Who wins in business – the tortoise or the hare?
I have something slightly embarrassing to admit. I recently spent a Sunday afternoon driving to four sub shops to hunt down a specific sandwich. How did this happen? I was on an elliptical machine at the gym, watching TV, and caught a commercial for Cousins Subs’ “Pulled Pork and Slaw” sandwich. The commercial was effective, to say the least. Although I was already running late, when I finished my workout, I had to get this sandwich and became a bit obsessed in seeking it out.
After finding two Cousins locations, both of which were closed, I hit a Subway, where they informed me they had discontinued their pulled pork sub the day before. In a last-ditch effort, I ended up at Capriotti’s with the closest thing I could find – the “SlawBeJo.” How does behavior from a (seemingly) rational consumer come to this? It’s the profound and instantaneous effect that marketing and advertising can have on consumer behavior.
Business is a race to gain customers, and sales and marketing have strong roles in making this happen. Often though, the relative impact of sales versus marketing varies depending on the ticket price of the item being sold. If something has a low ticket price – like the sub, for instance – marketing plays the dominant role in encouraging impulse purchases. Notice the aisle end-cap specials at grocery stores, the “buy now” buttons on the Web, the “for a limited time” specials on TV. These are B2C sales, and there is a short sales cycle. This strategy is equivalent to the hare in Aesop’s fable; sales are quick and frequent.
If the price of the item is high, as it often is with B2B sales, there tends to be a longer sales cycle. The time frame can run from months to years. The vendor must build a relationship with the potential client. Trust needs to be established. Credibility needs to be built. The buyer needs a considerable amount of time to do his or her due diligence. This is a rational, thought-out decision that is being made by the buyer. Here, aggressive “buy now” marketing techniques don’t work. Instead, well-planned and consistent sales and marketing efforts are required, all over a long period of time. This is the tortoise example, with a “slow and steady wins the race” mindset.
There are obviously different sales and marketing strategy implications depending on if you and your company have B2B/big ticket/long sales cycles or B2C/small ticket/short sales cycles. But not as obvious are the talent management implications.
First, there are differences in the types of people you would want to place in these sales and marketing roles. If your company mainly sells big-ticket items, you’re going to need to hire consistent, persistent, process-oriented folks who are not easily discouraged. Hiring tools such as the Predictive Index, Myers-Briggs, or DISC are helpful in identifying these traits through personality profiles.
If your company mainly sells small-ticket items (typically B2C), you’ll likely need a bigger marketing team filled with people who are creative risk takers. They will need to constantly monitor sales data and competitor strategies, and adapt and implement new initiatives quickly. The feedback in this world can be instantaneous as the sales cycle is short. This enables and requires one to measure the effectiveness of efforts and change direction at the drop of a hat.
The type of compensation structure that you have also is dependent on the type of sales environment in which you compete. In B2C companies, compensation structures can be more commissioned based, and employee evaluations can be tied directly to sales results because there are plenty of sales data even over a short period of time. It is much trickier to measure individual success in companies with long-term sales cycles, and therefore more difficult to have a fully commission-based structure. As a result, management needs to thoughtfully and clearly define the “right” activities that will ultimately result in higher sales, and establish evaluation and compensation systems that recognize and reward these activities.
No matter what type of business you’re in, when evaluating your company’s sales performance, you must understand your sales cycle, and not only adjust your sales and marketing strategy, but also your management and human resource strategies accordingly. Slow and steady or quick and fast? The type of business you are in will determine if the winner is the tortoise or the hare. Oh, by the way, the sandwich was delicious!
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