James Bond got where he is today by being good looking, having an entourage, and playing with some really neat “toys.”
Unfortunately, in today's climate, businesses need more than fluff to stay ahead of the competition. This issue's dilemma reaches out to the spy in every on of you and requests your advice on getting the single best source for competitive data.
We also want to thank you for your wisdom about the previous dilemma: whether to spend your dollars and efforts on sales (the chicken) or branding (the egg). Read below to see your peers' best advice.
If being a spy or reading about chickens isn't enough help for your business, write to us and ask our SWOT Team about your own dilemma. Tapping into our collective experience, strength and hope really works. And you could win a copy of our book, A Marketer's Guide to e-Newsletter Publishing.
This Issue's Dilemma
Swot Category: External Opportunity
What is the single best source for competitive data?
Every marketer knows you can't plan and implement a full-blown marketing campaign without first verifying what your competitors are doing.
So, my question to you is: where do you get benchmarking information to fuel your campaigns? Do you call the competition and act like a prospect to get info about how they market their offering for the best return on their investment (number of leads)? Do you order reports from consultants? Do you contact your competition's customers? I know there are many valuable ways to get this information.
—Paul H., Project Manager
Previous Dilemma
SWOT Category: Internal strengths
Branding or sales: which comes first?
We are a profitable B2B product and services company with a strong cash reserve and would like to invest a portion of it in our future growth. Building an exceptional team of 88 professionals, who work well together and provide value to our customers, has brought us a great deal of joy. We now face one of the most important decisions we will make, since I started our company nine years ago.
I am apprehensive about a dilemma, which may be our undoing, if we are not careful. My VP of Sales and Marketing and our Marketing Consultant who has been an integral part of our team for 5 years, are squared off in a debate about how to invest our sales and marketing budget for next year.
My Sales VP wants to create new position and hire a Director of Sales and 5 additional sales people. We currently have 2 sales managers and 11 salespeople. My Marketing consultant wants us to invest in a marketing and advertising campaign to make our B2B brand stronger.
Our budget will allow us to do one or the other, but not both. I am not sure of the right decision to make.
I feel like I am in a “chicken or egg” scenario—which comes first: sales or branding? This whole dilemma is new to me and I am not even sure where to start.
Would you ask your readers how I can make the right decision? What questions should I ask?
—Jeffery C., CEO
Summary of Advice Received
Jeffery, several of your peers pondered the chicken and egg analogy: What comes first, sales or marketing? The results were split about half-and-half between chicken and egg lovers.
Given the potential gravity of the situation (if you make the wrong decision you could possibly lose your job), our best advice comes down to the following:
Because every organization is different, you must ask the right questions before you decide whether to use your budget on the sales solution, the branding/marketing solution or on a combination of the two. Then, clearly define your strategy and objectives before actually spending the dollars.
Thanks again, SWOT Team members, for your excellent advice which falls into the following five categories:
1. Ask questions before you decide.
2. Use your budget on a sales solution.
3. Use your budget on a branding solution.
4. Use your budget on a combination of both.
5. Define your strategy and objectives.
1. Ask questions before you decide.
It's clear from the responses we got that most marketers don't embark on a new marketing campaign without first doing their homework. We received several insightful responses, which recommend delving a little deeper into where your company is headed before deciding on a solution.
Ann Sheehy, Marketing & Communications Manager of Irish Estates, suggests gathering information to inform your decision:
Dear Jeffery, You cannot make a decision in relation to your dilemma without information—you will need the result of research to know which way to move. Is your brand image strong? Are your name and logo easily recognizable? How do your customers rate you? How do your competitors' customers rate you? How well are you known? What does your Marketing Consultant wish to achieve through a marketing and advertising campaign? How does he/she propose to measure its success? What will the Key Performance Indicators be? Ask your Sales Manager the same questions. Does he/she know markets exist that are currently going untapped due to lack of resources? If so, where are these markets? What size are they? Are they profitable? Are they accessible? Ask him/her to provide you with figures on his projected increases in revenue and the projected return on your investment over say the next five years.
Ralph Jean-Mary agrees that asking the right questions will enlighten you and your team as to whether the chicken or egg should come first. He recommends the following topics for debate before moving ahead:
1. Given the company's historical sales performance, what would an additional five sales people bring in gross sales and contribution margin? Do you know how many leads are currently in the pipeline that could be turned around more quickly if you had more sales people? Or would these five new employees find themselves sitting in the office with not much to do?
