A Winning Combination: Sales and Marketing

The great divide between sales and marketing has been exacerbated by the recession, and the marketing camp seems to be losing the good fight.

“What’s happened is marketing is (that it’s) not standing up too well to the harder times and there are a lot of marketing people out there just looking for opportunity,” says Neil Rackham, author and creator of ‘SPIN Selling’.

Companies, he adds, are shedding marketers over sales people. “In the US at the moment, it’s not just junior marketing people who are going. The tenure of the Chief Marketing Officer is something like 16 months at the moment on average. So there’s a lot a turnover of marketing people.”

“And also there’s a great oversupply of marketing people. In the United States, there are 1,400 graduate-level marketing programmes in universities and business schools, (whereas) there are 40 sales programmes.”

How did the competition become so cut-throat? Rackham even admits to this as being “bizarre” in view of the fact that sales and marketing are two of the main revenue generators for any company. “You’d expect they’d work fairly closely together.”

Curious about the disconnect, Rackham and co-authors Philip Kotler and Suj Krishnaswamy, conducted a study to identify best practices that could help enhance the joint performance and overall contributions of these two functions.  

Their findings were published in the article ‘Ending the War between Sales and Marketing’, in the Harvard Business Review. The article talked about the strains between sales and marketing falling into two main categories: economic and cultural, with an emphasis on the latter.

Rackham says this happens because sales and marketing are entirely “different animals.” A marketing person is usually MBA-educated, therefore has formally learnt marketing tools and techniques. In contrast, a salesperson is what Rackham calls “a fairly seat-of-the-pants individual”, whose skills lie in working with individual customers; they’re not good with data and not analytical.

The economic tussle, he says, occurs when both parties are competing for the same budget, which can cause a greater rift. All too often, organisations find that they have a marketing function inside sales, and a sales function inside marketing.

Rackham believes, however, that sales and marketing need not be enemies but can co-exist.
“In that article, we were mostly concerned with getting a dialogue between sales and marketing.” Together with his co-authors, Rackham developed a diagnostic tool in the form of a questionnaire, to allow companies to assess the quality of the working relationship between sales and marketing and just how integrated they were within their companies.

Though that started a dialogue, it doesn’t solve the problem. The authors did however, net a noteworthy find. “I think the thing which is interesting is that selling is moving into two very distinct types of sales: the transactional sale, which tends to be very low cost, standard product, customers self-select, they don’t want sales people; and the consultative sale which is getting deeper and more complex and more sophisticated all the time.”

This could very well be the turning point for both factions once they can appreciate what the other can bring to the table, and where marketing no longer needs to be the underdog. Rackham explains: “In the transactional sale, the tools you need to drive the business largely come from marketing, great advertising, databases, good collateral, the things that marketing traditionally produces are what drive the transactional sale.” Yet very often, the transactional sale comes under sales and therein lies the uneasiness.

In consultative sales, where “there’s an awful lot of customisation”, Rackham says marketing’s role is to provide the tools to enable salespeople to create the most customer value.

He singles out General Electric as a company which has embraced both the sales and marketing departments. “They’ve worked on integrating sales and marketing in a sort of Six Sigma process of selecting which opportunities they’re going to go after. We’ll see more and more of that happening because the real skill today in selling lies very much in picking the winners, deciding which opportunities we’re going to do for, over-investing and focusing on them.”

Perhaps an enlightened future for some companies could include the creation of a new role: Chief Revenue Officer, thereby ridding the legacy labels of sales and marketing, and breaking down the long-held rivalries.

In fact, Rackham believes this to be not just plausible but entirely possible, because already, FedEx and Coca Cola Enterprises each already have a Chief Revenue Officer. “Companies like these are saying that we have to find new ways of combining sales and marketing. We ought to think more in terms of what competencies have we to generate profitable revenue and in what combination do we now use them. And I think that can be very successful if it’s entered into that way.”

Why entrepreneurs don’t make good salespeople Entrepreneurs often inundate their customers with their enthusiasm, which is usually seen as a positive thing, but this can backfire when it comes to
clinching a sale.

“In my experience, entrepreneurs can’t help themselves. When they get in front of a customer, they want to tell the customer the story,” says ‘SPIN Selling’ author Neil Rackham.

“(But) one of the things we know about selling, and we’ve known for nearly 40 years, is that the best selling isn’t at all about your products and what you’ are going to offer; it’s very much about the customer and their need. And entrepreneurs very often swamp the customer.”

In fact, research from the 1970s had already shown that, in a sales call, the more time the customer talks, the higher the probability that the call will succeed.

Rackham adds: “When you study highly effective salespeople, one thing you find is they talk about solutions, about what they could offer very late in the sales process. Less effective people can’t wait to start talking about what they can do.”

Entrepreneurs, by virtue of being zealous about their creation or product, are likely to also be impatient. They’ll interject and start talking about answers too quickly, and customers will miss the point entirely, because they don’t link the entrepreneur’s answers to their needs.

“So many entrepreneurs say, ‘We have this great thing, do you need it?’” But Rackham says customers start with what they need and then move to what fulfils that need; they don’t like starting with the product and trying to work backwards.

As such, Rackham feels “the fundamentals of selling are often best left to someone else.” “I don’t want to suggest that passion is a bad thing, (but) when it gets in the way of listening to the customer, focusing on the customers and the customer’s need; that’s when it hurts.”

That said, the entrepreneur can still have a role in sales. “The more complex the sale, the more the senior person in the organisation has to be there representing the organisation and what it can offer.”

[This article is republished courtesy of INSEAD Knowledge
http://knowledge.insead.edu, the portal to the latest business insights and views of The Business School of the World. Copyright INSEAD 2023]