selling your business. Sure you hear about “OMG! Did you see Little Eye Labs got acquired by Facebook!” So when you read about RedBus being acquired or an acqui-hire (BuyNBrag) happening or product buy-out (Mango) – what is it that actually goes on? More importantly what is it you want? Are there lessons to be learned from entrepreneurs who’ve sold their businesses with various levels of (un)preparedness and differing degrees of (dis) satisfaction?
The talk was intended to serve as a brief How-to ranging from, “Should you sell?” “Where do you start?”, Who should be involved? What do investment bankers or other consultants do? all the way to the mechanics and esoterica of valuations, deal structuring etc. and the lessons learned from other Indian tech and non-tech firms going through a merger and acquisition (M&A).
Thanks to my friend Ramani, who originally inspired me to put this together.
A former colleague reached out to me recently seeking help. He’d inherited responsibility for a set of retail outlets in medium-sized city. Unfortunately the inheritance did not come with a marketing budget and he was wondering how he could set the business on fire. We briefly discussed what their business was about, what challenges he faced, what his competitors were already doing and such. We brainstormed a little and then tried to put down some specific action items or at least things to try.
As I reflected on our conversation it struck me how much of what we’d discussed was true not just for this retail gig, but for any business. As with all great truths, they seem simple enough to articulate, but is well worth reminding ourselves periodically. More importantly, regardless of the tactics we’d use, and these will change with both our business types, time and place, these three strategic steps will rarely change.
Creating Awareness People need to know you exist, before they can buy from you. It’s even better if they know why you exist, what you stand for and how you are different. But you gotta start with folks being aware. How do you create awareness, especially when you don’t have a marketing budget? In my friend’s case, it begins with the tried and tested real world methods such as handing out flyers at the street corner or a man with a sandwich board neither of which costs much. In his case given milk and dairy products he sells, targeting local apartment complexes, with both inserts in newspapers as well as display booth maximizes number of folks who get to know he exists. Of course getting his current customers to spread the word – word of mouth – is a great way to get the word out. This works whether you are an online school, SaaS B2B service provider or social network for new moms. Thought leadership, writing for the local (or hyperlocal) paper, presentations at local schools (or corporates) are ways to identify your brand/store/product to value for the prospective customer. Content marketing in many ways enriches all the above and builds a long tail of awareness creation.
Generating Footfalls Ok, now you gotta a lot of people aware that you exist. Now you gotta get them into your store – physical in my friends case, possibly online in your own. This is what marketers think of as Call to Action (CTA). How do you get someone who’s aware of you to act upon it – usually by visiting you. Promotions, contests or freebies are common ways of generating footfalls – for instance the chappie handing out flyers at a street corner, could offer a free ice cream (or n% of a second purchase) as a way to induce footfalls. Online free e-books, flash sales, or other forms of giveaways could be used to induce footfalls. Keep in mind, what tactics you use to generate footfalls will change with the nature of your business, physical vs online stores, target audience, time and place. In fact tactics that work at one time may not work or worse yet backfire at other times. Generating footfalls need not be only about price or giving away stuff for free, but is always about providing value for the customer. Skin type testing, bra fitting, financial education – all these are things of value to the user that can help them cross your threshold, and it need not cost you money, at least not a whole lot.
Building a relationship All of us, however good or bad, can get one customer or some customers to buy. The trick is how do you get a lot of them buying on an ongoing basis, bringing others in or inducing others to buy. This requires that we build a relationship with our customers. Just because we want to have a relationship with them doesn’t mean they’d want one with us. Worse yet, if you did a poor job with creating awareness, either by misleading them or worse, they’d want nothing to do with you. Also if you generate footfalls under false pretence – using bait and switch tactics or worse, they not only run away but tell 10 other people to avoid you. So being authentic, understanding their needs is the first step in building a relationship. Consistently serving their needs, ideally anticipating, setting and exceeding expectations is the way to build lasting relationships. While not trivial, it’s not rocket science either. In my friend’s case, it’s knowing the regulars, keeping in touch with them, not just in the store but outside. In your business it may involve newsletters, making recommendations or connecting with partners or other service providers and above all listening to them, what they are saying and what they aren’t.
