Selling and Marketing Management
Selling and Marketing Management
Selling and marketing are two distinguishable separate functions of the organization which have a close relationship. Both the terms connect the organization to its customers through the product and services of the organization and both are necessary parts for the marketing activities of the organization. Every organization has the goal to fulfill customer needs and also to match the organizational sales target followed by financial success. In principle, both selling and marketing functions have the same objective which is generation of higher sales and profit for the organization and provide added value to the customers. Marketing is more long-term, strategic and product-oriented, whereas selling is more focused on the short-term tasks and on the needs of the customers.
In practice, the working relationship between the selling and marketing functions is frequently described as unsatisfactory and hence any improvement at the marketing and selling interface has a positive effect on top-line and bottom-line growth. Hence, in order to increase value for the organization, it is necessary for the organization to evaluate this interaction. It has not only major impact on the generation of value for the organization, but also on its capabilities to adapt to the rapidly changing environment, as this needs active and cross-functional teamwork, as well as even higher focus on the customer.
Product designers learned years ago that they would have save time and money if they had consulted with their colleagues in the production rather than just throwing new designs over the wall. The two functions realized it was not enough to just coexist, not when they could work together to create value for the organization and for the customers. From this, it appears that selling and marketing teams, whose work is also deeply inter-connected, have discovered something similar. As a rule, though, they are separate functions within the organization, and, when they do work together, they do not always get along. When sales are disappointing, marketing team blames the selling team for its poor execution of an otherwise brilliant roll-out plan. The selling team, in turn, claims that the marketing team sets very high prices and uses too much of the budget, which instead is to go toward recruiting more selling personnel or paying higher commissions.
More broadly, selling team tends to believe that marketing team is out of touch with what is really going on with the customers. On the other hand, marketing team believes that the selling team is myopic and it is too focused on individual customer experiences, insufficiently aware of the larger market, and blind to the future. In short, each team frequently under-values the contributions of the other team. This lack of alignment ends up hurting organizational performance. Time and again, it has been seen that both the teams stumble (and the organization suffers) since they are out of synchronization. On the other hand, there is no question that, when selling and marketing teams work well together, organization sees substantial improvement on important performance metrics i.e. selling cycles are shorter, market-entry costs go down, and the cost of selling is lower.
For finding the relationship between selling and marketing, it is necessary to clearly distinguish between the two terms and to clarify how they are defined. Different marketing definitions exist but the most widely used definition in theory and practice is the one from the American Marketing Association (AMA). The definition of AMA of the term marketing has changed over the years and has been adapted according to advances in marketing thought as well as its environment. The AMA definition from 1935 describes marketing as ‘the performance of business activities that directs the flow of goods and services from producers to consumers’. This definition has revealed the traditional perspective of marketing where marketing was purely distribution and trade driven.
According to the general business opinion until the mid-1950s, the term marketing was a synonym for selling with focus on the product and not on the customer. Not until 1985, did AMA change their initial definition to ‘marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives’. The focus now is on management of exchange processes and matching the traditional marketing-mix of the 4Ps namely (i) product, (ii) price, (iii) place (or distribution), and (iv) promotion.
In 2004, AMA acknowledged that marketing was a customer and customer relationship-driven term and changed their former definition to ‘marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders’. AMA further revised this definition again in 2007 to ‘the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large’ and included set of marketing institutions, which are more precisely defined as rules and regulations in a control system for marketing activities as well as the objective that marketing creates value within a number of recipients.
The variety of interpretations and definitions over the past several years shows that the term marketing is constantly changing and has been adapted from a process-oriented perspective towards a more customer-oriented perspective. All definitions include selling as part of the marketing function.
Studies on selling and sales management began around 1960. While several marketing definitions exist, the definition of selling is not as widely discussed. AMA has defined selling as ‘any of a number of activities designed to promote customer purchase of a product or service [which] can be done in person or over the phone, through e-mail or other communication media’. Other definitions related to an activity-based marketing perspective have selling included and recognized as a marketing activity. One of the studies describes personal selling as the ‘face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders’. As a result direct communication with the customer is mostly done by the selling team.
In the present day fast changing business environment, the selling practice has to take up new tools like e-commerce and m-commerce which nowadays partly substitute personal selling. Several studies have shown that selling is moving toward solution selling and has to focus even more on building relationships with each individual customer who is changing as well as from a single person as decision maker towards entire decision committees. Hence the traditional sales model is required to be replaced by key account management focusing on fewer strategic partners. A study published a survey of sales academics’ perceptions which identified that ‘increased customer expectations’ are the factor of change which has the biggest impact on the sales organization and which also influences the relationship between the selling and the marketing.
The buying funnel
The buying funnel reflects the ways in which the selling and marketing teams influence purchasing decisions of the customers. Marketing team builds brand preference, creates a marketing plan, and generates leads for sales before handing off execution and follow-up tasks to the selling team. Fig 1 shows the buying funnel.
Fig 1 The buying funnel
There is a conventional view that the marketing team takes the responsibility for the first four steps of the buying funnel consisting of customer awareness, brand awareness, brand consideration, and brand preference. This division of work keeps marketing team focused on strategic activities and prevents the team from intruding in individual sales opportunities. But if things do not go well, the blame game begins. Selling team criticizes the plan for the brand, and marketing team accuses selling team of not working hard enough or smart enough.
