Sales and Marketing

We define the difference between Sales and Marketing as follows: Marketing generates leads, Sales converts the leads to sales. Both of these functions are required in any organization. Your company must generate leads. It could be for the purpose of generating relationships for negotiated work or it may be merely identifying bid opportunities. Once you have leads, you must convert them to sales. This can involve pricing (or the estimating function), relationships, and numerous other functions.  No Sales and Marketing plan can be effective without incorporating pricing schemes. Every job incorporates three components—the cost of the job, the job’s contribution to profit and the job’s contribution to overhead. Since the company’s overhead is fixed, sales above the break even do not require a contribution to overhead. With effective sales projections and control of the break even, the company can know how much and how often it can “sharpen the pencil.” Market penetration can be generating while maintaining pre-determined profit levels. There must be a sales plan designed to “win” the game. Here it is left to chance.

An effective Sales and Marketing plan is an extension of the Strategic Plan. First you must identify your company’s Unique Selling Proposal—why people should buy from you instead of your competitor. Then you must identify your targeted market and determine how you are going to get your message to them. The business requires a certain level of sales in order for the business to generate the results that the owner needs.  Your sales management is then the accomplishment of that result.

The sales functions consist of lead generation (marketing), lead qualification, relationship building and closing. A lower level of employee than the person required to qualify the leads can do lead generation. A lower level of employee than the person who builds the relationship or closes can qualify leads.  The sales function has numerous components but basically there are four–lead generation, lead qualification, technical knowledge and closing. Each function requires a different level of expertise. In most companies they hire a high paid person who is capable of performing each function. This results in a significant lack of productivity and creates a very undesirable situation in which the sales person can hold you hostage. Lead generation is a low-paid position—it should not be performed by you high-priced person. Lead qualification is only slightly more involved. An effective sales structure takes your strong closers (who are highly paid) and puts them in front of as many qualified leads per day as possible. It also relieves them of the burden of having complete technical knowledge since the technocrats in the organization supplement them. With this type of sales structure, The owner bonds to the company rather than a sales person, which is a much “healthier” result.