MARKET INSIGHTS: A reality check for sales and marketing

Jan. 18, 2013
On the budget and financial statements of every photonics company there appears an item titled "Sales and Marketing." These two terms are almost always bunched together, although they are distinctly different in nature.

On the budget and financial statements of every photonics company there appears an item titled "Sales and Marketing." These two terms are almost always bunched together, although they are distinctly different in nature. The definition of sales is simple: getting orders. But this is not the case for marketing, for which multitudes of definitions exist. At its simplest meaning, marketing is an activity that optimizes a company's potential to generate sales. Thus these two terms are in fact very different activities requiring different talents.

Sales tools

Let's first take a closer look at sales. To expect traditional salespeople to be involved in marketing is bound to end in failure. They have one job only: getting orders. Their paycheck and incentive schemes are based on making sales, not on being involved in marketing. Most of these salespeople are outgoing and more inclined to talk than listen (which always struck me as odd since we humans are anatomically equipped with two ears and one mouth, and one could assume that we would be more effective in listening!).

I have found that listening is a far more effective tool for sales than talking. I like to illustrate this with the experience I once had with a buyer for a large medical instrument company in the San Francisco Bay Area. Whenever I called him, he did not want to see me as he was happy with his current supplier—until the day he was not so happy anymore and asked me to visit him. He turned the clock on his desk to face me and said, "I give you five minutes to make your pitch."

The five minutes became half an hour, with him talking, me listening. During that time he pulled out a tray with all kinds of medals that he collected and highly prized, and observed that he was missing a particular World War II medal. I made a note of that and half a year later, while visiting a flea market in London, I came across a guy selling all kinds of medals. I asked him if he had the one that my potential customer had described. And lo and behold, he had it although it was badly tarnished. So I bought it for £10 and gave it a nice polish.

Back in California I called the buyer and told him that I had something that he might be interested in seeing. When I put the medal on his desk, he was almost in tears. Within two weeks the first of many orders arrived. That is the human side of selling that will always be in fashion.

I hear frequent comments from "experts" that salespeople are becoming less and less important given that a company's web site takes care of most of the sales job—customers simply check your web site and click "order now," end of story. If you don't agree to that approach, you are clearly dated.

But I beg to differ: In our industry, it takes an average of five personal visits by sales engineers before getting their first order from OEM customers. There is no doubt that web sites have become a very important marketing tool that provides customers with useful information about a company's products and services and an easy way to place orders, but the need for personal contact with customers, particularly when dealing with OEM customers, is as strong as ever. Given the very competitive nature of the marketplace, relationships are at least as important as product features in getting sales.

Marketing edge

Now let's take a look at marketing. It is not uncommon for people responsible for marketing to hold the opinion that sales is just an element of marketing; this puts the cart before the horse. A company may invest a fortune in marketing activities, but if this does not result in sales all this effort is wasted. Any marketing activity, whether advertising, trade shows, seminars, or web sites, must always be focused on sales.

Unfortunately, there have been many examples where marketing has become a goal in itself, but this obviously misses the point. Adding to the challenges, marketing is one of those activities that is difficult to quantify or assign performance targets. How do you measure the efficacy of trade shows, advertising campaigns, web sites, or the like?

It's a common practice for companies to measure the success of trade shows and advertising by the number of leads generated and number of hits on their web sites. This is fine, but you cannot pay bills with this information. So how does a company justify the amount of money invested in marketing? There is only one objective performance indicator: sales.

In our extremely competitive marketplace, getting sales orders without effective support from marketing would be very difficult if not impossible. So the relationship that often exists between the marketing and sales departments should be changed to one of close cooperation with a common shared objective: maximizing sales.

One of senior management's key responsibilities is to create an organizational framework to achieve this goal. Without a commitment nothing will happen because it is unlikely that the sales and marketing departments will do so by themselves.

Crossing the divide

There is another critical aspect that continually divides sales and marketing. Sales is always a short-term activity, contributing to today's financial results. Marketing has the responsibility to provide a mid- and a long-term perspective, as well as the guidance to develop products that will be required in tomorrow's markets, and thus the sales that will guarantee a company's long-term survival.

One of the most effective ways to achieve this is to assign the responsibility of market researcher to a high-level employee with an adequate technical background and market knowledge. The only responsibility of such a person is to continually visit customers—both established and up and coming—to learn about their plans for the future and how the researcher's company can be most effective in supporting each customer's objectives.

This person is not visiting customers to make a sale. Their only responsibility is to gather information by getting close to the customer's key design engineers and supporting them in their efforts to develop future products, making suggestions on how to lower cost and improve productivity for the purpose of aligning the customer's objectives with his or her own company's abilities. This approach will generate a level of trust between the two parties, ensuring timely knowledge of any changes in the customer's plans and allowing his or her company to react promptly to those changes. One other benefit is that building such a close relationship makes it more difficult for competitors to move in.

Finally, it is essential that the CEO of a photonics business visits key customers personally at least once a year. Information that such a visit generates is often not available when salespeople call on a customer—and this information may be crucial when it comes to how the photonics business is performing, in particular when it comes to issues such as customer support, product quality, and pricing.

To come full circle, the most successful sales engineers are those persons actually involved in marketing who talk less and listen more, and engage in hands-on market research, learning what the customer needs now and in the future. The resulting knowledge allows the sales engineer to formulate a presentation that addresses what the customer wants, not just what the company has to offer.

About the Author

Jan Melles | President, Photonics Investments

Jan Melles is the president of Photonics Investments and was the co-founder and later chairman of Melles Griot. He is currently on the board of numerous public and private companies, and invests in and brokers the mergers and acquisitions of photonics companies. 

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