Should Marketers Make Joint Calls With Sales People?

 

Sales personnel, along with management, are the prime bearers of the burden of contributing to profit by producing revenue.”

Bearden, Ingram, LaForge (2001)

Recently a distribution company in my native Caribbean Nations engaged me to educate (we prefer to educate people and let them train themselves) their sales people in contemporary selling strategies. They were not meeting numbers and thought the answer was in getting a really sharp sales force.

During the opening exercises I noticed the absence of people from their marketing department. At the break I asked why, and the short answer was they don’t need to attend sales training because they don’t sell anything. They create advertisements, plan events and so on, but they don’t sell. That’s not their job.

While they were not exactly at war, you would not be surprised to learn that their Marketing and Sales were two silos. They had never been on a sales call together. Of course they had the benefit of much market research etc., but Marketing never sat in front of a large prospect who was either indifferent or hostile to their company and its product or service offerings.

Having heard that, I couldn’t help wondering about the effectiveness of their marketing and what value they really created for the sales team and the organisation as a whole. Did they really know to, “mix the marketing mix?” And how could they estimate the importance and quality of relationships and other soft factors in the buying process for their company? Did they really know which way to go?

In that brief interlude I had few answers. But there was one question that lingered: “Should it be mandatory for marketing people to have at least basic sales training and make period sales calls with front-line sales people?” What is your experience?

Written by: Herman D. Alvaranga, founder of the Caribbean School of Sales Management where we solve the toughest marketing and sales problems.

So What is Marketing Strategy?

Recently I was having a conversation in a social setting with the Marketing Communications Manager for a large firm by Jamaican standards. As our discussion

Source: So What is Marketing Strategy?

So What is Marketing Strategy?

“At its simplest, strategy means knowing where you want to go and deciding upon how best to get there.”

Wilson and Gilligan (2008)

Recently I was having a conversation in a social setting with the Marketing Communications Manager for a large firm by Jamaican standards. As our discussion progressed it became clear that this charming young lady needed help; for whereas she has a history of facilitating promotional events such as the one where we met, and creating newspaper advertisements and so on, she has no coherent strategy.

A little probing revealed that she was not working from a strategic marketing plan, and her objective as the firm’s chief marketer is achieving a high level brand awareness. Needless to say her firm was already a household name in Jamaica but, lacking in customer-based brand equity, was a distant second in the market.

Not wanting to monopolise her time I moved on, but couldn’t help remembering the first hour of my Marketing Strategy and Product Policy course where the discussion always focuses on, “What is Marketing Strategy?”

So What is Marketing Strategy?

As my favourite marketing strategists, Richard M. S. Wilson and Colin Gilligan (will someone please second that motion?) put it, “At its simplest, strategy means knowing where you want to go and deciding upon how best to get there. Strategic marketing can therefore be distilled down to the marketing planner deciding – with complete clarity – in which markets does the company want, or is able to compete, and exactly how it will do this.” They go on to speak of four key dimensions of marketing strategy as follows:

Four Key Dimensions of Marketing Strategy

1. Being close to the market
2. Developing valid assumptions about environmental trends and market behaviour
3. Exploiting the competencies of the organisation
4. Developing a realistic basis for gaining and sustaining a competitive
   advantage.

Good luck my new friend. You’ve got a mountain to climb and will need both a map and a guide, for marketing communications alone cannot solve your problem. Should I call her for an appointment?

Herman D. Alvaranga solves the toughest marketing and sales problems for Caribbean businesses.

Six Pillars of Services Branding

Brands are even more important for services than for goods since consumers have no tangible attributes to assess the brand. A service brand therefore has to be based on a clear competitive position which must be communicated and understood by staff who are capable of delivering the brand promise.

