Don’t worry; this isn’t going to be an article about Sado-Masochism! Well, come to think of it, that term may apply to what some founders and senior managers in software and hardware companies are doing to themselves and their companies. What I’m referring to is the VP who gets hired to manage both the Sales and Marketing functions. Oftentimes this turns out to be a job we like to call jokingly the “VP-SALES & marketing”. Thus the phrase “Big S, little m”. The position is usually offered to a crack sales guy or gal, who also sometimes happens to have a marketing title somewhere in their job background.
JUST GO GET THE ORDERS, MR./MS. VP-Sales & Marketing
To tech company insiders the meaning is clear. The anointed candidate will be expected to go out and beat the bushes for customers and bring in new orders quickly. Oh, and by the way, Mr. VP, you’ll also be in charge of producing data sheets and attending a few trade shows. Oh, I almost forgot, you’ll be in charge of that website we now have too! You know, all that marketing stuff!
In many of these cases, I would recommend that anyone being approached for a job like this run in the other direction as fast as possible. These positions are often classic “traps”. The attitude is “We’ve got a great new product/technology; all we need is someone to go knock on a few customer’s doors and bring the purchase orders back to headquarters”.
Hopefully, most will recognize that this is usually a recipe for a very unhappy outcome. The founders and senior management will be unhappy with revenue and profits and the new VP will be VERY unhappy because he’s likely to get fired within 9-12 months. The other employees will be depressed and talking about how “Sales & Marketing” is the weak link in the company. And the investors, of course, will be very, very cranky.
Why does this occur? It often occurs when the key senior decision makers (CEO, CFO, Founders, etc.) don’t have either a background or an appreciation for the difficulty of the sales function. And it’s even more likely to happen when there is no key decision maker in the company with a background in marketing. The decision maker’s attitude also often includes an over-confidence in the role that “superior company technology” plays in the overall success of a company.
IS TECHNOLOGY ENOUGH to win sales orders?
Certainly having a defensible technological advantage is a major factor in the success of a high tech company, especially when that company is in startup mode. The problem arises when management believes this by itself is enough to “win”. How hard is cold calling and knocking on doors for a sales force with an unknown company name? Not to mention an unproven product, which sometimes solves a problem the customer may not yet know exists? I’ll give you a hint—it’s really, really hard! One of the hardest thing there is in business, imo.
As I alluded to earlier, in this scenario there is likely a lack of understanding of the crucial role that marketing plays in establishing a new product in the marketplace. There may be a view that marketing is some theoretical, squishy function that is a waste of money, or maybe something that has value but the company just can’t afford. A startup’s management might think we’ll introduce the product, sell a bunch and build the marketing function later. Unfortunately, that thinking is as backwards as can be and will usually lead to the unhappy results discussed earlier in this article.
Why IS marketing so important, and why is it such a critical mistake if it isn’t a major part of the new product process? It’s because marketing is crucial in every phase of introducing and growing the revenue of new products, from conception until end-of-life. In the beginning, an engineer may come up with a great new technology that appears to allow someone to do an existing task better. Or maybe it allows someone to do something that wasn’t even possible before. But that’s really just the beginning of the product planning and development process. Product engineers aren’t trained to closely match customer needs with the specific features required to turn this whiz-bang new technology into a product with broad market acceptance. Often they think it’s easy – you just go ask the customer what he wants! But it’s funny; customers often don’t tell you the truth and sometimes they outright lie. Quite often with respect to breakthrough technologies in particular, they don’t even know what they really want! And even if they tell you the truth, it’s important to make sure that what these specific customers are telling you is representative of your entire target market segment. This is a task that looks intellectually easy on the surface, but for a lot of reasons I won’t expound on here, it’s very difficult to get right.
Sometimes companies do get it right even without an experienced, professional marketing function in place. Let’s assume for a moment that they do. There’s still a very long way to go before those purchase orders start pouring in. The product must be positioned properly relative to the direct and indirect competition in the market. It needs to be priced so that the market is willing to take a close look, but not so high or low that it retards the product’s long-term profit potential. Will it be distributed only through the company’s direct sales force, or should we court VARs, distributors, retailers or OEMs? What kind of discount structure can we offer those partners without creating gray markets or channel conflicts? And please, let’s not forget about creating a bit of demand for those poor guys and gals in the sales force. Cold calling really does suck! It’s not good for anyone: the sales reps or the company’s profitability – if cold-calling is dominating the majority of the sales forces’s time. It will also “burn out” your sales force in no time, which can lead to excessive turnover.
Marketing programs that generate hot leads, or even complete sales, are much more cost-effective than relying on highly paid (but often beleaguered) sales reps to do their own inefficient “door to door” marketing. And how should we generate those leads? Should it be via PR, Advertising, Direct Marketing, Partnering, Search Engine Optimization, Paid Search Engine Ads, Trade Shows? The Marketing folks should be the strategic quarterbacks of the organization who should be driving the answers to these questions—as well as executing the strategy within the required budgetary and other resource parameters.
A VP-SALES & marketing MIGHT WORK—BUT DON’T BET ON IT
So does “BIG S, little m” NEVER work? Well, in some cases it not only works, it is even appropriate. Take the example of a semiconductor company selling a very niche chip to a vertical segment. They might have only 50 potential customers. In this case you REALLY CAN often just go ask the customer what he wants, and easily ask enough of them that you will end up building products that will apply to your entire target segment. With respect to lead generation, the target market is so small that traditional outbound marketing programs don’t make sense anyway, and that “door to door” marketing by your sales force might work just fine.
But I propose to you that this example scenario is the classic “exception that proves the rule”. In many, if not most cases, “BIG S, little m” will lead to failure – or at the very least sub-optimal performance.
One final thought; I’m not at all against a “true” Senior VP-Sales & Marketing–someone who is very good at both functions–and will be given adequate resources in both departments. But in reality it’s hard to find folks that are really good at either. Those who are very good at both are truly scarce. If you can find someone that excels at both functions, you do get an added bonus in the ability to seamlessly optimize the integration of sales and marketing functions. The trick is that this individual needs to have real competence in both areas–and just as important–be able to function as a fair arbiter between them without the perception of favoritism toward either department.
That’s my view—as always I’m very interested in hearing yours–post a comment below!
The post BIG S, little m – Is your VP-Sales & Marketing Failing? appeared first on the Morettini on Management Blog.
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