The selling team is responsible for the last four steps of the funnel consisting of purchase intention, purchase, customer loyalty, and customer advocacy. Selling team normally develops its own funnel for the selling tasks which happen during the first two steps. These include prospecting, defining needs, preparing and presenting proposals, negotiating contracts, and implementing the sale. Apart from some lead generation in the prospecting stage, marketing team all too frequently plays no role in these tasks.
It is frequently being suggested that implementing marketing as a strategic concept in all parts of the organization increases customer satisfaction which in turn leads to the organizational success. Both selling and marketing have the overall common goal to understand customer needs and solve problems of the customers better than the competition by offering superior value to the customers. Hence, in order to bring benefit to the organization, selling and marketing teams are required to interact and collaborate closely, so as to boost the overall business performance of the organization. Also, every organization is required to improve the relationship between selling and marketing teams so as to bring about a great positive impact on the growth of the organization.
Since the terms selling and marketing are used in different ways, also the interaction between the two functions raises a couple of issues which are required to be addressed by the organizational management. These issues are (i) how interaction between selling and marketing teams can be best organized, (ii) determination of the ideal spread of the responsibility of the marketing team, and (iii) identification of the kind of the processes which are needed to be implemented to assure a smooth co-operation between selling and marketing teams.
Previously the focus used to be more on interaction of marketing with other functions such as research and development (R&D) or finance, and people did not differ between the selling and the marketing functions. This has changed recently, as in business reality they are mainly separate functions within the organization. Selling and marketing have different tasks within the organization and normally have different goal orientations. There seems to be a lack of understanding as to what kinds of processes are important for the selling and the marketing relationship and how the two functions can work together.
Several terms are used to describe the working relationship between selling and marketing, e.g. ‘cooperation’, ‘interaction’, ‘(cross-functional) collaboration’ and ‘integration’. These are discussed below in order to establish a clear context in which the terms are used.
Organizations are grouping different business activities into separate business units or departments, majority of them are organized functionally but they can also be organized around products or customers. The different functions have different responsibilities and areas of knowledge. In case of selling and marketing e.g. deeper product knowledge on the side of marketing and more detailed knowledge of the customer on the side of selling is needed. Marketing team is interacting with several functions within the organization. It interacts not only with selling team but also with e.g. R&D and finance. In addition, it is in direct contact with customers, so in effect it has a coordinating role fulfilling demands from both outside as well as from inside the organization. This set-up results in a strong functional inter-dependency in order to perform the job properly.
It has been recognized that the selling and the marketing interaction is problematic and these two functions are not deeply interconnected. In addition, there is a psychological distance between the two. Though it has been shown that improved interaction between the selling and the marketing has a positive impact on corporate growth as well as on new product development, the organization needs to study to what extent improved selling and marketing collaboration impact customer satisfaction and as a result the organizational performance. In addition, metrics are needed in order to assess the status and performance of this relationship.
The simplest way to think of the nature and role of selling (traditionally called salesmanship) is that its function is to make a sale. This seemingly obvious statement disguises what is frequently a very complex process, involving the use of a whole set of principles, techniques, and substantial personal skills, and covering a wide range of different types of selling task. The selling team is the single most important link with the customer. The best designed and planned marketing efforts can fail if the selling team is ineffective. This frontline role of the selling team means that for many customers the selling team is the organization.
The term selling encompasses a variety of sales situations and activities. For example, there are those sales positions where the selling team is required primarily to deliver the product to the customer on a regular or periodic basis. The emphasis in this type of sales activity is very different from the sales position where the selling team is dealing with the sale of the capital equipment to industrial purchasers. In addition, some selling teams deal only in export markets whilst others sell direct to the customers in their homes. One of the most striking aspects of selling is the wide diversity of selling roles.
Increasingly, the organizations have come to recognize that this different approach of doing business is necessary in the present day environment. Consumers are now better educated and more sophisticated. Real incomes have increased steadily over the years and customers now have considerable discretionary spending power to allocate between an increasingly diverse range of products and services. Several organizations have learned the hard way that having what they feel to be a superior product, efficient production, and extensive promotion are not sufficient to confer automatic success. To have any chance of success, customer needs are to be placed at the very centre of business planning in the organization. In part, this emphasis on understanding the customer explains the development of those concepts and techniques which are aimed at understanding the customer behaviour.
A key issue for success which the sales executives need to know is the key success factors in selling. A study has asked sales executives to identify the skills and knowledge needed to be successful in selling. The top ten success factors in selling which have been identified in the study are (i) listening skills, (ii) follow-up skills, (iii) ability to adapt selling style from situation to situation, (iv) tenacity which means sticking to the task, (v) organizational skills, (vi) verbal communication skills, (vii) proficiency in interacting with people at all levels within the organization, (viii) demonstrated ability to overcome objections, (ix) closing skills, and (x) personal planning and time management skills.
In the present day environment, the selling team needs a wide range of skills to compete successfully in the market. Those days are no more there, when the selling team needed simple presentational and closing skills to be successful. Today selling needs a wide collection of skills. The key qualities which are normally recognized as being important for the selling team are (i) empathy and an interest in people, (ii) ability to communicate, (iii) determination, and (iv) self-discipline and resilience.
Empathy and an interest in people –This skill of the selling team helps in more accurately identifying the real needs and problems of the customers in terms of thinking oneself into the other persons’ mind and understanding why the customers feel as they do.
Ability to communicate – It is the ability of the selling team to get a message across to the customer and, more importantly, the ability to listen and understand. The skill of knowing when to stop talking and when to listen is necessary.
Determination – Although the selling team is required to be able to take no for an answer, this does not come easily to someone who wants to succeed in selling. It is a fact that customers can say no when they really mean maybe, which can ultimately lead to yes. Determined selling team has a need and a will to succeed and success can mean closing a sale.
