Marketing isn't advertising.  Selling isn't the same as marketing.  And advertising isn't selling.  But no matter what your company does, it needs them all – at least in one form or another.  Based on observing and working with lots of companies, this is easier said than done.

Most companies – and, indeed, most entrepreneurs – readily recognize that effective marketing, advertising, and selling are critical to the success of a venture.  Yet once this importance is acknowledged, there appears to be little parallelism in the way these three critical functions are actually implemented.  In fact, there appears to be great divergence in the way these three critical functions are even defined.  The differences are not explained simply by different companies (with different objectives) coming up with appropriately different strategies.   In many instances, young companies seem confused or just plain inaccurate (this means "wrong") in the way they understand these three critical functions.  This mini-paper is intended to provide a few quick insights about the linkages between marketing, advertising, and selling.

Advertising ABCs.  

"Our company would really love to do more advertising but we don't have any money."  Too many companies say this because they allow themselves to get into the situation where it is the truth.  To put it in perspective, imagine an advanced technology company saying "We'd really love to offer products for sale but we don't have any money."  The company would simply not be viewed as credible.  No matter how small or how new, companies that are worthy of commercial success in the marketplace are expected to have some level of advertising built into their normal operating framework.  Here are the three most basic realities of advertising:

1   Each industry and product group has evolved a well established ratio between annual advertising expenditures and targeted annual sales.  If a company wishes to sell $1 million of product next year, then, to be at parity with competitors in its own product class and market, the company must have an advertising budget that is equal to some knowable percentage of its annual sales target.  The ratios for a wide variety of product classes are reported annually by Schonfeld & Associates (www.saibooks.com; 800 205-0030) and are published in Advertising Age (go to the commercial or business section of a library or contact a savvy ad agency); 

2   When a new product is being introduced into a given market, it is normal for a company to spend more than the ratio that is typical in that product class (i.e., instead of an advertising budget that is equal to X% of targeted sales revenue, the product introduction may require a launch budget of 1.2 x X%); 

3   If a company is not already an established player in a given market (i.e., if it has no "brand equity"), it is often necessary to spend a multiple on top of the special product introduction ratio in order to gain visibility and market credibility (i.e., instead of spending 1.2 x X% of targeted first-year sales revenue on advertising, a new company with a new product may have to allocate an amount equal to 1.5 x X% of its targeted first-year sales).  This is a specific instance in which advertising is marketing

To make matters somewhat more problematical for young companies, the money that must be allocated to advertising must all be spent "up front," i.e., prior  to the realization of sales.  (Hey, I didn't invent these tough realities; I just promised to report them to you.)  The concept of "promotional cash flow" is shown in Exhibit 2.

Advertising is the process of communicating information to your targeted customers.  The content of what is communicated – product features, benefits, value statements, reasons to buy, who's behind this wonderful company, your 800 number, pricing, competitive comparisons, your pretty logo, your distinguished customer list – are all variables that can be used and combined in various ways depending on your program and overall strategy.  What is essential is that each company communicate to appropriate potential customers.  Everything else  about  the  advertising  function  is details.   The  need for the advertising  function is absolute.   Advertising cannot be ignored (or deferred until cash flow magically picks up because the company sees the virtues of its product as "virtually self evident").

Want some other ideas about advertising?  Exhibits 1, 2, and 4 (back cover) are taken from the May 1995 Workshop on Advertising held by the Entrepreneurs' Forum of Greater Philadelphia.

Exhibit 1 10 ways that Advertising issues play a pivotal role in your venture from Day 1 Develop a product with specific utility – functions, features, and potential benefits that are relevant for an identified set of potential users. Identify such users as specifically as possible – in the form of an actual means for reaching them – names, titles, addresses, phone numbers, common "events" where you and they can be face-to-face, either individu­ally (an in-person “call”) or collectively (an industry conference) or through some intermediary (direct mail letter or via print-media or other types of advertisement).  Truly understand the issues that your intended users see as “hot.” Relate those issues to the functional capabilities of your product and then back to the potential benefits that users would realize if they were to start using your product. Figure out pricing and terms.  Figure out any additional “collateral” to be associated with selling/purchasing the product (added benefits, incentives, etc.). Communicate the simple facts that the product exists and that it is available for purchase and is ready to use immediately. Help the targets identify their own situation with the characteristics of the product.  Motivate the targets to take some type of pro-active action (calling for more info, calling you to chat, inviting you to come see them, inviting you to call them, showing up to participate at an “event”).  Ask for the order.  It's amazing how many companies never actually ask their targets to make a purchase decision. Design and implement your sales follow-up program (1) to cement this present sale, (2) to establish that your company is the solution source (to support future sales opportunities), and (3) to get referrals and personal introductions to other likely sales candidates.

Marketing What?  

Let's start with the bad news about marketing:

"Just because you can market doesn't mean that you have automatically found a real market."

"Just because you have identified a real market, doesn't mean that you can market effectively to it."

