The Marketing vs. Sales difference is a crucial one for all businesses to understand. To simplify:
Sales is trying to sell what you have.
Sales followed from the production era where in the early part of the 20th century, entrepreneurs like Henry Ford famously produced only one color of car (black) and could bring down the price to $260 for the Ford Runabout in 1925. Pictured above is the 1915 model priced at $390.
Marketing on the other hand is much more recent (1950’s and 1990’s) and has a simple idea:
Marketing involves coming up with something that customers need and/or value.
If you can do that, it will sell itself.
See the formal American Marketing Association definition of marketing. Pictured above is the iPhone 6s plus for which, some segments of customers happily pay $749.
So why is it that sooner or later even the most innovative organizations become more about sales and less about marketing? Here are some thoughts:
- What is of value today, will change tomorrow: Not to be confused with ethical values like honesty,integrity etc. here we are thinking of “value” in marketing terms. Are there products and services that we value today that we did not value yesterday and vice versa? For example, would you pay $4000 for a laptop computer today that you paid 15 years ago? It’s hard for the computer industry to re-invent itself and provide a high perceived value. With the exception of Apple computers, though that has only 7.8% of the market. All other computer makers seem to be focusing more on selling.
- Locked into technology platform: Once you start finding customers, you keep improving your product to meet your customer’s value perceptions. The more your production process improves you lock in people,machines and processes to do your stuff flawlessly. Very much like Henry Ford and his black car that became less than one-third of the introductory price in fifteen years.There is simply too much invested in the platform including low-cost overseas manufacturing today. You end up selling what you have.
- People resist change: Employees resist change even when they see that they can do better with customers by changing their offering. Explaining a change and innovation process upfront can help. It’s hard to get your people to change – so just try to sell what you have.
- Segmentation of customers and employees by innovativeness: Some customers tend to be OK with the old. For example, we know people who are still using Windows XP and don’t see a reason to change. Better segmenting customers by innovativeness might be a good approach. The innovative customers are demanding something new, and there are employee intrapreneurs willing to try something new. Matching innovative employees with innovative customers might be a way to stay ahead of the marketing curve.
- Disappearing information asymmetry with the Internet: Information asymmetry where the seller knows more than the buyer is disappearing fast with the Internet. You can check prices on almost anything online from your cellphone. Thus, it’s hard to sell anything unless you have (a) a competitive price and (b) enhanced value. Value could be a great return policy, training, free trial or what matters to your client. Sales must assume that the prospect has Googled your offering while Marketing needs to figure out what exactly is the unique value being offered.