Self-discipline and resilience – Majority of the selling personnel spend much of their time unsupervised and, apart from seeing customers, they are alone. As part of their job, they can expect setbacks, rejections, and failures. Hence, the selling team needs to be both self-disciplined and resilient to cope with these facets of the selling task.
The present day selling has certain characteristics which the selling team needs to know. Selling personnel who do not understand these characteristics are ill-equipped to tackle their jobs. The characteristics of the present day selling are (i) customer retention and deletion, (ii) database and knowledge management, (iii) customer relationship management (CRM), (iv) selling of the product, (v) problem solving and system selling, and (vi) adding values / satisfying needs of the customer. Fig 2 shows these six characteristics.
Fig 2 Characteristics of present day selling
Customer retention and deletion – Majority of the organizations find that 80 % of their sales come from 20 % of their customers. This means that it is important to devote considerable resources to retaining existing high volume, high potential, and highly profitable customers. Key account management has become an important form of sales organization since it means that selling personnel or selling team can focus their efforts on one or a few major customers.
At the other end of the spectrum, organizations are finding that some small customers actually cost the organization money. This is since servicing and distribution of products to these customers can push costs beyond the revenue generated. Larger organizations is required to change to telemarketing and / or the internet as the means of servicing these small customers or drop them altogether.
Database and knowledge management – The present day selling team need to be trained in the use and creation of customer databases, and how to use the internet to aid the selling task (e.g. finding customer and competitor information). In the past, selling teams recorded customer information on cards and sent in orders through the post to the head office. Today, technological advances such as email, mobile phones, and video conferencing have transformed the way knowledge is transferred. Laptops mean that the selling teams can store customer and competitor information, make presentations, and communicate with head office electronically. Furthermore, information supplied by the organization, such as catalogues and price lists, can be held electronically.
Customer relationship management – CRM needs that the selling teams focus on the long term and not simply on closing the next sale. The emphasis is to be on creating win–win situations with customers so that both parties have the interaction gain and want to continue the relationship. For major customers, CRM can involve setting up dedicated teams to service the account and maintain all aspects of the business relationship.
Selling of the product – The present day selling teams are involved in a much broader range of activities than simply planning and making a sales presentation. Indeed, face-to-face presentations can now sometimes be replaced by information presented on web pages and by email attachments which give the customer up-to-date information on several topics more quickly and comprehensively, and in a more time-convenient manner than many face-to-face interactions. The role of the selling teams are expanding to participation in marketing activities such as product development, market development, and the segmentation of markets, as well as other tasks which support or complement marketing activities such as database management, provision and analysis of information, and assessing market segments.
Problem solving and system selling – Majority of the present day selling, particularly in business to business situations, is based upon the selling team acting as a consultant working with the customer to identify problems, determine needs, and propose and implement effective solutions. This approach is fundamentally different from the traditional view of the selling person being smooth fast-talker who breezes in to see a customer, persuades the customer to buy and walks away with an order. Present day selling frequently involves multiple calls, the use of a team-selling approach and considerable analytical skills. Further, customers are increasingly looking for a systems solution rather than the buying of an individual product. This means, for example, that to sell door handles to an organization like Toyota a supplier is to know not only be able to sell a door system which includes door handles as well as locking and opening devices but also have a thorough knowledge of door technology, and the ability to suggest to Toyota solutions to problems which can arise.
Adding values / satisfying needs of the customer – The present day selling teams are required to have the ability to identify and satisfy customer needs. Some customers do not recognize they have a need. It is the job of the selling team in such situations to stimulate need recognition. For example, the customer does not realize that a machine in the production process has low productivity compared to the newer, more technologically advanced machines. The job of the selling team is to make customers aware of the problem in order to convince them that they have a need to modernize the production process. In so doing, the selling teams add value to the customer’s organizations by reducing costs and create a win–win situation for their organization and the customer.
The term marketing holds that the key to successful and profitable business rests with identifying the needs and wants of the customers and providing products and services to satisfy them. On the surface such a concept does not appear to be a far-reaching and fundamentally different philosophy of business, but in fact the marketing term needs a revolution in how the organization thinks about, and practices its business activities as compared with production or selling orientation. Central to this revolution in organizational thinking is the emphasis given to the needs and wants of the customer. The contrast between this approach and that of a selling orientated thinking of the organization is shown in Fig 3.
Fig 3 Selling and marketing orientations
As new business models and processes emerge, the biggest challenge for the selling function has become the shift from its traditional role of simply selling towards a strategic customer management function. The selling function itself is frequently structured taking into considerations geographical aspects. Other structures can be set up around customers, products, or be a mixture of all three forms.
From the organizational-functional perspective, marketing has grown from a simple selling function to a department with responsibilities for several activities. When an organization opens a business it normally starts either without or with a very small marketing function. Only if the organization is growing, then the marketing function emerge into a modern marketing department.
One of the studies has classified the different development levels of the marketing functions in six stages. At a first level, the marketing function is been fulfilled by the head of selling department. Focus here is on simply being a selling-oriented function. After expanding the organization, level two is reached as there is a need to increase the marketing resources in order to manage all the activities of the marketing. Marketing becomes a sub-division of the selling function and consists of marketing personnel and other marketing functions. If growth continues and conditions of competition get more complex, the marketing team in the organization has more and more relevance and importance.
