Sunday, June 12, 2011

Sales and evolution of Marketing for IT friends

Sales and Evolution of Marketing (For my IT Friends)

The concept of buying funnel is used to provide demarcations between sales and marketing process. Sales and marketing are two important and correlated aspects of any business process but if you have worked in real world, you can easily say that these two departments are always in loggerheads with each other and we’ll try to understand the reasons behind this little war between them but the hardcore reality is that both sales and marketing are so extensively dependent on each other that one cannot survive without other.
The buying funnel clearly depicts the role of each department. In fact, I would say that marketing evolves out of sophistication of sales department so the most primitive department you will find in any organization is the sales department and to relief salesperson from some of its roles, marketing department came into picture. However in recent years, role of marketing has been raised from support function to direct measurable functions. It is because of the same reason that now each organization is emphasizing more on the terms such as ROM (Return on Marketing expenses). The second most important reason for rapid development in marketing is due to brand awareness and significance of brands in customer’s life. Brand has become a part of our lives and we adore them. Creation of brands and amply its value has become chief objectives of marketing.
 The third important reason is the significance of market research in overall development of any business plan. It is now implicit everywhere  that it is easy to sell Amul butter than XYZ butter because of better awareness and trust in brand. This very effect has somehow diminishes the importance of sales person from being frontier people to carrier of organization’s message.
There’s a conventional view that Marketing should take responsibility for the first  four steps of the typical buying funnel—customer awareness, brand awareness, brand consideration, and brand preference. (The funnel reflects  the ways in which Marketing and Sales influence customers’ purchasing decisions.) Marketing builds brand preference, creates a marketing plan, and generates leads for sales before handing off execution and follow-up tasks to Sales. This division of labor keeps Marketing focused on strategic activities and prevents the group from intruding in individual sales opportunities. But if things do not go well, the blame game begins. Sales criticizes the plan for the brand, and Marketing accuses Sales of not working hard enough or smart enough. The sales group is responsible for the last four steps of the funnel—purchase intention, purchase, customer loyalty, and customer advocacy. Sales usually develops its own funnel for the selling tasks that happen during the first two steps. (These include prospecting, Defining needs, preparing and presenting proposals, negotiating contracts, and implementing the sale.) Apart from some lead generation in the prospecting stage, Marketing all too often plays no role in these tasks.
Conflicts between Sales and Marketing     
The major source of friction is economical. Sales and Marketing budget is common in most of the companies and the way in which budget is spent is always controversial. Marketing team wants to spend more money into 4ps of marketing (Price, Place, Product and Promotions) while sales team is keener to spend the budget on incentives and hiring new sales people and thus increasing its penetration. In fact in my opinion, the major difference lies in thinking and attitude. Sales person is usually myopic in nature; his only motive is to build the relationship, close the deal and earn incentives. A marketing guy on the other hand is dandier towards long term prospects of product and creating a brand. He is more analytical in his approach and thinks about long term prospects.
Possible Solutions
1. The first and foremost is to create separate budgets for each department. No matter how easy it may sound, but it is really a difficult and complex task.
2. Increase in interactions between sales and marketing teams. In common scenario, both are unaware of hard realities of each other.
3. Spilt of marketing team into two teams- one work closely with sales person and other work closely on the growth of market.
4. Separate independent metrics or KPI to measure marketing team performance.
Sales and Marketing define the future of any organization and therefore cordial and responsive relationship between them is the key to success of organization.
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