Brand managers in the services sector in particular would do well to
consider Conrad Free (1996) who suggested that their brand strategy
must reflect a true competitive advantage, encompassing the following
factors:

1. High quality top management: The commitment of top management is
   fundamental to guarantee excellent service brand delivery
2. Vision: Everyone needs to understand and be committed to the
   brand vision.
3. Results driven: Vision should be translated into clearly defined
   goals for all staff
4. Competitiveness: The company should benchmark its performance
   against best practices both inside and outside the sector
5. Use of technology: This is a fundamental source of sustainable
   competitive advantage
6. Consumer focus: The customer needs to be regarded as central to everything the organisation does.

Not a bad list. My only disagreement is that in the 20 years since Free’s comments technology has become less and less of a competitive advantage because of falling costs. Otherwise I think he was spot on. Do you?

Herman D. Alvaranga is president of the Caribbean School of Sales Management

3 Steps to Choosing Good Competitors

“A horse never runs so fast as when he has other horses to catch up with and outpace.”
Ovid, The Art of Love, AD8

Recently someone who wanted to start a consultancy in a particular discipline and came to me for advise on competitive strategy. I reminded her that when a company chooses to enter a market it also chooses its competitors. She wasn’t sure who her competitors were. In fact she knew very little about them, but she wanted to be a market leader in short order.

“When a company chooses to enter a market it also chooses its competitors.”
Hooley, Piercy, Nicouland (2012)

It is axiomatic that you choose your competitors wisely. Here are three of the steps to choosing good competitors that we discussed. And I’m sure you will allow me to state that in framing my discussion I was influenced by some of my favourite marketers who are cited below.

1. Identify whom to benchmark against

• How long it take you to become an overnight success?
• Why are your competitors successful? What are their strengths? What practices can you copy and improve?
• If marketing resources such as brand reputation, relationships with customers and competitive positioning are really the foundation of differentiation, where do you stand?
• Why are some competitors not successful? What are their weaknesses? How can you avoid and overcome the pitfalls?

2. Look for competitive maturity

• The competitively mature company understands the market it is operating in and enhances, rather than destabilises, the environment.
• The good competitor can help promote the industry’s stability by understanding the rules governing the market and by holding realistic assumptions about the industry and its own relative position.
• Good competitors are unlikely to engage in aggressive price competition that can be a zero-sum game. Instead they
• Good competitors are unlikely to engage in aggressive price competition that can be a zero-sum game. Instead they would rather expand the market.

3. Know the goals of your competitors

• What are the time horizons of your competitors?
• Are they pursuing normal profits, or are they seeking to make a killing in the short term and exit when things get tough?
• Are you entering an industry where both entry and exit barriers are low? If so beware!

Good luck my young friend. If you transfer the brilliance you displayed as a student to your business, you’ll be a millionaire soon.

Herman D. Alvaranga is a marketing and sales strategist and founder of the Caribbean School of Sales Management.

References: Marketing Strategy and Competitive Positioning, Hooley, Piercy, Nicoulaud (2012), Marketing Management and Strategy, Doyle and Stern (2006)

False Advertising Leading to Divorce Courts?

“Advertising claims are considered to be unethical if they are false, misleading, or deceptive.”

Wells, Moriarty, Burnett (2006)

Favourite Person is going to divorce Courts because she does not put up with deception. No. Wasn’t me. I’m a really good JewMaican these days, and Yom Kippur is just days away. Didn’t no nothing wrong. Not this time. I swear I’m innocent. Ok. Here’s the real truth. Come to think of it, is there an untruth at the heart of the real truth?

Unethical advertising?

It appears that the largest furniture retailer in the Caribbean has a misleading ad on FB. If you click on pictures of some advertised products what you see are not what you get. Not exactly what you would expect from a company established in England in 1850 and who has 400 stores in 18 countries. But Favourite Person says this has happened once too often and this time she is headed to Courts for a divorce. Piece of mind quietly delivered. Connection severed.