As a concept – even as a function – marketing is so... well, so squishy.  Right?  "VP of Marketing."  Yeah, sure.  What do those people really do all day?  Good golfers, I suppose.  OK, so that's not the story.  But what is?  Everybody knows that marketing has something to do with advertising.  In fact, they are often lumped together ("marketing" is erroneously substituted as a more highfallutin term for "advertising").  But the two are truly different functions. Marketing is the broad process of getting your company positioned so that the messages and content communicated by its advertising will then be (1) received positively and (2) understood accurately and (3) accepted as valid.  Those three steps are related but they are each distinct.  If this still sounds fuzzy, re-read the paragraph and think about it before proceeding further.

 

 Although the process of marketing may be diffuse and although the actual techniques of marketing widely differ from one company to another, the objectives of marketing remain remarkably constant.  Trade shows, authoring papers, and attending industry meetings, making speeches, serving on committees, and community projects can all be part of a marketing program.  Making your entity visible in a positive setting is the key concept behind marketing.  Marketing is not selling or advertising your specific product or service.  Each of those functions must be budgeted and pursued in its own terms.  Marketing is different.  For example, by writing this paper I am engaged in marketing the entity with which I am associated.  I am specifically not advertising the activities of the entity nor am I selling you anything.  Notice that the content of this paper has nothing directly to do with what my particular organiza­tion does as its business activity (i.e., investing long-term equity capital in promising young ventures).  However, you, as the reader, end up able at least to form some initial attitudes about my organization as a result of reading this paper.  The way I write and the way I handle ideas provide you with a basis for forming certain expectations and attitudes about my organization.  Hopefully, these are positive.

Both the message content and the methods of marketing are different than the message and methods used in adver­tising.  Both functions are critical to success.  But they are different.  For more information about Marketing, the Entrepreneurs' Forum of Greater Philadelphia offers a paper called The 4-1/2 Marketing Issues that Entrepreneurs Absolutely Must Get Right.  For more information, contact the Forum.

 

Job Hunting 101:  A Model of the Selling Process When the "Product" is You   In the National Business Employment Weekly, the best single article I ever read about finding a job began with a paragraph containing 100 words.  The first 99 were “no” and the 100th word  was “yes.”   The article went on to explain that this paragraph is a model of the job-hunting process. It also struck me as a model of the selling process and of pursuing lots of other novel things worth achieving.   The article’s author observed that most job-hunters mistakenly develop a “conservative” strategy that they believe to be more “efficient” and respectful of their limited time, their limited energies, and their finite resource.  But if their goal is to minimize the elapsed time required in their search process, then, paradoxically, their strategy turns out to be exactly the opposite of what they should be doing.   After a handful of enthusiastic initial “try-everything/respond-to-every-opportunity” efforts, most job-hunters say to themselves something like “Hey, this is nuts.  If I focus my resources on qualifying oppor­tunities more thor­oughly before I present myself at the door, I should be able to increase the probability of being successful and really ending up with something that represents a good ‘fit’ for my skills and interests and the way others are likely to see me as an asset.”  Flawless logic; lousy outcome.   Job-hunting involves a process that satisfies all the criteria of being a complex system (multi-variant, fluid interaction, not all factors being knowable; most factors being well beyond the control of the “central” player, i.e., the job-seeker).  It is axiomatic that complex systems function counter-intuitively.   Given this insight (taken here on faith), it follows that one does not want to attempt to focus on a specific type of situation or attempt to pre-qualify any particular opportunity (what-the-hell are you really going to be able to find out beforehand, anyway?) or even (dare one admit it to oneself?) try to avoid being rejected once again.   Because you cannot, by definition, have any meaningful information about just how long the search process will take (absolutely the only thing you can possibly know with any certainty is that when you have found the right “fit” the process will be over), it follows that your only sound strategy is to attempt to get rejected as frequently and as rapidly as possible.  Your “success rate” at being rejected consti­tutes the only bona fide measure of your making true progress in the search process.   To grasp what this means, start filling out the chart on page 6 (99 “No"s followed by that lovely “Yes”).  If you use this as a log of your activities and as a guide to your strategy, it will also serve, auto­matically, as an index (and as a concrete indicator to you) of your actual progress.  Trust me.  It changes your whole outlook... makes you think straight... turns you into a creative strategist again.  And if you hit a rough spot along the way, as Miles observed to Joel in Risky Business, sometimes you just gotta take a break and say “Screw it!  Ya know?"                                                                                                                                                                                            This "model" of the job hunting process applies to "regular" selling as well (see Exhibit 3 on page 6)

Selling (and Silence).  