As the writers Sean Platt and Johnnie Truant advocate Write, Publish, Repeat, to become a successful writer, building business is all about Create Awareness, Generate Footfalls, Build Relationships. Repeat.
After years of planning to lose weight and get in shape (sound familiar?), this last year I finally got my act together. Sure, a mild diabetes scare and being termed obese in that clinical manner only doctors can, helped me finally get off my duff.
Over a six month period, I dropped about 20 kgs (nearly 44 lbs) and over the next six months have managed to keep those pounds off – in the bargain my resting heart rate went down to mid-to-low 50s from the mid 80s and I feel great. I’ve written about how I lost those pounds elsewhere, but I realised that some of the very same lessons I learned while losing weight, were equally applicable to being a good sales person. So here are the four lessons.
The executive summary here
Make every day count – sales is one activity, that you can’t turn on and off, but have to pursue, doggedly, determinedly, daily. No ifs, ands or buts!
Plan & start your day early As Brian Tracy says, Eat that Frog – get it done first thing in the morning. An early start will set the tone right for each day – planning makes sure that early start is productive.
Measure but in moderation Have specific goals and targets and measure them diligently. Only what gets measured will improve. Don’t go overboard, results are what count, not just the counting
Teams make it fun Sales is hard enough with rejections and hang ups – make it easier by working with teams, including partners, customers and competitors and don’t roe a lonely road.
The longer version:
Every day counts Weight loss involves only two things – eating right (usually less) and exercising more. The critical thing is it has to be done every single day, certainly the eating right part. Exercising has to be done at least every other day. Some folks recommend taking Sunday off or even rewarding yourself on Sundays with a treat. Most sales folks get Saturday and Sunday off. Which means the other five days count even more. So make the calls you need, regardless of whether you feel up to doing them, do the research, meet the customers – relentless and daily discipline is critical for steady progress. And you know what? Once it is a habit, it doesn’t feel anywhere as oppressive as it might sound at first. Make every day count.
Plan and start your day early Overcoming 20 years of bad eating habits required me to start my day early and make at least two healthy meals (usually salads) before 7AM, so that when the munchies hit me at 11AM and 4PM I had healthy snacks ready with me and avoided the temptation of empty calories. Of course it also gave me feel a great sense of accomplishment each morning (even righteous at times) and set the tone for the day. Creating a daily selling plan, before even getting into work and often getting in the first few calls or follow ups before 8AM will give your day a great start. A side benefit I stumbled upon was that many hard-to-connect people were much easier to reach at the start of the day. Planning and starting early, meant I could balance some low-hanging fruit with a feel good factor and get chunks of time to handle that hard-to-crack accounts.
Measure but in moderation The first thing I did, once it was clear that I was going to have to lose weight was to get a weigh scale and the doctor did set me a target (yet to be reached). I started with measuring everything – how long and how intensely I exercised and how many miles I covered in a given time. Similarly with my selling, I found initially measuring and staying on course with activities – did I make n calls a day, did I send the info to m people, helped me do the right things – so regardless of how I felt on a given day, I was moving things forward, however incremental at times. Initially when the needle began moving it was very motivating but excessive measurement (such as weighing myself daily) can be both obsessive and at time depressing, for as I discovered our bodies have an ebb and flow of their own – not unlike relationships in a major account or most other things in life.
Teams make it fun Selling, much like weight loss can feel like a lonely pursuit – worse yet a competitive one with the other members of your own sales team and competitors. Rather than envying the guy who’s running faster than you, on the treadmill next to you, working on a buddy system or with a team of running companions made it not only fun but a learning and fulfilling experience. Similarly sharing leads or even scuttlebutt about buyers or opportunities with team members whether in sales, marketing or technology and occasionally with the guy from the other company, always pays off in spades, not just karmically but often in new business and leads of your own.
Enjoy the journey – if it’s a chore, whether exercise, eating healthy or selling, if you don’t enjoy the journey it’s not worth doing!
This last quarter, I met several interesting startups, that had a clutch of good customers. When I asked them “How can I help you?” at least three of them asked for help with sales. Not what you’d think, as in find me customers or introduce me to prospects but how do I manage my sales pipeline. In fact two of them specifically had the question “How do I track my sales pipeline?”