Keeping the romance going

Now, every cockroach knows that them don’t business in fowl fight. Similarly this marketer knows how to hold him corner. But, seriously, sometimes advertisers need to be reminded of the Russian proverb, “trust, but verify.” For whereas they would never countenance anything that is unethical, their associates, including staff and service providers, can make errors in judgment that have unintended consequences. The devil is in the details, and keeping the romance going is better than divorce by a long-standing, profitable customer. Who was it that said that it costs up to 20 times as much to gain a new customer as it does to retain an existing one? True, or false? What is your experience?

Finally, somehow I think that quick remedial action by the offending party could prevent divorce by Favourite Person and so many others on FB who, thinking this is unethical advertising, may be heading to divorce Courts.

Herman D. Alvaranga is a marketing and sales strategist and founder of the Caribbean School of Sales Management.

I Wasted My Money With That Trainer

” Clearly they did not know us and what we needed. Mostly old stuff about selling yourself, unique selling points, making a pitch, handling objections, and closing techniques from the age of the dinosaur.”

Recently I sat with the HR director for a major firm (by Caribbean standards) in the distribution sector. He was deeply concerned because the majority of his business development people were not meeting their numbers even though he had “invested” in extensive sales training last year. He knows he has good people so; did he choose the wrong sales trainer?

He had received a well-written proposal from someone who was employed in the sector until recently and who was at one time manager for a small sales team. Naturally Trainer had an MBA in finance from a recognised university, spoke very well, appeared eminently qualified, and, the price point being competitive, they received the nod.

A gap in communication?

As the conversation developed I noted that the majority of the business development officers were graduates of the University of Technology Jamaica (Caribbean’s proud answer to MIT) with a BBA in marketing. To my certain knowledge this is a rigorous programme with a heavy focus on consumer and business buying behaviour. Further, they all took a comprehensive course in sales, had a keen understanding of the Manning and Reece text (Selling Today) on the subject and did not need a conventional sales trainer. To this particular audience the selling era ended a long time ago, and what they needed was a new strategy to be effective in the era of the enlightened buyer and what Kotler and Keller describe as the holistic marketing concept. Not getting that from the sales trainer, many tuned him out and went to their smartphones. One of the sales reps put it bluntly, “Clearly they did not know us and what we needed. Mostly old stuff about selling yourself, unique selling points, making a pitch, handling objections, and closing techniques from the age of the dinosaur.”

What the firm really needed

As the discussion progressed it turned out that they really needed three things:

1. A strategic marketing plan (which their marketing manager did not know how to construct) which if properly implemented would pull the target customers into the channel to demand their products.
2. A comprehensive sales plan that, picking up where the macro-marketing left off, would serve as their road map for the revenue generation process.
3. This being a B2B sales team they needed to be capable of discussing small business management with owners/managers rather than persuading them to stock products that would be too difficult to resell with implications for stock-turns, cash flows etc.

Net result of this sales training? A very disappointed HR Director who paid good money and got what he was persuaded by a sales trainer to buy: not what he really needed.

Watch out sales trainers (and every other service provider for that matter) for where there is little perceived value, there can be serious reputational damage.

Herman D. Alvaranga is founder of the Caribbean School of Sales Management. We improve the competitiveness of Caribbean businesses through world-class, contextual marketing and sales education and consulting services.

3 Steps To Getting Your Marketing Budget Approved

“The purpose of marketing is to contribute to maximising shareholder value and marketing strategies must be evaluated in terms of how much value they create for investors.”

-Peter Doyle (2008)

Recently the new CEO of a well-established but small company showed me his marketing budget and asked if he would get it approved. His background is finance and ICT, and his sales and marketing manager, also new, was a successful elsewhere salesperson with no formal training but some tactical experience in marketing. What they presented was a list of proposed activities and a request for approval of “a sum certain in money,” to finance these activities. There wasn’t even a hint of marketing strategy or a return on investment. It was never going to be approved as presented, I thought, but they did have some good tactical ideas.

