Trish Takes On

Quick! What's the difference between marketing and sales?

Don’t worry if you can’t answer that question: Though business literature implies otherwise, most people are unable to make a distinction between the two functions…even people in big corporations.

Actually, sales is pretty easy to get a grip on: It’s about bringing in business. Generating revenue. Making the line on the chart angle upwards.

But marketing? Marketing is not about bringing in revenues—at least not directly. If you are doing something that you call marketing and it is producing income, that’s not marketing. It’s sales.

There are as many definitions on the street as there are companies. Well, that’s an exaggeration, but there is an amazing variation in how different “experts” define marketing.

For example, there are stores that provide a wide range of services that use the word “marketing” to describe what they do. These outfits produce brochures, flyers, graphics, business cards, graphics, and a lot of other "stuff" that can be used for marketing purposes. While those can all be useful, a business needs to get more than just "stuff" to have effective marketing programs.

Try Googling “marketing” on the Web and you will get another angle on this “clear as mud” function.

Your first page of results will likely equate marketing with sales (as in “how to close more leads”), offer web site hosting and design services, or list a slew of marketing consulting companies that offer all kinds of ways for businesses to spend money.

Well, then, let’s turn to the American Marketing Association. What better place to get a useful definition of marketing than the AMA? This august body of marketing professionals should be able to clearly define marketing. Here is their latest, released a few months ago with much flurry of public relations:

Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Huh?

What does “creating, communicating and delivering value” actually mean? And “ways that benefit the organization and its stakeholders” is yet another buzz phrase that is so general that it’s meaningless.

A small business can't afford to devote its valuable resources simply to “creating, communicating and delivering value” in some nebulous way. How does one measure marketing activities to gauge whether they are doing that? Marketing activities must patently and measurably contribute to business growth. There just isn't enough time and money to tolerate fuzzy programs.

So what is marketing really? The definition may be context-dependent; for example, marketing for a large consumer products manufacturer will likely look quite different than marketing for a four-person legal practice. For small (actually, all) businesses, here is a suggestion that articulates how marketing should be considered: Marketing is a business function that increases awareness and generates interest in the company so that sales opportunities increase and the sales cycle decreases.

Think of marketing as increasing awareness and generating interest in ways that make selling easier.  And also keep in mind that:

• Marketing is not sales, though it had better be a close, trusted partner of the sales function.
• Marketing is not just “stuff’—though printed and electronic media will certainly be needed to succeed in its function.
• Marketing is not limited only to target customers-it extends to any audience that the company wishes to influence positively (this could include employees, vendors, channel partners, the community, or other important interest groups).
• Marketing is NOT a "one size fits all" proposition-you must be very clear about what you want your marketing to accomplish before you can decide what activities to pursue.

Your marketing activities should be increasing awareness and generating interest in ways that grease the sales wheels—mainly by generating leads and referrals. And if your marketing can go as far as serving up qualified leads and referrals, so much the better; your sales energy can then focus on real prospects for your products and services.

Integreted marketing and you

On the surface, integrated marketing is simply a coordinated marketing message across different media, but it is actually much more.

Integrated marketing is an aggressive planning process that allows the development and tracking of marketing strategy. It uses an extensive amount of information to make the marketing initiative greater than the sum of its parts, if those parts work together to support each other.

All too often, small business owners tend to follow a “Ready! FIRE! Aim!” approach when they market their offerings.

Actually, and perhaps surprisingly, this back-asswards strategy is not limited to small businesses; large companies can also be surprisingly fractured in terms of how marketing is implemented.

The roots of fractured marketing may vary. In a company where sales dominates marketing, programs can get created as knee-jerk responses to how sales is doing. If sales are down, marketing get used in an attempt to turn things around. If sales are up, marketing…well, marketing tends to get ignored. The result is as if marketing has attention deficit disorder: resources are moved from initiative to initiative, things are started and not finished, and everything is done for short term results.

This effect can also take place when the same person is doing both sales and marketing—which is often the case with small businesses. When sales are rocking, who has time to market? And when sales are down, the only marketing strategies that are interesting are those that will generate leads today.

Another reason for disconnected marketing initiatives is simple lack of planning. It can be very difficult to step back, take a deep breath, and dedicate a chunk of time to plan—beginning with overall business planning. There are so many choices when it comes to deciding how to pursue marketing that, unless you know what you want to accomplish for the business, it can be difficult to figure out what to do.

Steps in an integrated marketing system are:

1. Set up the customer database. This is an essential element to implementing Integrated Marketing that helps to segment and analyze customer-buying habits.
2. Create strategies that support business goals. Insight from analysis of customer data is used to shape marketing, sales, and communications strategies.
3. Determine tactics. Once the basic strategy is determined the appropriate marketing tactics can be specified which best targets the specific markets.
4. Implement tactics.
5. Evaluate results. Customer responses and new information about buying habits are collected and analyzed to determine the effectiveness of the strategy and tactics.
6. Make modifications to tactics and, if necessary, strategies.
7. Repeat steps 4 through 6, ad infinitum.

