Don’t worry; this isn’t going to be an article about Sado-Masochism! Well, come to think of it, that term may apply to what some founders and senior managers in software and hardware tech companies are doing to themselves and their companies. What I’m referring to is the VP who gets hired to manage both the Sales and Marketing functions. Oftentimes this turns out to be a job we like to call jokingly the “VP-SALES and marketing”. Thus the phrase “Big S, little m”. The position is usually offered to a crack sales guy or gal, who also sometimes happens to have had a marketing title somewhere in their work background.
JUST GO GET THE ORDERS!, MR./MS. VP-Sales and Marketing
To tech company insiders the meaning is clear. The anointed candidate is expected to beat the bushes for customers and bring in new orders quickly. Oh, and by the way, Mr./Ms. VP, you’ll also be in charge of producing data sheets and attending a few trade shows. And, I almost forgot, you’ll be in charge of that website we have too, as well as anything else we might do online! You know, all that marketing stuff!
You’ll recognize this as not a very modern approach to sales and marketing. In many of these cases, I would recommend that anyone being approached for a job like this run in the other direction as fast as possible. These positions are often classic “traps”. The upper management attitude often is “We’ve got a great new product/technology; all we need is someone to go (figuratively or literally) knock on a few customers’ doors and bring the purchase orders back to headquarters”.
Not an ideal approach
Most will recognize that this is usually a recipe for a very unhappy outcome. The founders and senior management will not be happy with revenue and profits, and the new VP-Sales and Marketing will be VERY unhappy because he or she is likely to get fired within 9-12 months. The other employees will be depressed and talk about how “Sales & Marketing” is the weak link in the company. And the investors, of course, will be very, very cranky.
Why does this occur? It often occurs when the key senior decision-makers don’t have either a background or an appreciation for the difficulty of the sales function. It’s even more likely to happen when there is no key decision maker in the company with exposure to modern marketing techniques. Lastly, the decision maker’s attitude also may include overconfidence in the role that “superior company technology” plays in overall success.
IS technology alone ENOUGH to win sales orders?
Certainly having a defensible technological advantage is a major factor in the success of a tech company, especially when that company is in startup mode. It’s pretty much a requirement for sustained revenue growth in most SaaS or hardware tech companies. The problem arises when management believes this technology advantage by itself is enough to “win”.
In reality, how hard is cold calling and knocking on doors for a sales force with an unknown company name? Not to mention selling an unproven product that hasn’t yet scaled, or worse, not yet demonstrated adequate product/market fit? Even worse yet, one which solves a problem the customer may not yet know exists? I’ll give you a hint—it’s really, really hard! One of the hardest things there is in the tech business, IMO.
Again, there is likely here a lack of understanding of the crucial role that marketing plays in establishing a new product in the marketplace. There may be a view that marketing is some theoretical, squishy function that is a waste of money, or maybe something that has value but the company just can’t afford it. This happens frequently in a classic, technically driven software startup. A startup’s management might think we’ll introduce the product, sell a bunch, and build the marketing function later. Unfortunately, that thinking is as backward as can be, and will usually lead to the unhappy results discussed earlier in this article.
Wholistic product marketing in the tech business
Why IS marketing so important, and why must it be a critical part of the new product development process? It’s because marketing is crucial in every phase of planning, introducing, and growing the revenue of new products, from conception until end-of-life. In the beginning, an engineer may come up with a great new technology that appears to allow someone to do an existing task better. Or maybe it allows someone to do something that wasn’t even possible before. But in reality, that’s just the beginning of the product planning and development process.
Product engineers aren’t trained to closely match customer needs with the specific features required to turn this whiz-bang new technology into a product with broad target market acceptance. Often product engineers and programmers think it’s easy – you just go ask the customer what he wants! But it’s funny; customers often don’t tell you the truth, and sometimes they outright lie.
Quite often with respect to breakthrough technologies, in particular, customers don’t even know what they really want! Even if they tell you the truth, make sure that what these customers are telling you is representative of your entire target market, not just their peculiar preferences. This is a task that looks intellectually easy on the surface. But for a lot of reasons I won’t expound on here, it’s very difficult to get right.
Marketing in the very early startup stage
Sometimes companies do get it right even without an experienced, professional marketing function in place. This happens frequently when the founders and/or engineering team are building something that is simple, they have significant previous experience with, or most ideally something they are themselves a potential customer for. Let’s assume for a moment that they do get that initial product concept right. There’s still a very long way to go before those purchase orders start pouring in.
The product must still be positioned properly relative to the direct and indirect competition in the market. It needs to be priced so that the market is willing to take a close look. And also not so high or low that it retards the product’s long-term profit potential. Will it be distributed only through the company’s direct sales force, or should we also court VARs, distributors, retailers, or OEMs? What kind of discount structure can we offer each of those partners without creating gray markets or channel conflicts?
Demand generation without cold-calling is also critically important
And please, let’s not forget about creating a bit of demand for those poor guys and gals in the sales force. Cold calling really does suck! It’s gotten harder and harder for decades. It’s not good for anyone: particularly the sales reps and the company’s profitability. If cold-calling dominates most of the sales force’s time, this will also “burn out” your sales force in no time. This can lead to excessive turnover.
Marketing programs that generate hot leads, or complete sales, are more cost-effective than cold-calling sales reps. So how should we generate those leads? Should it be via PR, Advertising, Direct Marketing, Partnering, Search Engine Optimization, Paid Search or Social Media Ads, Trade Shows, or content marketing? The Marketing folks should be the strategic quarterbacks of the product concept and demand generation. They should be driving the answers to these questions, as well as executing the strategy within the required budgetary and other resource parameters.
A VP-SALES and marketing MIGHT WORK—BUT DON’T BET ON IT
So does “BIG S, little m” NEVER work? Well, in some cases it not only works, but it is also the most appropriate approach. Take the example of a semiconductor company selling a very niche chip to a well-defined vertical segment. They might have only 50-200 potential customers. In this case, you often REALLY CAN just go ask the customer what they want. You can easily ask enough of them that you will end up building products that will apply to your entire target segment. With respect to lead generation, the target market is so small that traditional outbound marketing programs often don’t make sense anyway. That “door-to-door” marketing by your sales force might work just fine.
But I propose to you that this example scenario is the classic “exception that proves the rule”. In many, if not most cases, “BIG S, little m” will lead to failure – or at the very least, sub-optimal performance.
One final thought. I’m not at all against a “true” Senior VP-Sales and Marketing–someone who is very good and experienced in both functions. This also assumes that the person will be given adequate resources and a charter in both departments. But in reality, it’s hard to find folks that are really good at either. Those who are very good at both are truly scarce, although not non-existent. If you can find someone that excels at both functions, you do get an added bonus in the ability to seamlessly optimize the integration of sales and marketing functions. Again, the trick is that this individual needs to have real competence in both areas. And importantly, be able to function as a fair arbiter between departments, without the perception of favoritism toward either.
That’s my view—as always I’m very interested in hearing yours–post a comment below! Also, please consider sharing this article with your colleagues if you feel it has value.
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