"By the book."  "Buy the book."  Look, this isn't subtle.  But, in truth, one of the most effec­tive lessons about selling I ever gave myself came from a paperback book (bought at a school garage sale for 10¢) authored by all-time champion car salesman Joe Girard.  A car salesman for gosh sakes!  He is a master.  It's amaz­ing how many people who have successful selling careers sit down and write a book about what works and what doesn't.  It's very approachable reading.  And such books are easily obtainable at most "mall" book chains, at any library, or at the famous How-To-Do-It Bookstore (1608 Sansom Street, Philadelphia, 215 563-1516).  There are courses on selling (various community colleges, Wharton, St. Joseph's, Villanova, etc.), a steam of programs and events each year (the Entrepreneurs' Forum, SCORE, the Philadelphia Top 100™ Conference, among others), and ongoing coverage in the business press (daily local papers, Business Week, and trade publications, for instance).  If you realize what you're seeing, it is virtually impossible to escape the flow of free or almost free information. The texts on effective selling (i.e., the formal books) provide the step-by-step instructions.  The press coverage provides the examples and the anecdotal information.  Also try to pick out a couple of individuals (maybe one in your field of another from out­side the field) and ask about their "best practices" when it comes to selling.  And then pick out what seems to be applicable to your specific situation.  Hint: just because something worked for their personality with their product (or service) in their market situation with their targeted prospects does not automatically mean that it will be appropriate or effective for your product (or service) in your market situation with your targeted prospects.  Think.  To be effective, be selective.  You have to go get the detailed how-to-do-it information for yourself.  The sources sug­gested above will get you headed in the right direction.  Sorting out and applying the information is up to you.

Here's the big picture:  Selling is the process of converting prospects into actual paying customers and maintaining them as customers.  Since it can cost four times as much to acquire a new customer as it does to maintain the equiva­lent revenue production from an established customer, finding the right resource allocation that will preserve your base and grow the company at the same time is very, very important.

 

Here's Collison's No. 1 Rule for Effective Selling: 

"Selling" isn't happening when the salesperson is talking.

 "Selling" is actually happening when the prospect is talking.

 

Therefore, effective selling presentations move to a conversational format at the earliest possible moment.  Effective presentations are often based more on posing issues and questions and less on conveying lots and lots of information.  "Selling" is not about content.  It is about finding a "fit."

 Finally – and this is the hardest part about selling – here is a reminder about making the selling process truly effective:

" ? "

That humble little punctuation mark denotes the end of a question.  For example.....

 

"How can I help you?"

or

"What is bothering you about your current situation?"

or

"What is your company trying to accomplish?"

or

"Would it be meaningful to shave 20% off your current processing time?"

or

"If you could increase throughput by 8%" what would that be worth to you?

or

Given Options A, B and C from us, which one would best serve the needs here at your company?

or (even)

"Are you in position to place an order today?"

 

The question mark means (or should mean) "Shut up and listen!"  Once the question mark is reached, then no matter how long it takes your prospect to begin speaking, whatever happens next is likely to be pure gold.  Listen.  And think very carefully about what is said (and the way it is said).  And then respond to it.  You will be amazed at the up-tick in your selling results.

         Exhibit 3: A Model of the Real Selling Process   - No ultimately means Yes  (APPLIES TO SELLING YOUR PRODUCT.... OR TO SELLING YOURSELF)

...it out... ...‘em off          Go meet José*   When the going gets tough~ etc...

	No	no	no	no	NO	no	No	No	no	NO
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	no	no	no	NO	no	No	No	no	no	no
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	no	no	NO	no	no	no	no	NO	no	No
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	No	no	no	no	NO	no	No	No	No	no
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	NO	no	no	no	no	no	NO	no	no	no
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	no	NO	no	no	no	NO	no	no	no	NO
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	No	no	no	no	no	no	NO	No	no	no
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	No	no	NO	no	NO	No	no	no	no	No
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	no	NO	no	NO	no	NO	no	NO	no	No
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:
	No	no	no	no	NO	no	NO	No	No way, José*	Yes
	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:	Date:  Name:

Obviously, a paper of this size makes no claim at being a comprehen­sive examination of the issues.  Rather, it is intended to get you thinking about your own situation and to guide you to the next steps that may be helpful.

Here is a summary:

1. Marketing is positioning. 

2. Advertising is communicating. 

3. Selling is motivating.

4. Any activity that isn't targeted is likely to be wasted.

5. Each of the three functions deserves to have its own activity budget and a specific dollar budget.

6. Each function should be measured on a current ongoing basis (as well as annually) in order to compare budgeted amounts versus actual amounts versus effectiveness.

7. In each function, changes in strategy (the big concepts) and in tactics (the implementation) should be based on what the market is teaching and not primarily on opportunities that just "pop up."

8. On the other hand, opportunities that just pop up are not to be ignored – if they fit.

9. There are no guarantees that your in-place marketing, advertising, and selling programs will work.  (Before getting discouraged, bear in mind that this same rule applies equally to your competition.) 

10. Once you are convinced that your market opportunity is bona fide and that your product or service offering is competitively attractive in that market, plan and run these three processes to find situations where the product or service offering from your company "fits" with specific real customer prospects in your targeted market.  Since you can't know in advance where the right fit will be, in most cases the right strategy is always to be expanding your contact with the marketplace.  And to "stick with it."  Slow and steady ongoing activity is the key.  Crash campaigns, on-again/off-again efforts, and crisis programs are generally not very helpful.