There was a great post last month from Steve Blank and his aiding a friends’ startup company that was having execution issues. The discussion primarily centered on the unhealthy relationship between sales and marketing in the company. While that wasn’t the immediate topic of his post, I had immediate resonance with the reasons that each individual was attributing to the lack of progress in getting customer traction. Let’s review some of the main issues Steve uncovered in his time with the company.
(1) The Sales team says the problem is marketing – that messaging is all wrong. This is a typical scenario at software companies. Marketing builds a thorough set of slideware and marketware to support the latest product. Sales takes the information, tweaks it to meet what they think their needs are – so you wind up with several different versions of the corporate deck, none of which sound the same.
Where is the feedback loop that gets this information back to marketing? Why is it marketing’s problem that they develop collateral, share it with sales, and then don’t get feedback? Where is the analysis of what is working and what is not, so marketing can determine what’s repeatable?
(2) Friends and family business can be a killer for a company. The problems with making sales to people you already know is it flies in the face of figuring out what about your product generates a repeatable sale. Selling to friends is not scalable or repeatable to a degree that leads to corporate success. Steve is absolutely right – these deals typically get in the way of what marketing and sales need to focus on in the medium to long term. In addition, sales will push the success agenda on marketing, where it’s not clear what the compelling event was (other than the sales rep has a good reputation there). This is wildly counter-intuitive, and hard to manage, but critical to get right. Marketing and Sales should be collaborating regularly about what is repeatable and actionable on every sale, especially for the first 20 customers.
(3) Nationwide Sales Force – why do we always do this? Let’s put a rep in the major cities across the US to get nationwide coverage. Ok, but where does your product fit? If it’s for financial services, having an office in Dallas or Denver doesn’t really make sense. Many of the companies I’ve worked for had a strong East Coast presence –primarily because a large percentage of our target customer base was based there – as Sinatra used to say “if you can make it here, you can make it anywhere” – so whether it be New York, or Boston, Atlanta, Des Moines – figure out where your target audience lives and get as close to them as possible. Once you’ve created the repeatable sale, then branch out with the “cookbook” to win new business in new markets/cities
(4) Why are Sales and Marketing considered two different functional areas? There always seems to be an unnatural friction between the VP Sales and the VP Marketing. It should be the other way around – these two should be tied at the hip and made partners in the company’s success. I’d love to see a comp plan for the VP Sales and VP Marketing where they both get commission only based on repeatable sales – this would reduce the Sales team elephant hunting and not focusing on repeatability, and would reduce the Marketing team from thinking “big picture” without involving sales as a partner.
Bottom line – sales and marketing must be partners to create success at a startup – not conflicting groups. CEO’s should be thinking about incentive plans that strongly encourage these two groups to work closely together and create a feedback loop that ensures quick action based on results in the field and desires at corporate.
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