Level three has been reached and hence marketing is to be established as a main and independent department next to the selling department. Head of selling and head of marketing are required to work closely together since there is to be alignment on a single marketing strategy. In this set-up, conflicts can arise between the two functions e.g., about the budget and the influence on marketing tools and activities. At the fourth development level, the organizational management can decide to resolve these conflicts by creating a single head for of all marketing-related functions including sales. Only when reaching this level, the organization has established a real organizational institution of an overall marketing concept. Level five is reached only if the responsible chief marketing executive is to be seen as an integrating element within a progressive organization. Marketing has to be perceived as an overall organizational task to which all employees are committed. Only if this becomes reality, the marketing can be fully integrated and hence overall customer-orientation can be achieved.
Level six is the final level and is defined in a study as the marketing function in a project- led and process-led organization where the whole organization is designed around the organizational key processes and key competencies. One person is directly responsible for leading cross-functional teams with the overall objective to reach customer-centered results, e.g. new product developments or new projects concerning customer acquisition. Selling and the marketing personnel spend most of their time working in these cross-functional teams and are not directly reporting to the selling and marketing departments anymore, but are still indirectly connected (dotted-line connections) and inform their respective departments about the ongoing projects. At this level of the development phases of functional marketing, each task of selling and marketing is connected and aligned to each other.
However, little attention has been put on how other marketing-related functions like market research and the selling teams’ management is to be structured in order to fulfill the demands of marketing management with regards to product strategy and performance. As per one of the studies, selling and marketing have different competencies and are responsible for different tasks. One key competency of the marketing function is related to product or brand management. Marketing is responsible for the development of a long-range and competitive strategy as well as preparing the annual marketing plan and sales forecast. In addition, it is working together with advertising and merchandising agencies to develop product related programmes and campaigns which are also to support the work of the selling teams. Another part of the job is to gather and collect all product related information regarding performance, customer feedback, and possibilities for improvement. To be able to fulfill the marketing task successfully, marketing is to a large degree depends on receiving input from the selling teams.
The selling function is not only about pure selling, but also plays an essential role in the organizational knowledge of its customers and their needs, as the selling function builds the interface between customer and the organization. In addition, the selling teams gather the market intelligence information so that the organization can react quickly on new developments in the market environment. The selling team is also responsible for targeting customers where the decision is made on how to allocate the time among prospects and customers. The selling process normally includes assessing customer needs, presenting product values and benefits to address those needs, but also the discussion of commercial terms, such as pricing and delivery terms. In addition, selling teams are frequently responsible for prospecting new customers. In order to fulfill these tasks properly selling personnel need, among other skills, good communication skills as they have to answer all product-related questions and establish a good customer relationship. By performing all these selling activities successfully, the organization creates a valuable relationship with customers through the selling teams and also improves the organizational business performance by enhancing market share and profits.
Selling and marketing as part of the value chain
Five key processes have been identified in the Porter value chain in which organizations are to be excellent in order to outperform their competitors. Out of these five key processes there are four which are directly or indirectly linked to the selling and the marketing relationship.
First, there is the ‘market sensing process’ which includes all activities related to information management, communicating new insights throughout the organization and to all relevant parts of the chain which have to act accordingly. Second, there is the ‘new offering realization process’ which consists of market research, as well as development and realization of new products. R&D belongs to the support activities of the chain where, for example, studies have shown that R&D-selling cooperation as well as selling-marketing cooperation during the concept development stage has an overall positive influence on new product development. The third and fourth processes are the ‘customer acquisition process’ and the ‘customer relationship management process’ which are both related to targeting and understanding of customer needs. In order to be superior in these four processes, selling and marketing need to interact properly. The last core process is the ‘fulfillment management process’ which is not referring to the selling and marketing and sales relationship but to the order fulfillment and supply chain management process and hence belongs to the primary activities.
Selling personnel play a key role in the value chain of the organization as they are creating, communicating, and delivering value to the customer by actively managing customer relationships. The marketing has a key role as well as it is responsible e.g. for creating customer and brand awareness. Coordination and collaboration as well as the right organizational culture are irreplaceable in order to manage a value chain successfully. By driving the mentioned core processes related to cross-functional selling and marketing co-operation to excellence, the organization outperforms competition and creates added value as well as customer satisfaction.
This shows that there is a shift from focusing only on how the organization can create competitive advantages through increased productivity within the value chain towards a perspective on how they can increase the quality of their customer relationship through better cross-functional team work. This is because one of the foundations of the organization’s competitive advantage is the creation of ‘superior customer value through an effective selling and marketing relationship’.
Selling and marketing interaction in a holistic marketing concept
One of the studies has discussed the holistic marketing concept in which the study incorporates all the stakeholders related to marketing. The study divides holistic marketing into four sub-issues namely (i) internal marketing, (ii) socially responsible marketing, (iii) relationship marketing, and (iv) integrated marketing. These sub-issues are embedded in the marketing information system (MIS) where the focus is not only on communication from organization to customer, but also on the communication flow from the customer to the organization, and within the organization. The MIS is made up of people, tools, and processes with the objective to organize and distribute the information flow for marketing decisions in the organization.
Internal marketing is about ensuring that everyone in the organization, particularly senior management, supports and works according to the relevant marketing principles. Within selling and marketing, this highlights especially the importance of the collaboration between the two functions with each other but also with other departments. In addition, study has shown the importance of management’s attitude towards supporting the relationship between the selling and the marketing. Socially responsible marketing incorporates social and ethical considerations in the holistic marketing concept.