Over the last several years, while I’ve used a variety of tools from mere contact managers through sophisticated deal trackers to full-fledged CRM suites, I’ve found myself returning each time to a simple spreadsheet-based sales tracker, at least in the early days. The tracker has not only evolved as I’ve learned but stayed surprisingly simple and has worked just as well in a fund-raising function at non-profits as it has in a for-profit startup.
As I promised these founders, I’m open sourcing the sample tracker as an Microsoft Excel spreadsheet as well as Google docs template. The tracker can be used for selling products or services or combinations thereof. You can download it here.
The tracker has three parts.
1. Setup – your business basics
Based on the nature of your business (product or service), actual sales offerings and the sales process your business may have to follow, you can tweak the setup. All this is done in a single worksheet (the last one, titled “Stages, Categories, etc.” of the online sales tracker). This one time set up of your product or service offerings, your sales persons (or deal owners), and stages of your selling process, makes maintaining your sales tracker easy and minimizes human or data entry errors.
Figure 1 – Typical Sales Stages
Sales stage this is simply the series of steps you have to go through from start to finish to close a sale. It begins with you first identifying a potential target customer for your product or service and runs all the way through receiving payment from the customer (never forget collecting the money is a critical part of making a sale). Figure 1 shows one such typical sales cycle.
Figure 2 – Sales stages for a demo-based sale
Sales stages obviously can vary for your particular business – one common variant that I encounter is when a demo installation or trial period needs to be offered to a customer (something you ideally want to get away from, but unavoidable particularly at tech startups in the B2B space). In this case there may be more interim steps (or stages) in your sales tracker.
Similarly you can set up your product or service offerings, as in actual names or code names that tell you what product or service you are talking about.
Tip: Typically I’ve found it useful to precede the offering name with a numeral such as 1-Bluetooth Stack or 2-SEO Consulting, as this makes sorting and other types of numeral based operations easier. For instance variants could all be numbered within say 100-200 so reports can be easily generated.
2. Sales Tracker
The sales tracker is a straightforward spreadsheet, with each prospective sale or deal on a separate row. For each deal, the row (or record) spells out, who the customer is, what is it that’s being sold (opportunity or offering), what revenue (or selling price) you expect, what sales stage is the specific deal at, who owns the deal and what the target close date is. You can of course have additional fields such as comments, or next steps, key customer contact. Figure 3 below shows a sample tracker for product sales.
Figure 3 Sales Tracker
The tracker also has variants of the sales tracker, if you need to track number of units (N) and have a unit price (P) and therefore compute deal size based on NxP (tab, Sales_Tracker_B_Units). Similarly there’s a tracker variant for service or project selling, (tab, Sales_Tracker_C_Project) where you can add descriptors for a project in addition to any opportunity or offering name you provide. Of course your business may require yet another variant, but you can simply by adding columns make the tracker your own.
By using the Filter function in Excel, you can look up deals
of a particular size or greater
expect to close prior to a specific date
belonging to a particular sales owner or product (or both)
at or before a certain sales stage
that have closed but you’ve not gotten payment
In other words, an individual sales guy (that’s you) can see which of his deals he should focus on this week to close, what is the value of deals you intend to close this month (or week or quarter), which deals have NOT moved for more than a month – you get the idea, you can pretty much filter it any way you need.
3. Summary Report
Figure 4 Report Master
The first tab Report_Master, is a quick overview report of your sales pipeline. It presently has both #deals and deal value by sales stage. I’ve set these up as formulas – these could just as easily be set up as pivot tables if you so desire. You could do without this master report sheet, by merely filtering the sales tracker sheet itself. Alternately if you find that you are running some searches often, you can just have them set up as reports. Its also useful to have a report if you multiple folks are using the tracker and you want a big picture view.
Good luck with your sales – as and when you make improvements do share and spread the love and knowledge. If you have any questions please feel free to ask questions in the comments below. Spread the word. Happy selling!
Once again, a question posed at Quora, “How can a straight out of college entrepreneur find clients for IT service based start up?” triggered these thoughts. As I have been recently looking at college startups, the entire issue of finding that first customer has been hovering in the background. When I cast my mind back to what worked for me at Impulsesoft, SiRF, Synopsys and Zebu, here’s what I came up with.
