Be Market Driven, Not Sales Driven...Here's Why!
Hey-
One thing I hear about a lot is “Why shouldn’t my business by sales driven?”
This is a very good question because you can’t make any money without sales, but let me flip the question around a little bit.
First, you need to recognize the four most common orientations in a business and what they mean:
Advertising Oriented: means that you can just advertise your way out of anything or into any sale necessary. Think of it as putting lipstick on a pig.
Product Oriented: means that the product is supreme and that the only thing holding y’all back from selling tons is the need to educate folks.
Marketing Oriented: means that the marketing department is the team that helps make sure the voice of the customer gets into the organization and that someone is always paying attention to what the customer wants.
Sales Oriented: means that sales is supreme and that all sales are a good sale and that the only thing that is holding us back is that we don’t have enough stuff to sell.
Putting too much focus on advertising can be seen in a few cases right now:
Burger King rolled out a bunch of ads about a year ago with a moldy burger, talking about the quality of their beef and its freshness, but the business with the burgers with no preservatives…McDonald’s.
VW had a problem with trying to skirt emissions standards and when busted, they rolled out a series of ads talking about “trust”.
Peloton has been right in the grips of this lately since they just rolled out a promise to speed up their deliveries and their infrastructure while folks are waiting 6+ months and folks are getting delayed further and further.
Another way of putting this is that Ad Oriented often means BS.
The challenge with Product Orientation is that when you think marketing is all about education, you miss the point of what the customer wants.
The classic business school example is 3M that had a hit with the Post-It note. When it works…it kills.
More often than not, it doesn’t.
The challenge here is that folks fall in love with the problem they think they are solving or the belief that they know better than their customers what their customers need.
This explains a lot of really ridiculous devices and me-too products that have come out of Silicon Valley the last few years.
You can’t just turn a blind eye to the market and assume that you know everything.
You have to listen to the customer.
Which brings us to Market Orientation and Sales Orientation.
Market Oriented is about the customer and getting their voice into the organization.
The upside here is that you are always talking with the customer and you can keep a pulse on what they want, need, and are dealing with.
If you are doing this well, you are in the market, innovating, and back into the market…over and over.
This works well because you find more and more that your customers are telling you what they want and you are able to design or find things that fit them.
Sales Oriented is about pushing sales out the door.
That’s great because you can’t make any money if you don’t make any sales.
I’m a much better marketer than I am salesperson, at least in the classic sense of the terms. So I don’t want to dismiss the salespeople in the next example, but the challenge with being driven to keep pushing sales out the door comes in the following ways:
If you are sales driven, all customers are good customers. Even when we all know that this isn’t true.
If you are sales driven, all sales are good sales. No matter if you don’t have any margin, have to discount, or do something else that undermines your price integrity.
If you are sales driven, you often just need some new fresh products. Because we just need more stuff.
And, I bet you often hear these things from your sales folks like:
“They need a little on the price.”
“If we just had X, they’d definitely buy.”
“The price is too high. Can we discount.”
“Let’s just crush the phones and see what we can turn up.”
All of these things are a sign that the sales culture needs some attention.
Because all customers aren’t good customers. Sales oriented often means taking on people that might undermine your business because they push you for prices that hurt you in the market, take resources from more profitable projects, or just cause more trouble than they are worth.
All sales aren’t good sales because we can’t discount. Discounts destroy our brands. We can’t afford to compete on low margin or commodity business because then we become a commodity. And, even more, there is no justification for any business to become a commodity.
More products is rarely the right answer. In fact, most businesses have too many products. If you have too many things going on, often it means you don’t have one or two things that you do well. And, that’s not a good place to be either.
Don’t even get me started on compensation for salespeople because they are often rewarded just on the top line, not the bottom line.
I could be here all week.
Flip this around and look at the idea of market driven and you see that the flip side of these ideas are actually at play.
In market driven businesses, you realize that you can’t be everything to everyone so you don’t need more products. You just need to make sure that the products you have can fill a need for your market and that you stand out against your competition.
In a market driven business, you don’t discount because you’ve done research on your pricing and realize that price setting is one of the most important decisions you make as a marketer.
As a market driven business, you know that you have to make a mark in the sand and that you aren’t for every customer. I like to think of this as the Michael Stipe position, “The name of this band is REM. This is who we are and this is what we do.”
In a market driven business, you know that too many products is a danger sign because the paradox of choice is real and people want less choice but more security in their choices.
In my view, the sales orientation and the market orientation are the two sides of a coin.
It isn’t that I don’t like sales orientation, it is that I don’t like sales at the expense of smart marketing.
Because if you’ve followed along…
Market Oriented business do a few things that the sales at all cost model undermines:
They maintain their price integrity.
They know their customers better and can create or find stuff that fills deeper needs, giving them a better competitive advantage, and enabling better pricing.
They make more money because they are trading on emotions, relationships, and by identifying the roots of the need.
I’m not anti-sales, but I’m definitely pro-marketing.
Dave