Another part of the holistic marketing concept is relationship marketing, which is defined as ‘having rich, multi-faceted relationships with customers, channel members, and other marketing partners’. While earlier tasks of selling were defined as simply to sell a product, the directional change today is towards relationship marketing as one of the key elements within the selling function in order to generate sales.
Finally, integrated marketing as part of the holistic marketing concept focuses on marketing tools and activities with the objective to assure that all tools and activities are aligned and bring optimal value to the customer. One traditional depiction of marketing activities in an integrated marketing concept is in terms of the marketing mix, which has been defined as the set of marketing tools or elements the organization uses to pursue its marketing objectives. One of the studies has classified these tools into four broad groups, which are called the 4Ps of marketing (product, price, place, and promotion). ‘Product’ is about the product itself and its characteristics like quality, packing size etc. ’Price’ is determined together with the pricing strategy covering rebates and discounts. The ‘place’ is about the distribution of the product.
As per one of the studies, selling is just one part of marketing activities. To be able to use the marketing tools effectively, it is important to translate the organization’s overall strategy into a marketing strategy. The marketing tools are not only to be used short-term on an operational level, but also on a long-term basis. Any issues within the marketing mix coming up on a day-to-day basis need to be identified and addressed accordingly. The key to addressing these issues is having good channels of communication and information related to changes in the behaviour of the customers and competitors. This is where selling and marketing collaboration can have a big influence. Finally, organizations need to focus on the marketing-mix not only from an intra-departmental perspective, but also from an overall inter-departmental perspective in order to fully integrate marketing.
Recent studies have investigated ‘cross-functional cooperation’ between selling, marketing, and the R&D functions during new product development. Cross-functional co-operation consists of several activities like development and assessment of concepts and ideas as well as taking decisions regarding final marketing concepts. Studies have identified that this kind of co-operation in new product development frequently leads to organizational success. One of the studies has categorized the multiple terms existing for inter-functional relationship into two groups. It defines a ‘behavioural approach’, which is related to the level of interaction and level of information sharing between different functions, as well as an ‘attitudinal approach’, which is related to integration as a form of collaboration.
‘Collaboration’ has been a major interest in various studies in order to evaluate the status and kind of integration of different functions. Collaboration is defined as a set of intangible activities where two or more functions work together. Collaboration builds on relationship and teamwork which is supported by having common goals and shared values and hence resulting in a ‘cooperative internal environment’. Further, according to the definition of ‘collaboration’, a collaborative relationship has to be preferred over ‘interaction’ as ‘collaboration’ lead to a greater performance success. Both, co-operation and collaboration have been associated with a close relationship between two functions of selling and marketing and identified as a basis for teamwork.
The term ‘horizontal integration’ indicates a need to combine two or more functions into a single function or process which is not desirable for selling and marketing because of their functional knowledge. However, a study describes selling and marketing integration as a dynamic process in which these two functions increase value for the organization by working together. One of the study has focused in its interpretation of integration on the ‘extent of R&D-marketing involvement and information sharing’ in different stages of the product development process, while another study has a composite perspective of integration in which interactive and collaborative processes are combined and running simultaneously. According to the findings in this study the highest positive correlation to improve performance outcome measures like organizational and product management performance, as well as employee satisfaction has proven to be collaboration between departments with a focus on informal ways to communicate instead of formal meetings and documentation. In short, the term inter-departmental integration can be used as a synonym for integration.
Some other studies have focused on ‘inter-functional interaction’ by treating it as a special form of ‘open social system’ which is characterized by the motivation of ‘individual and collective interests’ on the one side and by interdependent processes due to ‘specialization and division of labour’ on the other side. Interaction is facilitated by increased formal and informal communication through working at the same location, dedicated people who work as ‘integrators’ as well as joint customer visits and job rotation. One of the studies has identified cross-functional interaction as a key aspect in marketing orientation which is not only related to the dissemination of information but also to the allocation of influence on marketing activities towards different functions as this is beneficial for performance .
Coordination between selling and marketing
Senior management frequently describes the working relationship between the selling and the marketing teams as unsatisfactory. The two functions as per the senior management under communicate, under perform, and over complain.
When selling and marketing operates independent of one another, the selling team is worried only about fulfilling product demand, not creating it. Marketing fails to link advertising funds spent to actual sales made, so selling team obviously cannot see the value of marketing efforts. And, since the selling and marketing teams have poorly coordinated, the new product announcements of marketing frequently come at a time when selling team is not prepared to capitalize on them. Because of this kind of disconnect between selling and marketing teams, there is a study conducted for identifying best practices which help to enhance the joint performance and overall contributions of the selling and the marketing teams in the organization. The findings of the study are (i) the marketing function takes different forms in different organizations at different product life-cycle stages, all of which can deeply affect the relationship between selling and marketing teams, (ii) the strains between selling and marketing teams fall into two main categories which are economic and cultural, (iii) it is not difficult for the organizations to assess the quality of the working relationship between selling and marketing teams, and (iv) organizations can take practical steps to move the two functions into a more productive relationship, once they have established where the teams are starting from.
Different roles for marketing – Before looking closely at the relationship between the selling and the marketing teams, it is required to recognize that the nature of the marketing function varies considerably from organization to organization. Majority of small organizations do not establish a formal marketing team at all. Their marketing ideas come from managers, the sales team, or an advertising agency. Such organizations equate marketing with selling. They do not conceive of marketing as a broader way to position their organizations.
