Posts Tagged ‘sales’

Companies from multi-million dollar corporations to small business ventures all over the world have faced the tough question of whether or not they should spend more money on marketing or sales. The funny thing is when you think about it is that each of these departments is attempting to accomplish the same thing: the promotion of the company and incurring of sales. For this reason alone many businesses lump their marketing and sales together under one umbrella. As a small business owner, you have this luxury.

However, it is imperative that you understand that marketing and sales is not the same thing and that there are different activities involved in each. When utilized correctly, marketing and sales can go hand in hand in promoting your company and making it successful. When they are misunderstood and mismanaged, the effects can be devastating. Marketing and sales strategies are best when they are used as an integrated unit. Before you can do that, you must understand how each division works.

Marketing is the part of your company that is charged with getting your customers attention and getting them to buy your product. It is really a persuasive art form, and the successful marketing department utilizes this persuasion in every marketing campaign they launch. They want to attract as many people as possible and will do so by branding your product, advertising it, promoting it through a variety of means, and using public relations to get the product out there. When marketing is performed properly and is effective, the customers are going to buy the product.

This is where the sales department steps in. Marketing brings the people in and sales close the door behind them. The sales department is interested in making a single sale at a time. They focus on the individual customer in an effort to make the sale, get a signed contract, or get the customer to enter into an agreement with your company. To do this, they can cold call customers, use an incoming call center to engage in the customer, or directly sell the product.

You can see the cycle. Marketing gets the customer ready to buy and sales closes the purchase. Sometimes it is necessary for marketing to provide the customer with additional information so they can make a decision. Sales will step back and wait to close the deal. As you can see, when these two departments are used together, they are an effective weapon for your business.

To start using a combined marketing and sales strategy you need to take a look at your contacts and customers and sort them out. One set will be current contacts and customers who simply need to continue being persuaded to purchase your product, called the warm lead. The other set will be contacts and customers who have never heard of nor have no interest in purchasing your product, called the cold lead. You should always start with the current customers and target promotional devices towards those who need a good reason to invest in what you are selling. Sales move in when the lead goes from a cold lead to a warm lead to seal the deal.

Always try to develop an integrated marketing and sales strategy that is in balance. When you do this, the two departments will be able to work in tandem to bring your company success.

Suppose a profitability analysis reveals that the company is earning poor profits in certain products, territories, or markets. Are there more efficient ways to manage the sales force, promotion, and distribution in connection with these marketing entities?

Some companies have established a marketing controller position or hire outsourced help to improve marketing efficiency. They examine adherence to profit plans, help prepare brand manager’ budgets, measure the efficiency of promotions, analyze media production costs, evaluate customer and geographic profitability, and educate marketing personnel on the financial implications of marketing decisions.

Sales Force Efficiency

Sales managers need to monitor the following key indicators of efficiency in their territory:

• Average number of calls per salesperson per day

• Average sales call time per contact

• Average revenue per sales call

• Average cost per sales call

• Entertainment cost per sales call

• Percentage of orders per 100 sales calls

• Number of new customers per period

• Number of lost customers per period

• Sales force cost as a percentage of total sales

When a company starts investigating sales force efficiency, it often finds areas of improvement.

Sales-Promotion Efficiency

Sales promotion includes dozens of devices for stimulating buyer interest and product trial. To improve sales-promotion efficiency, management should record the costs and sales impact of each promotion. Management should watch the following statistics:

• Percentage of sales sold on deal

• Display costs per sales dollar

• Percentage of coupon’s redeemed

• Number of inquiries resulting from a demonstration

Distribution Efficiency

Management should search for distribution economies in inventory control, warehouse locations, and transportation modes. One problem is that distribution efficiency declines when a company experiences strong sales increases. Strong sales surges can cause a company to fall behind in meeting delivery dates. Management responds by increasing sales force incentives to secure more orders. The sales force succeeds but once again the company slips in meeting delivery dates.

Management needs to identify the real bottleneck and invest in more production and distribution capacity.

In our increasingly global society, many companies cannot afford to live with the illusion that their domestic markets will always be strong. For this reason, many companies choose to market overseas as well.

By taking a venture into international markets, a company can offset seasonal fluctuations in sales and increase profits in general through exposure to a greater number of prospects. Further, technical proficiency is often increased by expanding into markets with greater expertise in certain areas of technology. In addition, expanding into foreign markets can minimize a company’s risk of losing market shares to customers who themselves take advantage of the Internet to look for suppliers of goods and services in foreign markets.

There are many benefits to marketing a company’s products or services overseas, but the decision to go international must be made carefully. Cultural and language barriers, political issues and variations in religious beliefs, societal norms, and business negotiation styles impact how business should be conducted with international counterparts.

Two steps can prepare an organization for an overseas effort. First, an international marketing plan must be developed, and second, the organization must determine how it will enter the new market.

Since creation of a dedicated export department can be an overwhelming and expensive task, an alliance with an outside party can reduce the time and effort it takes to become established in a foreign market. One option is to establish a joint venture. Another is the use of an export management company (EMC). An EMC like Khanstellation Group has contacts and knowledge of foreign cultures and governments that can smoothly facilitate an international effort.