2. What is the projected ROI of the branding campaign? How many more leads will it bring in? Given your conversion rate of leads-to-actual customers, how many new customers do you see this campaign bringing over, let's say in a twelve-month period? What does this number mean in terms of gross sales and contribution margin? Even more importantly, if this projection does pan out, can your existing sales force handle the additional load?
3. How does the contribution margin compare for each program? This quantifiable factor should weight heavily on your decision and will probably dictate which way to go, if only from a financial standpoint.
4. Looking externally, what is your company's current market share? If you need to aggressively get more share of that market launch the advertising and marketing campaign and hold off on the sales team building for now. With such cash in hand, your company is a financially stable one. Hope this helps.
Tracy Young, Vice President of Marketing for Team Health, advises you to focus in on your current sales team:
How effective has your current sales staff been? What's the sales ROI? How much reach/penetration into your customer base does the current sales staff have? In other words, are there targets your current sales staff has been unable to reach? Are you sure your budget only allows you to do one or the other? Or can you divide the dollars? If you do that, try it for one year, making sure to track the results carefully, testing the ROI for both. Then you'll know how to allocate your dollars in future years. Good luck!
2. Use your budget on a sales solution.
Just for fun, let's say your sales team is made of, ahem, chickens, and your branding/marketing campaign defines your egg. About one fourth of the SWOT Team members cheered for the chickens (about the same amount that cheered on the egg). In their opinion, without sales, there would be no egg.
Dave Roberts, VP of Strategy and Marketing for Inkra Networks, is one SWOT member in favor of spending money on the chickens first:
My conclusion is: it depends highly on where your company is relative to its lifecycle and its competition within your market. Put another way, the answer to the question, ‘Which comes first: sales or branding?' is always sales. But you may already be past that point. If you're an extremely young company and perhaps not yet profitable, then your first priority has to be on sales. You're living on borrowed time until you can hit profitability, and get more cash in the door from investors.
However, you seem to be a more established company that is profitable and growing. Given this, I think it's safe to conclude you have already achieved some level of sales success. If that's the case, don't see yourself as choosing between sales and marketing. Instead, view the choice as whether you have reached the point in terms of sales where you really should be reinforcing your branding.
An anonymous SWOT Team member summed the chicken-side up very succinctly:
Since you are focused on B2B sales the best option is qualified person-to-person sales. Brand enhancement would result from the professional message and service people can provide. If you were a business-to-consumer organization, then brand building would be a different issue.
Heather Rose also recommends taking a good look at what your sales force is doing before handing everything over to marketing:
Marketing is about creating demand, and sales is about filling it. If you have more prospects and customers than sales people to fill those orders, then you need more sales people. However, if you are having a hard time getting prospects, then you need marketing to generate more sales prospects. I suggest your marketing people talk more with your sales people to find out what tools will help them to create leads. Perhaps the answer is to spend not so much on marketing and hire some help for your sales force. How are the sales people spending their time?
3. Use your budget on a branding solution.
The egg also has several SWOT Team proponents. Yet almost every one of them give the sales force credit for getting the company where it is today and continuing to involve them in the branding process.
Brad Schmidt, Director of Marketing at SnitilyCarr, explains how branding can elevate sales:
If the current 11 member sales team is worth its weight, and the sales people participate in the branding process, I'm confident they will help create a branding plan that will elevate their existing sales dramatically. They will have ownership in the plan; they will have the best understanding of what the customer wants; they will have the best idea of what the competition is doing; and they will have the best idea of the answer to their customers' question, “What's in it for me?” My advice: invest in a KNOCK YOUR SOCKS OFF branding strategy and challenge and incentivize the entire sales force to take full advantage of the investment.
Sammy Russo, Consultant with SammyRusso.com, says if your branding is working, go with advertising and sales:
My first question is—what's wrong with your current position? As we speak, my company is trying to reposition itself. We are in a very specific niche, and our competitors are beginning to appear the same as us (and all others)—so we set out to re-position ourselves. If your differentiation and your brand are solid, then why fix something that isn't broken? Now if you are looking to position yourself in an entirely new market with a new product or service, then a positioning strategy is what should come first. The reason being, you need a market to sell to; as your market share grows and your sales increase, only then will you potentially need more sales staff to continue to provide a high level of customer service.