Eventually, successful small organizations add an executive (or executives) to help relieve the selling team of some activities. These new executives conduct studies to calibrate the size of the market, choose the best markets, and channels, and determine potential buyers’ motives and influences. They work with outside agencies on advertising and promotions. They develop collateral materials to help the selling team attract customers and close sales. And, finally, they use direct mail, tele-marketing, and trade exhibitions to find and qualify leads for the selling team. Both selling and marketing teams see the marketing team as an addition to the selling team at this stage, and the relationship between the functions is normally positive.
As the organizations become bigger and more successful, management recognizes that there is more to marketing than setting the four Ps. Four Ps determine that effective marketing calls for people skilled in segmentation, targeting, and positioning. Once organizations recruit marketing personnel with those skills, marketing becomes an independent player. It also starts to compete with the selling for budget funds allotment. While the mission of the selling has not changed, the mission of the marketing has changed and hence disagreements arise. Each function takes on tasks it believes the other is suppose to do but it is not able to do. Hence, all too often, organizations find that they have a marketing function inside the selling team, and a selling function inside the marketing team.
At this stage, the selling team wishes that the marketing team is to worry about future opportunities (long-term strategy) and leave the current opportunities (individual and group sales) to them. Once the marketing team tackles higher level tasks like segmentation, it starts to work more closely with other departments, particularly strategic planning, product development, finance, and production. The organization starts to think in terms of developing brands rather than products, and brand managers become powerful players in the organization. The marketing team is no longer a humble subsidiary to the selling team. It sets its sights much higher. The marketing team believes it is necessary to transform the organization into a ‘marketing-led’ organization.
As the marketing team introduces this rhetoric, others in the organization (including the selling team) question whether the marketing team has the competencies, experience, and understanding to lead the organization. While marketing increases its influence within separate business units, it rarely becomes a major force at the corporate level.
There are two sources of friction between selling and marketing. One is economic, and the other is cultural. The economic friction is generated by the need to divide the total budget granted by senior management to support the selling and the marketing. In fact, the selling team is appropriate to criticize how marketing team spends money on three of the four P’s (pricing, promotion, and product). Take pricing for example, the marketing team is under pressure to achieve revenue goals and wants the selling team to ‘sell the price’ as opposed to ‘selling through the price’. The selling team normally favours lower prices since they can sell the product more easily and since low prices give them more room to negotiate.
In addition, there are organizational tensions around pricing decisions. While marketing team is responsible for setting suggested retail or list prices and establishing promotional pricing, selling team has the final say over transactional pricing. When special low pricing is needed, marketing team frequently has no input. The selling team takes direct clearance from finance. This does not make the marketing team happy.
Promotion costs are also a source of friction. The marketing team needs to spend money to generate customers’ awareness of, interest in, preference for, and desire for a product. But the selling team frequently views the large sums spent on promotion (particularly on television advertising) as a waste of money. The selling team tends to think that this money is better spent increasing the size and quality of the selling team.
When marketing team helps set the other P, the product being launched, selling team frequently complains that it lacks the features, style, or quality the customers want. This is because the world view of the selling team is shaped by the needs of its individual customers. The marketing team, however, is concerned about releasing products whose features have broad appeal.
The budget for both the teams also reflects which department wields more power within the organization, an important factor. Organizational management tends to favour the selling team when setting budgets. Management frequently sees selling activity as more tangible, with more short-run impact. The contributions of the selling team to the bottom line are also easier to judge than the contributions of the marketing team.
The cultural conflict between the selling and the marketing is, if anything, even more entrenched than the economic conflict. This is true in part since the two functions attract different types of people who spend their time in very different ways.
Marketing personnel who until recently had more formal education than selling personnel, are highly data oriented, analytical, and project focused. They are all about building competitive advantage for the future. They judge the performance of their project with a cold eye, and they are ruthless with a failed initiative.
However, that performance focus does not always look like action to their colleagues in selling since it all happens behind a desk rather than out in the field. Selling personnel, in contrast, spend their time talking to existing and potential customers. They are skilled relationship builders. They are not only savvy about willingness of the customer to buy but are also familiar to which product features fly and which do not. They want to keep moving. They are used to rejection, and this does not depress them. They live for closing a sale.
It is hardly surprising that these two teams of people find it difficult to work well together. If the organization does not align incentives carefully, these two teams also run into conflicts about seemingly simple things, for example, which products to focus on selling. Selling team can push products with lower margins which satisfy quota goals, while marketing team wants them to sell products with higher profit margins and more promising futures. More broadly speaking, the performance of the two teams is judged very differently. Selling team make a living by closing sales, full stop. It is easy to see who (and what) is successful, almost immediately. But the marketing team’s budget is devoted to programmes, not people, and it takes much longer to know whether a programme has helped to create long term competitive advantage for the organization.
Relationships between selling and marketing teams – Given the potential economic and cultural conflicts, some strains are expected to develop between the selling and the marketing teams. And, indeed, some level of disruption normally does exist, even in cases where the heads of selling and marketing teams are friendly. The selling and marketing teams in the organization show four types of relationships namely (i) undefined, (ii) defined, (iii) aligned, and (iv) integrated. The relationships change as the marketing and selling functions of the organization mature. The teams move from being unaligned (and frequently conflicted) to being fully integrated (and normally conflict-free), though complete integration between the two teams is very difficult to achieve.
When the relationship is undefined, selling and marketing teams have grown independently. Each team is preoccupied largely with its own tasks and agendas. Each team does not know much about what the other team is up to, until a conflict arises. Meetings between the two, which are ad hoc, are likely to be devoted to conflict resolution rather than proactive cooperation.
