Many small business owners struggle with knowing where to allocate their time and resources. One issue we hear about a lot has to do with sales and marketing—which is more important?
The short answer is that both are important, but what we’ll look at today is the relationship between the two and how the industry your business is in has a lot to do with knowing which one deserves more of your time.
Clarifying the difference between sales and marketing
To ensure that we’re all on the same page, let’s begin with definitions of sales and marketing.
Marketing generates leads. Marketing communicates with the prospective market and works to turn them into qualified leads.
Sales turns leads into revenue. Sales starts where Marketing ends. It takes the leads generated by Marketing through a consistent process and converts them into revenue.
You’ll notice there is a distinction between the point at which either function picks up with a prospect and leaves off. Marketing is responsible for generating leads—casting a wide net to raise awareness—while sales is responsible for generating revenue—working with a warm lead. Marketing is where business development begins, while sales is the process of turning a lead into revenue.
You can’t have one without the other, which is why collaboration between the two functions is so important. Even in a very small business, though, when you have one person responsible for both, it’s helpful to separate the two different purposes.
Marketing can take a person who is completely unaware of a product or service and get their attention. They can educate the person on the benefits of the product and the problems that it solves. The more interested a lead has become in a product, the better the odds are for sales to turn that lead into revenue.
If sales is spending its time making cold calls to people who have never heard of the product, it’s not performing its function. Ideally, marketing should be handing off warm prospects to sales, who will then take that lead and successfully close on it.
Where should I focus my efforts?
The amount of time spent generating leads versus converting those leads into revenue will depend on the type of business you run. Businesses that provide consumer goods tend to have a heavy focus on marketing. Think of an ice cream shop or clothing boutique, where more than half the battle is getting a prospect through the door. The effort put into sales at that point will vary, but the product (ice cream or clothing) is not a complicated one and the prospect already has a high degree of familiarity with the genre.
Businesses that have complex products or services, or are selling high ticket items, tend to be more focused on sales. An insurance company, for example, will spend a significant amount of time educating a lead about their products, putting together quotes, and helping them choose the best package. Or a landscaper who is helping a homeowner design a new backyard will create a proposal for the project after discussing many different possibilities.
While it’s important to know which area requires more emphasis in order for your business to succeed, it’s equally important not to neglect the other area. Businesses need both sales and marketing, and ideally, they will work closely together to generate leads and convert those leads into revenue.
Marketing and Sales are two components of Business Development Structure, one of the 11 elements of an exceptional business. Visit the Element Guidebooks page for more information on this essential book series for small business owners. To speak with a Certified ReWilder about how to bring Business Development Structure to your business, click here.