Marketing Basics 2: Differences between Marketing and Selling

As we continue to discuss the basics of marketing, we define two key complementary processes.

[March 14, 2006]

This series of articles is being written by the graduate students of Prof. Guy Decatrel in his class, MKT602: Marketing Management, at National University's Fresno campus. The students are: Jessica Bueno, Daniel Champion, Sara Chism, Lupe Garcia, Gill Gurshakti, Robert Kosanouvong, Arman Kyurinyan, Pa Lee, LaKishia McCreary, Victor Ramayrat. Additional ISP-specific information is supplied by telecom consultant Peter Radizeski.

Why is marketing the starting point for success in any business venture? ISPs operate in an increasingly hostile and complex environment. To succeed, an ISP must get and keep good customers. ISPs must evaluate what market and which customers they are trying to reach. They must then assess how to design services that provide better value to gain a competitive advantage. Finding a space in the crowded ISP industry is a straightforward concept, however, executing that idea and selling to potential consumers can be problematic.

Selling to customers requires market planning. For example, our goal is to build customer base of at least 1000 users within the next 12 months, or we want to achieve 55 percent customer awareness of our brand in our target markets. It also requires setting clear and measurable business objectives. For example, we aim for a return of at least 25 percent by year-end.

Selling also requires market planning in the form of competitive analysis. Do some intelligence gathering. Talk to customers and prospects, and talk with your suppliers. Read local newspapers and attend tradeshows like ISPCON. Build a competitors' service profile and try to find out why you lost customers to a competitor.

The role of marketing
Marketing's role in planning is to understand and manage the links between an ISP and its business "environment". In some cases, this can be an easy task. For example, many small and medium size ISPs are in a single geographical market. Some may serve rural markets. Others may offer a limited set of services. An Environmental Scan (article to be published later this year) can support the creation of a strong marketing plan. The following questions are significant to any marketing and sales planning process:

• Where are we now?
• How did we get there?
• What is the competition?
• What do customers want?
• Where are we heading?
• Where do we want to be?
• How must we get there?
• Are we on track?
• What must we do to stay there?

Market planning determines sources of competitive advantage. It sets goals and establishes strategies. Since an ISP's ability to realize profitable sales is affected by several environmental factors (Environmental Scan), the goal is to link market planning to sales planning and implementation.

From a sales planning perspective, an ISP must learn what motivates its customers, how they'll use its services, and choose tactics that will prove effective for specific target markets. This needs analysis requires shifting from a product and service focus and moving towards responding to market needs. ISPs that do not understand their competitive advantage may boast about better service quality. Will this convince customers even if service quality is actually better? Not just by saying so! Competitors say the same thing.

The ISP must define quality and demonstrate how its service differs from competitors. What is it that an ISP can do for its customers that no one else can do?

A second point is this: what can that ISP do better, at least cost or more efficiently, for example, than its competitor also does, and can the ISP validate this? Again, where is its advantage over its competitors? Is it in its cost structure, in process efficiency and effectiveness, or in its staff's service-focused culture? Is the ISP well known by its target market? How has it effectively communicated its offerings and positioned itself in its target market? How has it created name recognition?

The role of selling
When it comes to sales, understanding and being able to effectively express a competitive advantage distinguishes an ISP from its competition. This ability shows the value that the ISP can deliver which others cannot or have not successfully communicated.

Although sales and marketing activities often have fuzzy definitions, their hard and clear goal is achieving financial results. Marketing has the major role of identifying customers and their wants and needs. It creates awareness, interest, preference, and action (choice).

Sales has the goal of getting customers to buy. Integrated, sales and marketing have the common objective of increasing the number of customers and increasing profits. After customers have chosen a service provider, sales and marketing goals shift to support and maintaining customer satisfaction through service and support experiences. Through highly satisfactory service and support experiences, an ISP wins a long-term relationship, gains greater profitability, and is poised for referrals and new signups.

Together forever
Sales and marketing work together, as an integrated unit, to get and keep good customers. Process and service execution and performance must be measured to achieve total success. One way to do that is by constantly examining an ISP's value delivery chain. Every business is a collection of activities designed to produce, market, deliver, and support its products / services. As such, every business has a value chain.

A value chain identifies relevant business activities that create value and cost. This includes all activities that contribute to accomplishing the business goal of profitably delivering value. The ratio of cost to performance of each value-creating activity must be examined and constantly refined, lest profits decrease due to high costs.

So it is important for an ISP to sell value, and the promise to deliver value must be profitable. This is the motivation for customers to choose one ISP over others.

Following are thoughts for linking marketing with sales:

• What does the ideal customer look like?
• How do you meet them?
• How do they meet you?
• What messages are getting through?
• Where are the obstacles to sales success?
• How do you overcome them?
• What are the competitive challenges?
• What's working?
• What's not working?

Marketing involves the process of accumulating as much information as possible about your potential customers and their needs. By accumulating the information needed, the right market could be easily identified and the appropriate service and service plans can be designed. That's when sales takes over.

—End