Business Owners Toolbox Blog Discussions and articles to help the small business owner solve the challenges they face as they grow their business.

September 24, 2009

Marketing vs. Selling

Filed under: Marketing — Tags: , , — Mike Van Horn @ 4:22 pm

Q. What’s the difference between marketing and selling? I often hear these words used interchangeably.
(Asked during Business Group meeting)

A. Marketing and sales are often confused because “sales person” is seen as much less prestigious than “marketing associate,” so everything gets lumped into marketing.
Marketing is everything you do to prepare for sales. Selling is closing sales that make you money. Thus, you could say . . .
— Marketing is money OUT the door.
— Selling is money IN the door.
For small business owners, marketing is usually time intensive. We spend at least as many hours as we do dollars on marketing.
People who are good at marketing are often not good at selling and vice versa. These take different personalities and mindsets. Seldom will you find one person who is good at both. That goes for us entrepreneurs as well. We’re usually much better at one than the other, but we are forced into both roles, one of which we do poorly.

WHAT’S INCLUDED IN MARKETING? Remember, marketing is everything that leads up to selling. Here are some marketing activities:
– Handling incoming inquiries
– Asking your current customers for referrals for more business
– Networking and building relationships
– Advertising and public relations. Direct mail and e-newsletters
– Special promotional events
– Merchandising and merchandise selection
– Holding sales, offering preferred customer bonuses
– Getting articles published. Blogging
– Doing cold calls to set appointments
– Market research, customer surveys
– Branding, creating your sales message
– Design and creation of collateral materials
– Building and maintaining your web site, blog, Facebook page, Twitter
– Market planning and strategizing

Marketing includes doing good work so that your customers come back, and tell others about you. It includes hiring employees who are good at customer service, and giving them the training so that they can keep your customers happy.

Marketing includes pricing–finding the price level that will attract the customers you most want to do business with (and will make you a profit).

Marketing includes product design and development and packaging.

All these things lead up to selling.

. . . presenting, answering questions, making suggestions, doing proposals or estimates, addressing concerns, negotiating. And most important, asking for the sale. Then completing the sales agreement, etc.

Your sales people clearly do some marketing. Networking, responding to inquiries, making public presentations, doing cold calling, calling old customers. The marketing that sales people do best is just one or two steps away from selling.

Selling is harder than marketing, and this is why good sales people get paid a lot of money. As business owner, your aim should be that your sales people get filthy rich, because in the process, they make you even richer.

Because selling is hard for many people (including sales people), those who are hired to do both often spend too much time on marketing activities and not enough on selling. (This goes for us as business owners as well.)

Salespeople are motivated by performance incentives, aka commissions. In my experience, sales people on an hourly rate or salary are less effective. If there’s a mix between salary and commission, it should be weighted toward the latter. Their performance is very easy to measure: signed orders, cash in the door. Not hours worked, nor contacts made, but sales closed.

The marketing and selling funnel. This funnel shows the different stages of marketing as it proceeds toward a sale. It’s wide at the top and narrow at the bottom. This represents that your marketing must reach a lot of people in order to make a few sales.

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  1. Mike, I had a couple of questions:

    1. How do you tell if you have a marketing or sales problem? Or, how do you tell if you should invest more in marketing or more in sales?

    2. Do you have any guidelines on how to balance the time and money you should spend on both kinds of activities?

    3. You say “Selling is harder than marketing and this is why good sales people get paid a lot of money” but many jobs are hard. Isn’t a more a function of the impact of the function on your business and what the labor market is for the position?

    Very thought provoking post.

    Comment by Sean Murphy — October 1, 2009 @ 11:32 am

  2. Great questions, Sean!

    These are worthy of a separate post, so I’ll answer 1 and 2 that way. For #3, I’ll elaborate on what I said above:
    When I say sales is “hard” I mean psychologically hard. Many small business owners, including me, have hired someone to help with marketing and sales, and the person we hire ends up doing a lot more marketing than selling. And it’s true for the owners as well. I would much rather write articles or design flyers or go to networking meetings than actually call prospects about doing business with me!
    Those who actually enjoy selling and are good at it are rare, and thus command high pay. But even these folks face daily resistance.
    Thus the owner must assume the sales manager role: give guidance and training, set goals and targets, insist that activity and results are tracked and reported on, hold sales people accountable for target results, and continually do debriefing and coaching.
    Sales management is tough for us owners. I’ve had many clients who hire a sales rep and give them a monthly draw to get them started. Six months later the rep is still not earning enough commissions to replace the draw! But the owner keeps the rep on even so. “Well, he’s improving. Times have been tough. If he’s not out there selling, then I have to do it all.” Etc. We end up excusing and subsidizing poor performance.

    That’s why one of my cardinal rules is, “Hire slow and fire fast.” Make sure you hire the right person for the job, and if they don’t work out, replace them.

    Comment by mvh — October 1, 2009 @ 12:20 pm

  3. I am trying to help my team with a marketing approach that is well thought out. We have systems for our process of financial planning for people, but our marketing systems are not focused on a target market.

    Comment by Becky Nommensen — August 21, 2011 @ 9:38 am

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