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Business Leader’s Library. Volume 3:

Sales and MarketingThe quality of your business’s sales and marketing will define its success, but too few SMEs have a well-executed strategy in place

Foreword

The recipe for business success is deceptively simple. First you need to

make sure more prospective customers know about the high-quality, value-for-money products and services available

from your business. Then you need to turn those potential customers into real ones who will buy what you’re selling.

That’s another way of saying that the quality of your sales and marketing will define your business’s future – the extent to

which it is able to grow profitably. And that’s why it’s crucial that business leaders set out

clear strategies for sales and marketing, with a well-defined plan of execution and measurable

targets. Unless you’ve thought about where your revenues will come from in the future – and how

to secure them – how can you be confident that your business will flourish and grow?

While sales and marketing may start from the top, it’s important to recognise that they should be

priorities for every single area of the organisation – and not just sales and marketing. Everything your

business does represents an opportunity to enhance its quality, establish its reputation and drive more sales.

That means all employees should be signed up to the mission to improve customer service.

Steve Gilroy, CEO

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Business Leader’s Library. Volume 3:

Sales and MarketingThe quality of your business’s sales and marketing will define its success, but too few SMEs have a well-executed strategy in place

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Business Leader’s Library. Volume 3: Sales and Marketing 54

Official statistics show that several hundred thousand businesses are launched in the UK every single year. The bad news is that over half of them are unlikely to survive beyond five years. Even fewer will make the transition from SME to large company – the number of businesses breaking through into higher revenue brackets has actually been decreasing in recent times, according to the bi-annual Barclays and Business Growth Fund (BGF) Entrepreneurs Index.

One of the reasons for this is that too few businesses think critically about their sales and marketing strategies. They take a scattergun approach with little forethought about their activities, or they only begin to focus on sales and marketing when they’re already in a position of weakness – because sales have started to sag, for example.

True marketing-oriented businesses have a sharp focus on what their customers need right now and what they will need in the future. They engage in activities that will

increase the number of customers turning to them to satisfy those needs. And they meet that demand by demonstrating the value their products and services will deliver.

Get it right and your marketing efforts will consistently generate new leads that your sales team can convert into additional – and often recurring – revenues. But that requires a commitment to strategic direction. A recent McKinsey research report found that 45% of fast-growing companies invest a high proportion of their sales budgets on long-term goals, half spend much more than average on training their salespeople, and two-thirds of the most successful businesses have undertaken a major performance review over the past three years.

The Problem - Why Sales and Marketing Matter

45% of fast-growing companies invest a high proportion of their sales budgets on long-term goals.

McKinsey

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Two-thirds of the most successful businesses have undertaken a major

performance review over the past three years.McKinsey

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How, then, do you move towards a more strategic focus on sales and marketing in your business? There’s no one-size-fits-all solution, but with our four-step approach to formalising your activities, your business should be able to make substantial improvements:

1. Audit

Your starting point should be to understand in detail what sales and marketing activities the company is currently engaged in, how those activities are being undertaken, and what results they are achieving. Until you know where the company currently stands, you can’t begin to think about how to take it forward.

Part of this process will be to address the question of resources. Not all businesses have standalone sales and marketing functions – your company may not yet have grown to a scale that would justify

these, for example. Either way, look at whether you currently have the right level of expertise internally to execute sales and marketing strategies effectively. Do you have professional marketers, for example? Are your sales teams well trained and well supported? Where there are gaps you are unable to plug internally, it may make sense to hire an external consultant.

It’s also important to understand whether the external view of your company reflects the efforts it has been making so far. Talk to customers, suppliers and other stakeholders about their impression of the business – what it does well and where it is less effective. Do those stakeholders have a clear vision of what you stand for? Are they inclined to do more business with you in the future?

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The Solution - How Do SMEs Approach Sales and Marketing More Strategically?

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2. Strategise

Based on the results of your audit, you can begin to put a sales and marketing strategy in place.

This should begin with the customer. The biggest mistake many SMEs make is to concentrate all

their energies on talking about the benefits of their products and services, rather than trying to find out

what customers actually need. No matter how good your company’s offering is, you won’t be able to sell it to a customer whose needs it doesn’t meet.

Your sales and marketing strategy should therefore start with rigorous market research. Use feedback mechanisms

such as customer surveys, customer complaints, face-to-face conversations, industry research and trade publications to dig deep into what your customers are buying, when and

how, and what they will look for in future.

The exact questions you ask will depend on your business goals – for example, are you looking to sell more of your

existing range or move into a new product area? Is the current market large enough to support your growth ambitions? But

your aim should always be to understand what existing and potential customers need, how and where they will buy it, and

what they are prepared to pay.