In a defined relationship, the two teams set up processes and procedures to prevent disputes. There is a ‘good fences make good neighbours’ orientation. The selling and the marketing teams know who is supposed to do what, and they stick to their own tasks for the most part. The teams start to build a common language in potentially contentious areas, such as ‘how the teams define a lead’. Meetings become more reflective and people raise issues like ‘what the teams expect of one another’. The teams work together on large events like customer meets and participation in exhibitions.
When selling and marketing teams are aligned, clear boundaries between the two exist, but they are flexible. The teams engage in joint planning and training. The selling team understands and uses marketing terminology such as ‘value proposition’ and ‘brand image’. Marketing team confer with selling team on important matters. They play a role in transactional or commodity sales as well.
When selling and marketing teams are fully integrated, boundaries become blurred. Both the teams redesign the relationship to share structures, systems, and rewards. Marketing, and to a lesser degree selling, begins to focus on strategic, forward thinking types of tasks (for example, market sensing) and sometimes splits into upstream and downstream teams. Marketing team is deeply embedded in the management of key parameters. The two teams develop and implement shared metrics. Budgeting becomes more flexible and less controversial. A culture of ‘rise or fall together’ develops.
Philip Kotler and co-workers have designed an assessment tool which can help the organizations gauge the relationship between their selling and marketing teams. The tool was originally developed to help their study, but the executives of the organizations being studied quickly appropriated it for their own use. Without an objective tool of this kind, it is very difficult for managers to judge their cultures and their working environments.
Moving up – Once the organization understands the nature of the relationship between its marketing and selling teams, senior management can wish to create a stronger alignment between the two. However, it is not always necessary.
Moving from ‘undefined to defined’ – If the organization is small, members of selling and marketing teams can enjoy good, informal relationships which need not be disturbed. This is especially true if the role of the marketing is primarily to support the selling team. However, senior management is to intervene if conflicts arise regularly. This normally happens since the teams are competing for scarce resources and since their respective roles have not been clearly defined. At this stage, management is required to create clear rules of engagement, including handoff points for important tasks like following up on sales leads.
Moving from ‘defined to aligned’ – The defined state can be comfortable for both parties. ‘It may not be perfect, but it is a whole lot better than the undefined state’. However, staying at this level does not work, when the industry is changing in considerable ways. For example, if the market is becoming commoditized, a traditional selling team can become costly. Or if the market is moving toward customization, the selling team is required to upgrade its skills. The heads of selling and marketing teams at that time want to build a more aligned relationship and jointly add new skills.
To move from a defined relationship to an aligned one it is necessary to encourage disciplined communication. When it comes to improving relations between any two functions, the first step inevitably involves improving communication. But it is not as simple as just increasing communication between the two groups. More communication is expensive. It needs time, and it prolongs decision making, and hence disciplined communication is important. Regular meetings are needed between selling and marketing teams (at least quarterly, perhaps bimonthly or monthly). It is to be ensured that major opportunities, as well as any problems, are on the agenda. The discussions are to be focused on action items which resolve problems, and perhaps even create opportunities, by the next meeting.
Selling and marketing teams need to know when and with whom they are to communicate. Organizations are to develop systematic processes, procedures, and guidelines. Organizations also need to establish an up-to-date, user friendly ‘who to call’ database. People get frustrated and they waste time when they search in the wrong places for help. Creation of joint assignments and rotation of jobs can help.
When the selling and marketing teams become better aligned, it is important to create opportunities for the selling and marketing teams to work together. This makes them more familiar with each other’s ways of thinking and acting. It is useful for the marketing team, particularly brand managers and persons carrying out market research, to occasionally go along on the calls of selling team. They are to get involved with developing alternate solutions for the customers, early in the process of selling. And they are also to participate in on important planning sessions. Selling team, in turn, is to help to develop marketing plans and is to participate in product-planning reviews. They are to preview advertisements and sales-promotion campaigns. They are to share their deep knowledge about the purchasing habits of the customers .
Jointly, selling and marketing teams are to generate a road map for expanding business in various market segments. They are also to plan events and conferences together. There is needed a close liaison between the selling and the marketing teams. The conflicts between the two teams are to be resolved. The tacit knowledge of one team is to be shared with the other team. It is important not to micro-manage the liaising activities. The liaising activities are needed so that the products are developed in which the selling team works hand in hand with the key customers.
Selling and the marketing teams are to share. It is an old and simple truth that when people are physically close, they interact more frequently and are more likely to work well together. Locating both the selling and the marketing teams at nearby locations leads to a more closely aligned relationship. Many of the organizations have centralized their selling and marketing functions, while the members of their selling team remain geographically dispersed. Such organizations need to work harder to facilitate communication between selling and marketing teams to create shared work.
Marketing team frequently complain that members of selling team are too busy to share their experiences, ideas, and insights. Indeed, very few selling team members have an incentive to spend their precious time sharing customer information with the members of the marketing team. They have to fulfill the targets, after all, and limited time in which to meet and sell to the customers. For more close alignment of selling and marketing, senior management is required to ensure that the experience of the selling team can be tapped with a minimum of disruption.
Moving from ‘aligned to integrated’ – Majority of the organizations function well when the selling and the marketing teams are aligned. This is especially true if the selling cycle is relatively short, the process of selling is fairly straight-forward, and the organization does not have a strong culture of shared responsibility. In complicated or quickly changing situations, there are good reasons to move selling and marketing into an integrated relationship. This means integrating such straight-forward activities as planning, target setting, customer assessment, and value-proposition development.