4. Use your budget on a combination of both.
The combination theory was equally as popular as relying on the chickens or reinventing the egg. Several SWOT Team members discuss how the best of both worlds may keep your company out in front.
David J. Smith, Director of Business Development for The RMR Group, Inc., says to go ahead and scramble it up:
We tend to think in terms of one or the other. Why not both? Question: Are you satisfied with your current level of sales? Answer: Invariably, no! Meet your team half way. Spend some money on more sales efforts and some on branding. They walk hand-in-hand, not separately or on a different path. The idea is to support the sales effort with a unified message and reward them for a job well done. It sounds like your brand is already successful inasmuch as your company is growing and the customers are satisfied with the level of service you provide. Therefore, how do you maintain your current customer base, expand that base and improve your level of service and delivery? Go after the customers you have, work that network, and find new customers. Capture and maintain your database and develop strategies that bring your customers closer to you. Advertise, using very specific vehicles which reach customers like your current successful relationships. Design your message to tell these prospects and customers that you are successful with other companies like theirs. People want to surround themselves with those who are succeeding.
Don Vardell, Administrator for Peninsula Village, reminds us of the importance of backing up both strategies:
You say you have some existing sales capacity with the 2 managers and 11 reps. Is that enough to manage your current customers and meet your growth objectives? If you conduct new/additional brand awareness activities (advertising, merchandising and promotion) will you be able to meet the potential new business with your current sales capacity? Bottom line: you may need to do both. You wouldn't want to spend your whole wad on a great branding strategy, if you can't back it up with sales execution, and consistent, quality service (with a great value).
5. Define your strategy and objectives.
Because one of the SWOT Team leaders is a vegetarian, this last section discusses how to avoid being slaughtered by the competition and instead, how to prepare your chickens and eggs for long and productive lives. The key, from all of you, seems to be this: clearly define whatever strategy you agree on, and clearly set the objectives around it necessary to meet your goals.
Alexandra Lutyens, Marketing and Web Strategy Manager at Origin Design, says:
Basically, you must know where you are going: growth or retention and whether direct contact or market perception of brand is going to weight most strongly on either of those objectives. The other important factor is what predicates your brand reputation. If it's excellent service and you go out and acquire many more customers without the sales support, your brand will fall over. Again, remember that a brand is largely its people. If you go with the increased sales force approach, make sure that each person is your brand.
Susan Whitbread, Senior Consultant with Milton Marketing Group, gives this astute observation:
Sure seems like vested interest talking here! In slicing up a limited amount of budget, there's no magic recipe that prescribes the “correct” ratio of ingredients to allocate to sales or branding, or any other marketing activity for that matter. So, what's your overall business strategy for the next 2-3 years? Do you need to grow revenue (in which case hire the sales people) or are you looking for long-term value creation for your firm (in which case, I'd lean to the branding option). At the end of the day, ask yourself which of the options is most likely to contribute to increasing shareholder value for your company.
Michael Webb, President of Sales Performance Consultants, Inc., reminds us how important creating value for the customer is and that we should not forget this gem while planning our strategy:
The most important issue in marketing and sales, and the one most often forgotten is this: Everything you do in marketing and sales MUST create value for the customer. The best marketers and salespeople try to create value for customers by instinct, because they know that is how to get customers to cooperate. The best marketing and selling always leverages what is in it for the customer. Unfortunately, when it gets beyond personal behaviors to the organizational level, people often fail to ask “How are the company's resources organized to create value for the customer (in marketing and selling)?”
Marketing and sales are tied to exactly the same goal. Their activities and results can and must be measured. Ideally, the goal is to create value for prospects and customers, and revenue for your company becomes the equally important byproduct. Operating this way is the key to an ever-growing stream of profitable business, as well as the best defense against changing markets, competition and technologies.
Jaap Cleutjens, an MBA at Diamond-E Consulting, takes our theory one step farther: it may not be so much the chicken or the egg as which chicken and egg are most dependable to pull off your agreed-upon mission:
It seems more important to me that you persuade your Sales VP and your Marketing Consultant to develop a unanimous point of view or at least to reconcile their arguments and opinions in order to maximize their expertise. Read Niccolò Machiavelli, Il Principe, 23/24. The solution for chicken-egg questions: “Which chicken or which egg?”
Chirps and Cheers for the SWOT Team!
Once again, we did our best to provide a thorough overview of your thoughtful responses. Thanks for your participation, and if you would like the complete text of all responses for your own analysis, please click here.
