First Things First: Sales and Marketing Basics

The Relationship Between Sales and Marketing

Like two peas in a pod, these two have always been together. Ever wonder why?

MOST ENTREPRENEURS HAVE a common sense idea of what sales and marketing are all about, and what makes selling different from marketing. Marketing opens the gate between customers and the products or services they want; sales ensures that the buying happens. So rather than discuss the obvious differences between sales and marketing, let's focus first on the real question: how sales and marketing are connected and how, without one, the other would probably fail.

Sales and marketing are two segments of business that work hand in hand. Marketers identify customer needs, help open ways for the company to sell something to meet those needs, and try to ensure customers come back for more. If a consumer only hears about a product or service for the first time when someone is trying to sell it, the odds of a purchase go down.

So as an entrepreneur, you most likely will be spending money on marketing before you spend on sales. This is no doubt where the saying, "You have to spend money to make money" comes from.

Organizations of all sizes have to deal with this dilemma every day, because marketing is not only about introducing the product to the consumer. It's also about the prior processes of developing a brand, conducting market research to support product development, alpha and beta testing, and holding trials. The costs for these activities are incurred by all businesses. So remember, when creating your marketing plan, to budget for all appropriate marketing expenses. Then you can think about budgeting for sales.

Sales can be handled in many ways. Some companies choose direct selling. This is when the company sells its products or services directly to customers through salespeople, electronic stores (websites), or storefronts. Other companies partner with intermediaries, both nationally and internationally, who take charge of selling on their behalf. These intermediaries are commonly called distributors, wholesalers, representatives (sales reps) or brokers. Regardless of the way a business decides to sell its product or service, the sales force counts on the marketing of that product to facilitate brand awareness, brand recognition, and trust. If the marketing is executed correctly, a much better sales conversion rate should develop.

As a result, if the sales of a product or a service go well, the business will earn more and be able to fund a larger marketing budget, refueling the next cycle of the entire process.

Some companies see sales as a late stage in the overall marketing process, and the sales team may be part of Marketing. Others see marketing as supporting sales, with the schema inverted. The truth is that both models can generate excellent business, provided the two functions coordinate well. Needless to say, in a small company, sales and marketing may be done by a single person. But it helps a lot to clearly see which function is in play at the moment, so your goals are crystal clear.

Sales and Marketing: The Winning Team

While closely related, they are not the same. Nevertheless, never leave home without both.

SALES AND MARKETING are close to the heart of a business. Through marketing you can get clear indicators of your target market; with these, projections and marketing leads can be established. Through sales you can translate your product or service into income. Sales needs marketing to get customers; marketing needs sales to fund its operations and help move your company to the next level. You need both, functioning smoothly together, to ensure growth.

Marketing activities target many people, whereas selling deals with target buyers — individuals and groups clustered around some common factors. Without effective marketing, nobody will know what you offer. Without effective selling, your business has low prospects of surviving and growing. So the two functions are complementary and have equal, important value.

Marketing means all activities that are undertaken with the aim of reaching out and convincing the prospect to buy. Sales processes often involve activities to ensure that a customer buys a product, signs a contract or an agreement, or exchanges something of value for your offering.

The marketing process can vary a lot. It mainly consists of the following:

• Spotting unmet needs, a gap in the market, a new market sector where some opportunities for new offerings may lie

• Finding out the kind of product or service that will serve the needs of your potential customers

• Developing the product or service

• Ensuring that it has the attributes which meet the need of the customer

• Determining a fair price, effective name, appealing packaging and branding, and compelling proposition for the product or the service

• Making the product known to the customer

• Communicating why the customer ought to buy it (vs. the competition, or to solve a need or problem)

• Ensuring customers remain loyal, often by asking them for new concepts or enhancements on existing products, streamlining processes (think of rental cars), or building a community of users — but also...