Though, it is tougher to integrate the procedures, processes, and systems of the selling and the marketing teams, these are to be replaced with common processes, metrics, and reward systems. Organization is required to develop shared databases, as well as mechanisms for continuous improvement. Hardest of all is changing the culture to support integration.
The best examples of integration which can be seen in those organizations which already emphasized shared responsibility and disciplined planning, which were metrics driven, which tied rewards to results, and which are managed through procedures, systems, and processes. The main rationale for integrating selling and marketing functions is that the two functions have a common goal which is the generation of profitable and increasing revenue. It is logical to put both functions under one common head who is responsible for both selling and marketing.
Both selling and marketing teams are responsible for a sequence of activities and events (sometimes called a funnel an shown in Fig 1) which leads customers toward purchases and, hopefully, ongoing relationships. Such funnels can be described from the customer’s perspective or from the seller’s perspective. Marketing is normally responsible for the first few steps namely building customers’ brand awareness and brand preference, creating a marketing plan, and generating leads for sales. Then selling team executes the marketing plan and follows up on leads. This division of work has merit. It is simple, and it prevents marketing team from getting too involved in individual sales opportunities at the expense of more strategic activities. But the handoff brings serious penalties. If things do not go well, selling team can say that the plan has been weak, and marketing team can say that the selling team has not worked hard enough or smart enough.
In the organizations, where marketing team makes a handoff, marketing team can lose touch with active customers. Meanwhile, selling team normally develops its own funnel describing the sequence of selling tasks. Funnels of this kind integrated into the CRM system and into sales forecasting and account-review processes, form an increasingly important backbone for sales management. Unfortunately, marketing frequently plays no role in these processes. However, some organizations integrate marketing into the sales funnel. For example, during prospecting and qualifying, marketing helps selling to create common standards for leads and opportunities.
During the needs-definition stage, marketing team helps selling team to develop value propositions. In the solution development phase, marketing team provides ‘solution collateral’ organized templates and customizing guides so selling team can develop solutions for customers without constantly having to reinvent the wheel. When customers are nearing a decision, marketing contributes case study material, success stories, and site visits to help address the concerns of the customers. And during contract negotiations, marketing team advises the selling team on planning and pricing. Of course, the involvement of the marketing team in the sales funnel is to be matched by the involvement of the selling team in the upstream, strategic decisions the marketing team is making. Selling team is to work with the marketing team and R&D personnel as they decide how to segment the market, which products to offer to which segments, and how to position those products.
There is a strong case for splitting marketing team into upstream (strategic) and downstream (tactical) teams. Downstream marketing team develops advertising and promotion campaigns, collateral material, case histories, and sales tools. They help selling team to develop and qualify leads. The downstream team uses market research and feedback from the selling team to help sell existing products in new market segments, to create new messages, and to design better sales tools. Upstream marketing team engages in customer sensing. That is, it monitors the voice of the customer and develops a long view of the business opportunities and threats of the organization. The upstream team shares its insights with senior management and product developers and it participates in product development.
The integrated organization does not succeed unless selling and marketing teams share responsibility for revenue objectives. The marketing team is required to use whichever tools it needs to make sure that the selling team is effective, since, at the end of the day, the marketing team is also judged on the sales target as well. One of the barriers to shared objectives, however, is the thorny issue of shared rewards. For the successful integration of the two functions, management is required to review the overall compensation policy.
The need for common metrics becomes critical as marketing team becomes more embedded in the sales process and as selling team plays a more active role in the marketing function. In order to be a customer-intimate organization, there is a need that the organization is metrics driven and has metrics in place which track performance of both the selling and the marketing teams. On a macro level, organization needs to have the selling targets to which both selling and marketing teams are to commit. There is no escaping the fact that, however well integrated selling and marketing are, the organization is also to develop metrics to measure and reward each team appropriately.
Sales metrics are easier to define and track. Some of the most common measures are percent of sales targets achieved, number of new customers, number of sales closings, average gross profit per customer, and sales expense to total sales. When downstream marketing team becomes embedded in the selling process, it is only logical to measure and reward the performance using sales metrics. But then how the organization evaluates its upstream marketing team. Examples are on the basis of the accuracy of the product forecasting, or the number of new market segments discovered. The metrics vary according to the type of marketing job. Senior management is required to establish different measures for brand managers, market research personnel, marketing information systems personnel, advertising personnel, sales promotion personnel, market segment personnel, and product personnel. It is easier to identify a set of metrics if the purposes and tasks of the marketing team are clearly outlined. Still, given that upstream marketing team is more engaged in sowing the seeds for a better future than in helping to reap the current harvest, the metrics used to judge their performance necessarily become softer and more judgmental.
Obviously, the difference between judging present and future outcomes makes it more complicated for the organization to develop common metrics for the selling and the marketing teams. Upstream marketing team in particular is required to be assessed according to what they deliver over a longer period. Selling team, meanwhile, are in the business of converting potential demand into the present day sales. As the working relationship between the selling and the marketing becomes more interactive and interdependent, the integrated organization continues to struggle with this difficult, but surely not insurmountable problem.
Not every organization wants to or is required to upgrade from defined to aligned relationships or from aligned to integrated relationships. But every organization can and is required to improve the relationship between the selling and the marketing teams. Carefully planned enhancements bring the intimate knowledge the selling team of the organizational customers into the organization’s core. These improvements also help the organization to serve the customers better and help in building better products for the future. This also helps the organization to marry softer relationship-building skills with harder analytic skills. This also forces the organization to closely consider how it rewards people and whether those reward systems apply fairly across functions. Best of all, these improvements boost both the top-line and bottom-line growth in the organization.
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