Marketing and Value Creation

As Hooley et al (2012) put it, “Marketing is a process of value creation and delivery to customers that transcends traditional departmental boundaries .” Shrewd marketers know that their first constituency is the internal customer, so here are the three things that they do to get their budgets approved on time, every time:

1. Start with the CEO. What is his/her dream?

• What business do we want to be in 3-5 years from now?
• What should the brand footprint be in 3-5 years time?
• What would make our shareholders happy?

2. Your next discussion is with the CFO. What would make him/her look good?

• What would you like our Balance Sheet look like 3-5 years from now?
• What would you like our projected Income Statement to be 3-5 years from now
• What ratios would put us way above industry average?

3. Armed with the above, the next step is to create a marketing plan that is a roadmap for giving the CEO and CFO what they want, and your target customers more than they had expected.

The Marketer’s Secret

• What’s in it for the marketer, you may ask. I’ll share the marketer’s secret with you; but be sure to keep it strictly confidential: We work for more than achieving the quantitative and qualitative objectives. The journey is our real reward! And so our fun comes from the marketing thinking, followed by the planning process, constructing the strategic and tactical plans, presenting them as an investment that the CEO and CFO will find attractive, and then executing the plans to the benefit of all.
• Slick? Not really, for it is much easier said than done. Indeed, as McDonald (2007) speaking of marketing planning reminds, “The problem is that, while as a process it is intellectually simple to understand, in practice it is the most difficult of all marketing tasks.”
• So back to the case of my young friends. Obviously what’s needed here is not about bunting, banners, advertisements, social media and the related expenses. These are all important elements in the communications mix; but they are not the strategy to take the business where it needs to go, and so his Board is unlikely give the stamp of approval.

Good luck, my young friends. You were smart enough to seek advice early in the process. Now, how would you advise them: should they attempt to create their marketing plan on their own, with no additional expenditure; or should they seek professional assistance which comes at a cost?

Herman D. Alvaranga is president of the Caribbean School of Sales Management. Shrewd managers call him (876-527-3001) instead of looking outside the region for world-class sales and marketing consulting and sales force transformation.

Are celebrity brand ambassadors too risky for your business?

Older consumers are not as likely to be influenced by celebrity endorsements.
Clow and Baack, (2007)

Celebrity endorsers, popularly known as brand ambassadors, have become, well…popular, in so many, many places. And why not? Nuff hype, big ups, media attention and usually a very big party to top it all off. But is it really a gamble by marketers who have blindsided the rest of the company as some people claim?

A Current Jamaican Example

Let’s look at a current example here in my native Jamaica. Last week ATL Automotive, dealers for VW, Audi and Honda motor cars announced that singer and media personality Denyque, was its new brand ambassador.

“We’re very happy to have Denyque on board as our Volkswagen ambassador. She exhibits so much synergy with the VW brand: effervescence, spunk and major cool factor. We thought it was match made in heaven,” said ATL Automotive’s group general manager.

This marketer has had 6 Hondas, thinks the VW brand is perhaps the best motor car value anywhere, and as a youngster was fascinated by DKW (derived from Dampf-Kraft-Wagen) and NSU, two of the forbears of the present Audi brand. Fond, but fading memories of the NSU Spider from the 1960s linger; but never mind for the Audi TT would fit nicely into my garage!

Why engage brand ambassadors?

But back to our brand ambassador story. Why do marketers engage them? Let’s hear what Clow and Baack, (2007) have to say. “A celebrity endorser is used because his or her stamp of approval on a product can enhance the product’s brand equity. Celebrities also help create emotional bonds with the products. This bond transfer often is more profound for younger consumers. Older consumers are not as likely to be influenced by celebrity endorsements.” So who is VW/Audi targeting? And how many young Jamaicans have money to spend on these premium/luxury brands in this time of extreme austerity? But why ask? For I’m sure they’ve got that all sorted out.

