Tom Wilson's Marketing Blog

The Sales and Marketing Myth

Hi there!

I've created this category called "Sales and Marketing" because I want to get this subject out of the way. This will be my only post covering this issue. That's because this concept is a myth, and I'll explain why. 

Sales and Marketing is the term that people commonly use to describe the selling function of the business. But it's wrong. It suggests that "sales" and "marketing" are distinct activities, or they are equal activities. They're neither. They're the same thing.

The best way to describe selling in any business is to use only one word: marketing. Marketing is the business function responsible for bringing in the sales.

I'll give you an example. I've been providing marketing support services since 1999 and went to visit a new client. As we talked, I was trying to edge him towards marketing, when suddenly he turned on me. "Look", he said. "I've enough problems with sales; don't bother me with marketing!" Actually, that didn't faze me. It was a response I'm used to. His sales team were well short of targets, and the firm's sales were actually falling. What he was planning to do was fire the entire sales team, but as we talked things through, he calmed down. It took some time, but eventually I proved to him that the cause of his selling problems wasn't incompetent sales people. It was poor marketing.

For instance, he provided no direction to his reps on the sorts of markets to target, nor on the types of customers that they should be looking for. As far as he was concerned that was their job, and it meant that they wasted lot of valuable time on barren calls. He had no systems for finding out what customers actually wanted, or what they thought of his products, so he couldn't be certain that he was arming his reps with the most saleable goods. Or if there were products that were more popular that he could be offering. All these are the functions of marketing.

I also discovered that two of his competitors had recently slashed their prices. Again, he had no marketing strategy to deal with this.

So, the point I made to him and I'm making here is that the key to successful sales growth is to think marketing. And learn how to use and apply marketing in your business. Otherwise, you will have a real problem with "sales".

When Advertising can be the Wrong Strategy

In small business marketing books and articles, one of the first things you're told is to get out there and advertise your products or services. Even if you're not told it, as a non-professional marketer you tend to assume that this is the right thing to do.

Wrong. Of course, there are times when it's proper for you to advertise, but think carefully before embarking on any advertising expenditure. Advertising is costly. It can quickly eat up your limited resources. And it's not always effective. In fact, in many instances it can be entirely the wrong strategy for you. There are plenty of other cheaper, even free, marketing strategies that might prove much more effective.

To find out more about "When Advertising can be Bad News for the Small Business", read my complimentary White Paper on the subject.

This will help you decide if you want to use advertising and if it's relevant to you.

The Difference between “Market” and “Marketing” Research

Hi there!

People regularly confuse the terms "market" and "marketing" research - even people who ought to know better. In this post, I want to explain to you the difference between the two.

Market research refers to investigating a particular market. For instance, you might want to look at the market for children's clothes or the market for dog food. Market testing a product, consumer attitudes, or finding out how people intend to vote at an election would also fall into that category. In other words, your research is singular and focuses entirely on your chosen market.

You might use market research if you are a new business and you want to find out if there is a market for your idea. You might also use it if you intend to launch a new product or service.

Marketing research, on the other hand, is much more comprehensive and it deals with the whole marketing process. You would apply this, for instance, when writing a marketing plan. The areas this covers include: the wider world around you (macroenvironment); your markets; competitors; customers; and your own business. From the information you gather in that research, you would develop a SWOT Analysis.

You'll see that I've included "your markets" in this list. This would involve market research. However, when your focus is marketing research, you would not normally analyze your markets to the same depth as you would when conducting market research.

If you want to find out more about market and marketing research and learn how to conduct these on your own, check out my Learning E-Manual: "How to Write a Marketing Plan for the Small Business".

The Role of Advertising in Marketing

Hi there!

I can't tell you how many times people have said to me either that marketing is advertising or that  marketing and advertising are separate functions. On other occasions, I've seen advertising listed alongside marketing, suggesting they have equal status. None of these positions is correct.

Marketing is the business function that's concerned with selling. It covers every aspect of selling, amongst other things from: deciding what products or services to sell; who to sell them to; what prices to charge; the channels to the end user; and how you will sell your products and services.

Advertising comes into the last of these categories. Advertising is a selling strategy. And it's by no means the only selling strategy. Others include the likes of PR, sponsorship, trade shows and exhibitions, sales promotions, networking, personal (field) selling, direct mail, and so on.

What's more, there are various situations in which you would not even consider using advertising as one of your selling strategies. For more information on that, read my Complimentary White Paper: "When Advertising can be Bad News for the Small Business".

So, let's keep "advertising" in its marketing context.

Unlock Your Top 20% of Customers for Sales Growth

Hi there!

I got an e-mail in response to one of my previous posts about the "80:20" rule, which states that you should expect that 80% of your sales will come from around 20% of your customers. The e-mailer asked me to develop the significance of this a bit further.

