Andys Blog
Andy Graham is the founder of One
Brand Group. He's positively brimming
with thoughts and ideas, not just about
B2B marketing, but about other things too.
Have a read, or – if you'd prefer to have a conversation – get in touch.
More thoughts here at Andy's site.
Have a read, or – if you'd prefer to have a conversation – get in touch.
More thoughts here at Andy's site.
Farming not mining - balancing marketing communications and sales
11/02/2007
The marketing budget can neither be created nor destroyed - it just moves around.
07/01/2007
How much do you spend on marketing?
03/12/2006
B2B is different - or is it?
26/11/2006
Brand strategy for new leadership or ownership
05/11/2006
Brand strategy for market positioning
28/10/2006
11/02/2007
The marketing budget can neither be created nor destroyed - it just moves around.
07/01/2007
How much do you spend on marketing?
03/12/2006
B2B is different - or is it?
26/11/2006
Brand strategy for new leadership or ownership
05/11/2006
Brand strategy for market positioning
28/10/2006
Farming not mining - balancing marketing communications and sales
Added 11 February 2007
An excess of either sales or marketing communications is damaging in the long term. So first let us review the balance between sales and marketing communications. Sales are measured by profit and loss; sales are defined by the close - the order confirmed. If we think about it, sales appear as a positive on your balance sheet. However, your successful sales are negative to the customer (i.e. your positive sales have a negative impact on the customer's balance sheet). If we follow this argument then we can deduce that marketing communications which has a negative impact on your balance sheet has a positive influence on the customer - this is balanced thinking.
Sales are 'hard' tangible and easily measured, where as 'soft' intangible relationships represented by marketing communications aren't. Marketing communications is measured by the emotional health of the business relationships.
As we can see the two forces of sales and marketing connect. Their opposition, negative and positive combine to create the whole and when one is very strong there is potential for the other to be too weak. Success comes by harmonizing both.
Whilst engaged on an internal marketing communications program we once heard a story about a highly trained and valuable salesman who resigned after he had been asked to contribute to the staff Christmas party. This cost saving looked very positive on the balance sheet and yet tipped this employee into a negative relationship with the business and he gave in his resignation. Not only did he take all the training with him when he left but two months later he landed a multi-million pound contract for a competitor and this would have paid for the Christmas party many times over! The positive cost saving very quickly became very negative (but invisible) effect on the business. None of this intangible loss was accounted for or visible. The only thing that was measured was the money saved, not the value lost.
Sales represent the price the customer is prepared to pay for your product or service. Sales do not create value for the customer, they measure it. Sales do not represent value created they reflect the value that is delivered to the customer.
It is obvious that insufficient sales has immediate and negative consequences for the business i.e. if sales and profitability dip below the overhead the business is in serious trouble. But it is worth acknowledging that over focussing on sales has consequences that are less apparent and in many ways more insidious.
To much sales focus, erodes the customer perception of value leading to commoditisation. If competitors too focus on sales in a given sector then price is forced down and value eroded for all, because focus on sales alone erodes value for the customer.
In B2B terms it is the over emphasis rather than under emphasis on sales that is the more usual problem... Sales are easier to track, target and measure. - 'closing' is the mantra we understand. The champagne corks are popped when the deal is done. When was the last time we remembered to reward a great 'open'.
Over selling erodes differentiation. Sales represent the harvest of the value created through marketing communications. If value creation is weak then sales will inevitably dry up. Sales is taking, marketing communications is about giving something back. Sales are measured by the P&L marketing communications is measured by loyalty and margin.
Do you win business without tendering?
Do your products sell out at a higher margin to comparable products?
If so then this would point to successful marketing communications.
Symptoms of under communicating include:
lack of differentiation,
price competition,
customer churn,
lack of loyalty.
These conditions are not remedied by sales they are cured by improving communications.
Added 11 February 2007
An excess of either sales or marketing communications is damaging in the long term. So first let us review the balance between sales and marketing communications. Sales are measured by profit and loss; sales are defined by the close - the order confirmed. If we think about it, sales appear as a positive on your balance sheet. However, your successful sales are negative to the customer (i.e. your positive sales have a negative impact on the customer's balance sheet). If we follow this argument then we can deduce that marketing communications which has a negative impact on your balance sheet has a positive influence on the customer - this is balanced thinking.
Sales are 'hard' tangible and easily measured, where as 'soft' intangible relationships represented by marketing communications aren't. Marketing communications is measured by the emotional health of the business relationships.
As we can see the two forces of sales and marketing connect. Their opposition, negative and positive combine to create the whole and when one is very strong there is potential for the other to be too weak. Success comes by harmonizing both.
Whilst engaged on an internal marketing communications program we once heard a story about a highly trained and valuable salesman who resigned after he had been asked to contribute to the staff Christmas party. This cost saving looked very positive on the balance sheet and yet tipped this employee into a negative relationship with the business and he gave in his resignation. Not only did he take all the training with him when he left but two months later he landed a multi-million pound contract for a competitor and this would have paid for the Christmas party many times over! The positive cost saving very quickly became very negative (but invisible) effect on the business. None of this intangible loss was accounted for or visible. The only thing that was measured was the money saved, not the value lost.
Sales represent the price the customer is prepared to pay for your product or service. Sales do not create value for the customer, they measure it. Sales do not represent value created they reflect the value that is delivered to the customer.
It is obvious that insufficient sales has immediate and negative consequences for the business i.e. if sales and profitability dip below the overhead the business is in serious trouble. But it is worth acknowledging that over focussing on sales has consequences that are less apparent and in many ways more insidious.
To much sales focus, erodes the customer perception of value leading to commoditisation. If competitors too focus on sales in a given sector then price is forced down and value eroded for all, because focus on sales alone erodes value for the customer.
In B2B terms it is the over emphasis rather than under emphasis on sales that is the more usual problem... Sales are easier to track, target and measure. - 'closing' is the mantra we understand. The champagne corks are popped when the deal is done. When was the last time we remembered to reward a great 'open'.
Over selling erodes differentiation. Sales represent the harvest of the value created through marketing communications. If value creation is weak then sales will inevitably dry up. Sales is taking, marketing communications is about giving something back. Sales are measured by the P&L marketing communications is measured by loyalty and margin.
Do you win business without tendering?
Do your products sell out at a higher margin to comparable products?
If so then this would point to successful marketing communications.
Symptoms of under communicating include:
lack of differentiation,
price competition,
customer churn,
lack of loyalty.
These conditions are not remedied by sales they are cured by improving communications.