Marketing to "wants" rather than "needs"

A widely held belief is that people buy products or services that they need. The real truth is that, once basic needs get met, people will buy what they want rather than what they may need.

We need to eat; we want to dine out. We need shelter; we want a 3,000 square-foot home in a particular neighborhood. We need to clothe ourselves; we want a particular look or a specific designer’s duds.

Needs are totally rational while wants are purely emotional. Needs are based on fact while wants are grounded on perception. Needs are product- or service-specific while wants have very little, if anything, to do with the product or service being offered.

And here’s the kicker: Prospects always know what they need, but they may not necessarily know what they want. And what they need is often what they should want—but don’t—so they may not cop to the truth.

This is where savvy marketing (and then sales) come into play. If you effectively offer your target market what you know the majority of the consumers really want, you are going to make more sales.

Why? Small businesses that focus on the things humans need can’t compete with bigger competitors on the three things that are essential for this business strategy:

• Price, because the big guys can sell those tires, TVs, and beds cheaper than we can buy them at our vendor's highest discount.
• Location, because the biggies can afford to pay way too much for that corner with all the traffic.
• Advertising, because in the world of advertising, they're a foghorn and you're a piccolo.

Here’s the good news: Those same three factors work in your favor when you focus on wants rather than needs. Check it out:

• Most folks are only picky about price when they're buying things they need. When they want something, they're more likely to pay a little more for whatever it is they crave. For example, a bar of soap is about as basic as anything in the world.  But when two women open a boutique and sell their own handmade brands of scented soaps in not-so-uniform shapes and tied with satin ribbon, do their customers pay 100 percent more for their soap because it will clean their bodies better? Hardly. They buy because they want something special, which includes knowing the face and the name of the person who actually made this product for them. And, of course, the ribbon.
• You don’t need the corner property with all the traffic. Customers can park within a few feet of your front door instead of in a 40-acre parking lot. Plus, you've made it cool to drive a couple of blocks because your storefront looks more like they're coming home than walking into an institution.

Integrated marketing can leverage these factors to give you an edge as a small business. I’ll talk more about integrated marketing in future posts.

Entrepreneurial Hypochondria – An Epidemic

The November issue of Harper’s magazine reports in its always interesting Index that only 45% of the U.S. GDP is represented by salaries and wages, and that this is the lowest percentage ever since the statistic has been tracked (in 1929).  My logic says that a reasonably good chunk of the remaining 55% is coming from the self-employed or entrepreneurial among us. With that kind of marketplace, it isn’t surprising that the business coaching market has blossomed.

Unlike other types of advice-giving vocations (therapist, minister, CPA, for example), business coaches don’t need any kind of training or certification. All they basically need is something to sell and a mechanism to sell that something.  Oh, and credibility.

Interesting thing, credibility. It can be manufactured from nothing. Get somebody who is charismatic enough, and who doesn’t have a problem with distorting facts like they were Silly Putty®, and credibility can be established with very little basis in reality. That same charisma will do a great job selling, too, so a lot of money can be made on just a little bit of real experience.

Business coaching (and its close relative, life coaching) is a great place for silver-tongued quacks to create a perception of value in their constituents’ minds. I know a number of coaches who fit this mold, and there is no denying that they are a persuasive lot. They work hard to keep their customers spending money with them—which means that they have to keep implying that “you can’t succeed quickly without me.”

So, rather than having a coach who helps you become an independent thinking and true entrepreneur, you become so dependent on the coach that you never gain the confidence to fly solo, which is something a truly successful entrepreneurs must do, at least in terms of thinking and decision making.

This creates entrepreneurial hypochondria, with business owners unable to make any strategic moves on their own because they are convinced they are too “sick” to do it alone.

When you conduct due diligence on many business coaches (that is, find out the important facts about their business experience beyond company name and revenue produced), and sit down and really listen to what they are saying, it doesn’t take long to figure out that 1) they aren’t really saying anything new and 2) their advice is too generic to be of use on its own. A business owner in search of input could read a few good business books to get the same information and save a bunch of dough.

Having come down negatively on the topic, I must say that I think that there is a place for coaching in a business, but it is a very specific place.

When a business owner identifies an area that they need to master in order to grow, it can really help to find a coach who specializes in that area and hire their services for a finite period of time. Over the course of their career, such a business owner may have numerous coaches, each one helping with a particular aspect of the business and only around until mastery has been transferred.

There is only one business coach who has passed my own due diligence, and he is the only one who has made a real, honest to goodness difference in how I run my business. Sure, this guy wants you to stick around and keep buying from him, but not at the expense of your ability to stand on your own two feet and make the right decisions all by yourself. That’s my kind of coach!