Referrals If you have [a] customer[s], start with them and ask for references. Any time an existing customer refers you, either to someone else within their company or others outside, it makes closing that deal a whole lot easier. Even when someone declines your services, you should ask them if they can refer you to others who may be able to use your services
Leads If you are a raw startup without a single client, then I’d start by making a list of every working adult you know – and reach out to them – with a one pager (if in print) or a single email, briefly explaining your offering in plain English, and asking them to introduce you to potential customers. As Esther Dyson, angel investor & writer suggests, ideally in your email, you’d write a brief email, that your recipient can forward after only having to add the name to the Dear […] at the beginning and put their name at the bottom. Don’t forget to add every person you went to school, college or rock show with to this list.
Cold calling Despite claims that the world has changed and sales (& marketing) are not what they were, for a raw startup cold calling is a good way to both get a sense of what’s out there, what issues you will face when you try to sell (even with referrals) and refine your own pitching – of what problem you address and how what you offer is the right thing for folks. Best thing to do with cold calling is to have a fixed time each day (or n days a week), when you’d send emails or make phone calls to reach prospects. Cold calling is one of the hardest things to do and has low conversion rates, yet will serve you well in the years ahead. Check out The Complete Idiot’s Guide to Cold Calling by Keith Rosen
Networking/speaking/free services Offering advice, giving talks and a free hand out, such as a tip sheet at industry forums, to business groups or other networking forums is a great way to build leads. For instance if you offer services in network security, you’d talk about “Top 5 Security Risks to your Business” and provide a free checklist that people could use to audit their network security. This can of course be done on online forums as well such as LinkedIn answers or your own blog.
In bound marketing In many ways this is like networking & free advice but done with content on your own website as a means to deliver value that would drive traffic to your website. In other words bring customers to your site, particularly self-selected prospects, ones looking for a solution. Companies such as http://hubspot.com/ do a great job of both educating you about inbound marketing and providing tools to make it happen.
No one looks forward to a visit to the dentist, especially if it is a root canal that’s in the offing. Yet, most people would choose a root canal over haggling with a car dealer. The words ‘used-car salesman’ have come to epitomise our loathing for the selling profession. The sweet-sounding young thing who keeps calling offering me credit cards and personal loans, is most reluctant to answer when I ask her if it is a sales call. So it would appear even salespersons are at times ambivalent about their jobs.
In this scenario, how important is the sales function for an entrepreneurial firm? Before we answer this question we need to recognise that most entrepreneurial firms begin selling before they have a product and many even before they are a company.
As a founder, you have to sell your ideas to other founders, prospective employees, potential investors and future customers. Often, we fail to acknowledge this as selling as our passion and vision drives us to make believers of others. Selling, however, is what it is and it is critical for the success of your entrepreneurial firm.
Furthermore, it is far too important to be left to the sales folk alone. You need to be selling your company to all the stakeholders, selling your product and its differentiation to your own sales people and selling to customers and partners your unique value as a supplier and partner.
Founders as sales people have their share of risks — they are too close to the company, its products and their perceived benefits that they may not hear too well what customers are telling them.
As a start-up evolves to be a real business, the need to bring in professionals for the sales function grows. Salespersons spend most of their time outside the company and ensuring that they are aligned to your vision, values and goals is a continual process. If your sales people are to win hearts and minds even as they rake in the dollars selling your products, it is important that you stay involved after you bring on board the right salespeople.
Much like customer support, they will be the face of your company and the less they are perceived as ‘used-car salesmen’ the better you will be served.
Selling process For a company’s sales team to be consistently successful it requires a clearly spelt out process for selling.Many companies discover that writing code or building a product is all too easy to get started without adhering to a well spelt out process. However, disaster in the form of poor products or, in the worst case, a shuttered company, is the likely outcome in the absence of such a process. Similarly, too many start-ups think about sales, if at all, late in the game. Even when they plan for it, they grossly underestimate what’s required and make erroneous assumptions such as “the product will sell itself” or marketing or the technical personnel will be able to sell it. However, to continuously, predictably, and most importantly, profitably sell your product you need the right professionals with the right tools and a strong selling process.