Your sales and marketing strategy then becomes a vision of how you will respond to your customers in the short, medium and longer

term. It enables you to prioritise those areas of the business that are well aligned with the marketplace and to develop the business in

areas where customers’ needs aren’t being fully met at present.

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3. Implement

The implementation stage requires to you to translate your marketing strategy into a plan of action that you will then execute. This plan has to be communicated clearly to the entire business, so that everyone understands their role and responsibilities. It should set out specific and measurable objectives, with targets that you will use to measure progress over time. These might include, most obviously, sales targets, but other metrics are important too – lead generation, number of new customers, average transaction value and so on.

The plan should also set out how you will communicate with existing and potential customers. One effective way to do that is to build a schedule for the year that identifies what you will do during the most significant trading periods. That might be Christmas for some companies, say, but the summer months for others. Focus your sales and marketing efforts accordingly, but don’t go completely silent during quieter periods – you should be communicating at all times.

Think carefully about the format of communications. This might include general brand awareness exercises such as public relations and advertising, as well more specific

campaigns using direct marketing tools. Think about the mix between digital and traditional forms of communicating, but don’t neglect face-to-face contact. Where you have large accounts with key customers, pay particular attention to how you will manage them.

Meanwhile, your sales and marketing plan should also span broader work. New product development should be in the mix. So too should your distribution network. Also, plan when you will conduct training, particularly for sales teams.

And do your processes and technology support your sales and marketing efforts – do you need a new customer relationship management (CRM) system, for example?

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4. Control

Unless you monitor the success of your sales and marketing closely,

you can’t be sure that it’s achieving the results you hoped for. Look at

the extent to which the business is reorienting itself towards the strategy

you have developed, and evaluate whether you are hitting the targets on your sales and marketing plan.

If you’re on target or ahead of schedule, you may want to recalibrate your sales and

marketing efforts to make the objectives more ambitious. Alternatively, if you’re falling short, look at why this is – the original goals

may have been unrealistic, for example. They might still be achievable with new priorities –

more training for the sales team, say, or a focus on one particular communication method that is

paying off.

The most important point here is to create feedback loops that keep you constantly informed about the

progress your company is making. These should span both the internal performance monitoring

you undertake, and also external feedback. Look for informal feedback from customers and other

stakeholders, but also pay attention to specific metrics – the net promoter score, for example, measures how

positively people feel about your business.

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Tony Altham, the Managing Director of AdGiftsOnline, launched the promotional merchandise company with his wife Stephanie, and was initially very successful. But when the recession hit in 2007, the company lost a number of key clients and Altham began to regret his lack of experience in sales and marketing. “Our conversion rate dropped from 40% to less than 10% and our gross profit margins plummeted,” he recalls. “We struggled badly and I didn’t have anyone else that I could talk to about the business”.

Part of Altham’s response was to join Vistage, the peer group mentoring and coaching organisation that puts business leaders together to share and resolve common problems and challenges. While he lacked experience in certain areas of the business, other members of his group were able to offer crucial advice. “I felt all of a sudden I’d found an environment where I could talk openly about my business in confidence with a peer group who could advise me,” he says.

Having taken on board this advice, Altham developed a new sales and marketing strategy that soon paid off, helping AdGiftsOnline to win a number of sizeable new clients. The business survived the recession and continues to prosper. In 2014, the company grew by 60%, in 2015 the number of employees more than tripled, and further strategic development is now planned.

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Case Study - AdGiftsOnline

In 2014, the company grew by 60%, in 2015 the number

of employees more than tripled, and further strategic

development is now planned.

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If you’re ready to start developing a more coherent sales and marketing strategy and plan of execution for your business, consider the following action points:

• Identify routes to understanding your customers better – What exactly is it they want from the products and services you offer, or could offer?

• Look at the market in which you operate – Consider factors that are beyond your control, ranging from the state of the economy to the availability of staff.

• Consider your competitors – Think about what they do now compared to your business, and how they might respond to your efforts to improve sales and marketing.

• Evaluate strengths and weaknesses – Include the views of employees, customers and other stakeholders in your analysis of what the business is doing well, or not.

• Focus on the “four Ps” – Look at your product, develop a pricing strategy, plan your promotions, and don’t neglect place (how you distribute).

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Our Recommended Action Points for Business Leaders

• Address resources – Do you have the right people, processes and technologies in place to execute your sales and marketing plans? If not, consider investments such as training and IT renewal, while focusing on those areas where the return will be greatest.

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Sales and marketing success will make or break your business’s future so

you need a strategy for growth.

Too few SMEs put an understanding of their customers’ needs at the heart of their sales and marketing strategies.

SMEs must monitor the progress of their sales

and marketing strategies closely - and recalibrate if

they don’t achieve their targets.

Takeaways:

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