If you are trying to survive and even thrive at today’s oil prices, these two functions are the key to competing and staying profitable.
“Business has only two functions – marketing and innovation.”
~ Peter F. Drucker
Innovation can be disruptive, or it can propel you forward depending on which side you are on.
Innovation is more than just a technical or engineering function. Improvement also means doing things differently today than you did in the past. Essentially, you are getting out of the, “This is the way it works in our industry,” mindset. Every industry eventually comes to a point of innovate or die.
Marketing, in this definition is the broader, “Getting your product and services into the hands of a customer.” It includes both sales and marketing.
What are you doing to innovate how you market and sell your products and services?
The Cost of Sales
It requires a significant amount of money to hire, train, manage, motivate, and compensate a great sales team. If you’ve set up your sales compensation correctly, they are bringing in the profitable revenue your business needs to grow. The top producers on your sales team should be the highest, or among the highest, paid people in your company. You want to retain them. Finding the right balance between the cost of sales and the revenue you generate is tricky.
Let’s look at sales styles and how they fit into your business.
Many sales people are more order takers than actively providing a significant value to customers. You have a catalog of products. A client phones, and you help them find the right part, give a price, and then take the order. The amount of value added by the sales person is not very high.
In other industries, such as travel and banking, order takers have been replaced by online tools and automation.
The primary difference between order takers and relationship sellers is the latter builds and maintains relationships with prospects and existing customers. The idea is people buy more from those they know, like, and trust. There are components of both hunting and farming involved, but the value added by the sales person is mostly in the relationship.
The problem is loyalty based solely on the relationship is not very sticky. A lot of factors outside of your control can shift them to another supplier.
Consultative sales occur when you start helping customers find solutions to problems. They are coming to you because they get a better solution than they could on their own. This approach raises the level of expertise required from the sales team.
Challenger sales take it one step further. They engage in the bigger questions like, “Why are you doing things that way in the first place?” Because of the nature of the business problems, they tend to engage customers at higher levels. Since it means challenging the basis of the business model or, “Way things are done here,” challengers need that level of buy-in.
Appointments are often easier to obtain because executives and decision-makers look forward to what they might learn and apply to their business, whether or not they are in buying mode.
Sales Approach Considerations
The challenger sales style doesn’t preclude consultative or relationship selling. They add the most value by challenging the status quo. Astute leaders learn to appreciate that out of the box thinking.
Hiring and training people to use the wrong approach to a business scenario will cost you more for less return.
CRMs and ROI
What is the Return on Investment (ROI) for your Customer Relationship Management (CRM) system?
Most businesses have no clue. This question forces you to look at your tools mindset. If you see a CRM and the time entering data into it as an expense or necessary evil, you are doing it wrong.
A well implemented CRM tool should be seen as an investment by the company and the sales team. When your sales team can see a positive link between using the tool and the size of their commissions, the data you will capture will be ten times more powerful.
Marketing and Sales
When you use marketing and sales together wisely, you can lift the performance of the entire organization significantly.
The role of strategic marketing is to both bring in qualified leads and to support the sales process, which leads to more sales revenue. There is a lot more to it than holding or attending events, providing brochures and presentation decks to sales teams, having a website, and dabbling in social media.
Inbound marketing uses the premise that providing high quality and useful content will drive leads to you rather than you having to fight for attention. It is a permission based model; therefore, the resistance to purchasing decreases significantly. When it is done right, the sale can be partially or even 100% complete by the time they talk to a sales representative.
It is also a customer life cycle methodology from lead capture through to post-purchase support and creating raving fans. Inbound marketing is most powerful for companies that move up the value chain to being perceived as experts. They solve customer problems, consult, provide integrated solutions, or challenge the client to think differently.
Outbound and other traditional marketing approaches don’t go away, but you do get a new stream of better qualified and thus more profitable leads. The sales teams appreciate that.
Integrated Sales and Marketing
You already should have an investment in a CRM. What if:
- Your online marketing assets fed into that CRM and tracked how prospects and clients are engaging with you online?
- You could automate some of the response sequences for self-service or to take some of the administrative and tracking processes from your sales team?
- Your sales team could connect with prospects just when they are most likely to be entering buying mode and haven’t yet talked to your competition?
If you lift your sales team’s average performance by even 5-10 percent, that could translate into millions in new revenue without adding additional headcount.
Marketing and Innovation
As the world around us and our competitors continue to innovate and disrupt the status quo, we all need to be innovating and thinking strategically about our businesses. That doesn’t just apply to your products and services. It affects all your business functions. If you want to thrive, it must also include how you market and sell.
Originally published in the September edition of the Oilfield Pulse