Similar to De Tocqueville’s famous comment, “People get the government they deserve,” I think companies get the market share they deserve based on their ability to market. We can agree that without marketing (the ability to create demand and sell) no company succeeds, and yet so many companies fail to succeed as marketers. They may create a terrific product and learn how to manufacture it efficiently, and yet they approach marketing as an afterthought. I once heard a company president, during a company tour, say to his guests, “And here we have our overhead departments.”
I think it is shockingly true that companies get the market share they deserve.
If they have great marketing programs (Salesforce.com and Marketo come to mind), they succeed. If their marketing is underfunded or poorly managed (people and processes), they fail because of a dysfunctional approach to the market. There can’t be any other reason.
For some reason (usually ignorance), company presidents think they can prosper in a marketing vacuum and ‘save’ their way to success. Not spending on marketing is like stopping your watch to save time.i Neither works.
Aside from creating the product, nothing else matters more than to take it to market and sell it. If a company can’t do that, they will eventually disappear. Marketing (both marketing AND sales activity) is the skill that company owners learn to achieve, or die.
By marketing I mean to create a demand, and demand creation is nothing more than an interest on someone’s part to buy your product. Interest translates into sales leads; no sales leads, no sales.
How do I know? We see it every day when mediocre products survive because they have great marketing. And we also see great products fail because marketing is underfunded and undermanaged.
A Message to the C-Level (marketers already know this)
You can market your way to success. If you spend enough money creating and managing demand, even a commonplace product can succeed in finding a place in the market. Create enough sales leads and me-too products have a place. If your product is superior, you’ll do even better. My advice:
- Spend at least 5% of annual company revenues on marketing. Less than that and you will have mediocre success (and only the mediocre are always at their best). Software companies and others will spend upwards of 20%.
- Hire the best lead generation marketers you can find. Nothing else will do.
- Use the 10-to-1 Rule. Create at least 10 unqualified inquirers for every product you must sell, or…
- Use the 4-to-1 Rule. Create at least 4 qualified inquirers for every product you must sell.
- Make CRM use a requirement.
- Require marketing automation to manage demand when you get above 200 inquiries a month.
- Make 100% follow-up of all sales inquiries by someone (salespeople or via the marketing automation program) mandatory.
If you do these seven simple functions you will get the market share you deserve, and maybe even some market share you don’t deserve.
This blog was submitted by James Obermayer, Executive Director and CEO of the Sales Lead Management Association and President of Sales Leakage Consulting. James is a regular guest blogger with ViewPoint.
iThis is a rephrase of the famous quote from Henry Ford who said, “A man who stops advertising to save money is like a man who stops a clock to save time.” – Henry Ford