Potential Dangers

Shrewd marketers, however, never forget that there are several potential dangers in using celebrity endorsers. Among them are inappropriate conduct. Who can forget Tiger Woods and how many global brands dropped him in an instant, almost? And here in Jamaica some of our best-known advertisers have dumped their brand ambassadors drawn from the popular culture very quickly for the same reason. Further, the matter of credibility remains an issue, for we all know that brand ambassadors are paid to promote the brand.

But perhaps the biggest potential danger may be self-inflicted; for too often marketers engage brand ambassadors without carefully developing financial and marketing objectives, measures of success and the requisite internal marketing. Bottom line? Brand awareness is never the objective of a campaign/promotion when your brand is already well-known. Neither is the excuse that you can’t measure the effect of marketing campaigns/activities acceptable. Worse, the buying cycle for such a major purchase as a motor car may be very long, with little immediate financial impact. Sales may be dismayed by the resulting numbers, and Finance may well ask, “Did we waste our money on that brand ambassador?”

Good luck ATL Automotive! This marketer is always wary about the real value created by brand ambassadors, but that little Audi… now where is the car fairy when I need you?

Herman D. Alvaranga is president of the Caribbean School of Sales Management. Shrewd managers call him instead of looking outside the region for world-class sales and marketing consulting and sales force transformation.

What do your sales effectiveness drivers say about your sales organisation?

I was busy and skipped my usual Sunday post; but in response to those special people who contacted me today I’m submitting this, my final in the five-part series on the dimensions and drivers of a winning sales organisation. Today’s discussion is on the subject of sales effectiveness drivers-a subject of much debate.

As Zoltners et al put it, sales effectiveness drivers are about the decisions, processes, systems and programmes that sales leaders are responsible for.

Popular sales effectiveness drivers

So what are perceived to be the main drivers of sales effectiveness? Here’s their list of the most common. Did you think of all of them, or do have something to add to the following?

• Sales strategy (market segmentation, value proposition and selling process)
• Sales force size
• Sales force structure and roles
• Sales territory design
• Recruiting
• Learning and development
• Culture
• The sales management team
• Leveraging information
• Compensation and incentives
• Goal setting and forecasting
• Performance management

Theory X and Theory Y

One size fits one, and we can never be sure exactly what’s on the minds of our salespeople. Do we really know what precisely what they want, and what will motivate them? Should we even consider McGregor’s motivational Theory X which essentially assumes that people work only for money and security? Or how about his Theory Y which, if implemented, could result in a high level of motivation as employees work to satisfy their higher-level personal needs through their jobs. Or is it a combination of both? And are these models still useful nearly 60 years later?

Culture, motivation, and productivity in two competing firms

While I have no scientific basis for making definitive conclusions, in my travels I have noticed that too many managers have taken the position that the key to sales force productivity is compensation. If they pay their sales teams high rates of commissions that’s it. They can now demand blood! Which brings to mind two direct competitors that supply a range of edible products to hotels, restaurants and the retail trade. Both are very aggressive. But one has a Market culture-a focus on competition, achievement and “getting the job done.” And they have one strict rule for their salespeople. Your week-ends are for you and your family. They work hard and play hard, and while not earning top dollar, morale is relatively high.

The other has a rigid hierarchical culture. They are highly structured and controlled. Fear of making an error is never too far away. Nobody breaks the rules. Further, the sales force is required to work six days per week to ensure that their customers are never out of product. As for the delivery crew! They all hate it; but the money is good.

But there’s another side to the story. Although they employ different sales effectiveness drivers they are the leaders in their industry, but one by a wide margin. Now, can you guess which of the two sales forces has higher productivity and which company has higher profitability? And can you guess which has the better corporate image?

Herman D. Alvaranga is president of the Caribbean School of Sales Management. Shrewd managers call him instead of looking outside the region for world-class sales and marketing consulting and sales force transformation.