The most common tool or process in sales, be it multi-million dollar selling to major accounts or one-on-one retail sales, is the Sales Pipeline. Simply put, it is a series of steps, such as figuring out who your likely customers are (prospect identification), which of them have money to buy, are likely and desirable (qualifying the buyers), and understanding what need they are trying to fulfil (understanding needs).
The accompanying table shows one such sales process; your own may have fewer or more steps depending on the nature of your business. Even in a restaurant or store, good salespersons go through this process, figuring out which customers are browsing as opposed to buying, what it is they are looking for, is the wife or the friend the decision maker, can they up-sell you with accessories (or appetisers or drinks in a restaurant), negotiating price and closing the deal.
However, in high complexity sales such as technology products or high-value selling, the time taken between the first step in the sales process and the order closure may be several weeks to months. And, when you have many such prospects and sales deals in the air, without strict adherence to the process, your survival will be in question.
The term pipeline is used to refer to the sale process, as the sales organisation will aspire to continuously move customers from the first step (identification) through the last step (payment receipt and asking for referrals). At any time, a good sales organisation will have a number of different prospects at each stage of the sales pipeline. Ensuring that the pipeline never runs dry and that a bottleneck is not created at any stage (proposals or negotiations for instance) is critical for predictability and sales success.
Daily discipline Selling, in my view, is the most unforgiving of all jobs in that it requires a level of daily discipline and commitment that few other jobs require. In engineering or marketing you can afford to have an off day; put something off for tomorrow or next week. However, in sales, the consequences of putting something off for tomorrow or next week are often disproportionate and tend to last longer. For instance, when you don’t call on that new prospect you had intended to or make that follow-up phone call about your proposal, that’s when that key decision maker goes off on his six-week sabbatical or your client has an organisational restructuring or budget cuts! Though a good sales person bounces back from this setback, it may take another three-six month selling cycle before she has another shot at the account.
This is made worse by the fact that sales people face rejection every day — from prospects and customers who tell them why their competitors’ products are better and of course less expensive and, worse yet, customers who love the product and your company but they are not buying right now! One week in the shoes of any of your sales people is about the most sobering experiences any of your non-sales employees can have.
Successful salespeople attribute their performance to attitude, discipline and perseverance. The discipline they refer to is in how they manage their sales pipeline.
Typically, regardless of the number of steps in it, the sales pipeline is broken down into three segments. Segment A – those accounts that are nearest to closure, Segment C – those that you have just started working on and are still in the early stages and Segment B — all those in the middle between A and C. Great sales people work their pipeline in the order A-C-B, spending maybe 20-30 per cent on A, 40-60 per cent on C and 20-30 per cent on B. Novices and less effective folk by focusing predominantly on A or A and B tend to let their pipelines run dry or at the very least become very unpredictable.
What time management people refer to as Quadrant II activities — namely the important but not urgent activities such as getting to know the decision making process or the decision makers — are typically Segment C activities. If like the industrial ant, you don’t work your C accounts on a daily basis, like the proverbial grasshopper you are likely to starve once the spring of A accounts passes.
Relationship building If you spend a week accompanying your top sales person, you will discover as one of our engineers recently remarked, “It’s not the product or even the sales pitch but the relationship and trust that the sales person has with the customer that brings home the deal consistently.” People like buying things from people they trust and like. Relationships, especially ones that engender trust, are not built overnight. This is the ultimate Quadrant II activity that separates the great sales people from the merely competent.
With today’s constantly evolving (and rapid obsolescence of) technology, products get rapidly commoditised and features contribute far less to differentiating your offering. So how do your sales people stand apart from the din of competing offerings? Recent selling research and literature talk about consultative selling. From the days when the pyramids were built, great salespersons have always been consultants and partners first. They strive to understand the real issues customers are trying to address and provide them the best possible solution within their constraints. That may, at times, even mean sending them to the competitor. No good deed goes unrewarded especially when a strong relationship has been built.
Those that have built good relationships are not only rewarded with more deals, but are less likely to be perceived as used-car salesmen or worse than a root canal!
Over the last several years, I have written about startups, entrepreneurship and business in general in the Hindu BizLine and Wall St. Journal. I have compiled these for easy access in the column below.