Your top 20% are your key customers. As such, these are your best bet for getting additional sales. These customers know you. They trust you. And they already buy from you in quantity. Thus, they will be more receptive to any offers you make.

So, make key customer management one of your major strategies. Look after these customers. Court them. Unlock the potential they offer you for increasing your sales.

There are lots of marketing strategies you can use to get more value from your key customers including: up-selling, cross-selling, offering packages, bundles, retrospective discounts, and so on. If you want more suggestions, check out the free marketing ideas, strategies and tips on my website.

In addition, read my Complimentary White Paper: How to Deliver Exponential and Sustainable Sales Growth to Your Small Business

By the way, thanks for the e-mails in response to my posts. I'm delighted to receive these.

The AdWords Virtuous Triangle

Hi there!

I've just finished giving a training course on Online Marketing Strategies. One of the questions that came up concerned Google's so-called "triangle", which applies in PPC advertising using AdWords. Let me explain how this works and why you must be aware of it.

Google makes its money from PPC. So, it needs delighted customers who will come back and use their services again. To achieve that, the customer has to feel that Google is giving them what they want.

And what they want is for their search results to provide the answers they're looking for – accurately and instantly. To facilitate this in AdWords, Google looks for three things to be in sync: the key words the customer types in; the relevance of your advert to those keywords; and the landing page you set up for the advert.

The second point on this virtuous triangle means that your ad has to contain the key words that the user has typed in, preferably in the heading and at least once in the body copy.

The third point means that the landing page has to match the text used in the advert. For instance, if you're advert is about lawnmowers, your landing page has to be about the identical subject; there's no point in sending visitors to your About Us or Home pages. Google's spiders will actually visit your landing page and check out the language to make sure that it meets the criteria.

And the more you can bring these three points into sync, the more this will benefit you. How? Google will reward you with a higher position on the page. And you won't have to pay more this. In fact, some of the people lower on the page may even be paying more than you – because they're approach is not as focused or as relevant as yours. And thus theirs is less likely to delight Google's customers.

Even the Small Business Needs to Follow the 80:20 Rule

Hi there!

My website offers low cost professional support services to the small business by telehone and email and I asked one of my clients to do a customer analysis. Her email reply expressed concern: "Tom, I'm shocked. Nearly 80% of my sales are coming from only 20% of my customers". "Don't be shocked", I fired back, "that's exactly what I wanted to hear".

When you analyze your customer base you should find a similar ratio. Let's say you have 1000 customers and sales of $1M; 200 customers should be providing $800K, while the other 800 will give you the remaining $200K.

This is called the "Pareto Rule", which says that 80% of the output of anything will come from 20% of the input. And it really does work in business situations.

What's the significance if you find that it doesn't apply to your customer base? 

Let's say that 10% of your customers provide 80% of sales. This means that you're over-reliant on too few customers. This is a warning sign. It makes your business vulernable in the event that you lose one or two of these customers. So, you must take action to bring the ratio back into balance.

On the other hand, let's say it goes the other way and that 80% of your sales come from 30% (or more) of your customers. This is also bad news. It means that you're having to deal with too many small customers. And this pushes up your costs. Remember: it often costs as much to service a large customer as it does a small one. So, a ratio of this nature hits your profits.

Why not consider abandoning the 80% who only give you 20% of sales? Don't bother. The Pareto rule will still kick-in, so where do you stop.  Anyway, a small customer today could become a large one tomorrow.

One more point I would make about your customer analysis. If you find that any single customer gives you more than 20% of your sales, beware. This is unhealthy as it means you could be in serious trouble if that customer stops buying from you. And the higher the proportion of your sales he has, the greater the danger you are in.

How to Win Back Former Customers - Free Podcast

Hi all!

Reactivating past or non-active customers is a well proven way to build your business. It's also one of the simplest and cheapest strategies to implement. Yet many small businesses seem reluctant to pursue it.

Why not listen to my podcast on this issue. You'll learn why people leave; the most effective ways to go about contacting them again; and what to say to persuade them to start re-buying from you.

The podcast runs for about 10 mins.

When you visit the podcasts page, you'll also find a number of other free small business podcasts that should be of value to you.

Free Help with Small Business Marketing

Hi, there!

If you're a new or small business and you want lots of free help with small business marketing, please visit my website.  This help includes: news and help articles, small business white papers, podcasts and quizzes. And you never have to buy any of the commercial products or services that the site also offers in order to access the complimentary material. This material is being updated constantly and you can even subscribe to our RSS feed so you get it delivered to you automatically.

In addition, we have commercial products that include a marketing plan creation program, learning e-manuals and professional support services. You don't ever have to buy any of these products to enjoy the free help material.