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Sales and Marketing Study Executive Briefing 21 October 2004

4/15/2012. (C) 2004 GrowingCo, Inc.. 2. Goal of study. Attempt to understand the sales and marketing ?pain" of small business owners in the Chicago metro area.. 4/15/2012. (C) 2004 GrowingCo, Inc.. 3. Background. 1384 executives were invited to participate in one of three different surveys on market

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Sales and Marketing Study Executive Briefing 21 October 2004

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    1. 4/16/2012 (C) 2004 GrowingCo, Inc. 1 Sales and Marketing Study Executive Briefing 21 October 2004

    2. 4/16/2012 (C) 2004 GrowingCo, Inc. 2 Goal of study Attempt to understand the sales and marketing “pain” of small business owners in the Chicago metro area.

    3. 4/16/2012 (C) 2004 GrowingCo, Inc. 3 Background 1384 executives were invited to participate in one of three different surveys on marketing and sales effectiveness and lead generation. Additional companies were invited through websites, GrowingCo invitation list and business email newsletters. There were 218 total responses. These surveys were conducted as a rapid and field expedient exercise to quickly understand the primary issues impacting sales and marketing within small businesses.

    4. 4/16/2012 (C) 2004 GrowingCo, Inc. 4 Geography of participants

    5. 4/16/2012 (C) 2004 GrowingCo, Inc. 5 Participant Profile Number of employees: 55% of respondents have a sales force consisting of 1 to 5 people and the same percentage of companies have a marketing department of 1-5 people while 36% have a marketing department of less than 1 person. Company Size: Companies targeted for the study were $2.5 million or more in sales. Respondents: People that took the study were mostly executives (58%), followed by Sales (28%), Admin (9%) and finally Marketing (6%). Lead Sources: Respondents attributed 77% of their incoming lead flow sources to referrals, with the remainder almost equally split between cold calling (10%), internet (6%) and other (5%). Average Budgets were generally allocated as follows: 65% of available budgets allocated to cold calling, 18% to direct mail, 16% to advertising and direct mail and 5% to the internet. Average number of proposals generated from all forms of marketing communications is 26 to 50 per year. 25% of all proposals are converted to sales each year.

    6. 4/16/2012 (C) 2004 GrowingCo, Inc. 6 Key Findings No internal agreement on role of marketing. Poor coordination cripples marketing and sales efforts. Marketing dollars incorrectly allocated. No accountability.

    7. 4/16/2012 (C) 2004 GrowingCo, Inc. 7 No internal agreement on role of marketing. Surprisingly, in the vast majority of responses, the basic internal understanding of the role of marketing to the organization was not clear. It was revealed that: 38% of executives recognize a lack of clarity regarding the overall strategic marketing direction. 85% of sales people have never been exposed to the strategy or marketing plan at all. 68% of marketers say that arguments over tactical issues inhibit focus on longer-term strategic priorities. The majority (84%) of executives surveyed disclosed “I tend to take on too much.” Nearly the same number (79%) of executives admitted to “collecting legacy projects that dilute my focus.” SUMMARY: A strategy represents a set of decisions regarding the future and how the organization will be successful. Without a crisp articulation of these decisions, the organization must continually reinvent those decisions everytime a new idea, problem or opportunity arises. This results in endless meetings, hallway conversations, email threads and ultimately missed opportunities while perpetuating a culture of indecision and inefficiency. SUMMARY: A strategy represents a set of decisions regarding the future and how the organization will be successful. Without a crisp articulation of these decisions, the organization must continually reinvent those decisions everytime a new idea, problem or opportunity arises. This results in endless meetings, hallway conversations, email threads and ultimately missed opportunities while perpetuating a culture of indecision and inefficiency.

    8. 4/16/2012 (C) 2004 GrowingCo, Inc. 8 Poor coordination cripples marketing and sales efforts. Of the salespeople that responded to this survey there was a high level of frustration with the marketing support they were receiving. 71% said: “marketing has little idea of the quotas sales people must meet, 68% said” marketing does not understand the timing or tone of follow-up communications and proposals, 64% said” marketing does not tell us which products need additional lead support. 61% said marketing “does not understand the requirement to portion leads fairly between territories.” Likewise, the marketers that responded to this survey revealed a high-level of frustration with the sales force Specifically 65% said “our sales force does not keep the prospect database up to date.” Further frustrations were expressed with simple tactics such as mailing list accuracy and marketing’s need to receive consistent feedback from the field. SUMMARY: A strategy represents a set of decisions regarding the future and how the organization will be successful. Without a crisp articulation of these decisions, the organization must continually reinvent those decisions everytime a new idea, problem or opportunity arises. This results in endless meetings, hallway conversations, email threads and ultimately missed opportunities while perpetuating a culture of indecision and inefficiency. SUMMARY: A strategy represents a set of decisions regarding the future and how the organization will be successful. Without a crisp articulation of these decisions, the organization must continually reinvent those decisions everytime a new idea, problem or opportunity arises. This results in endless meetings, hallway conversations, email threads and ultimately missed opportunities while perpetuating a culture of indecision and inefficiency.

    9. 4/16/2012 (C) 2004 GrowingCo, Inc. 9 Marketing dollars incorrectly allocated. Most revealing is a comparison of marketing spend to marketing results: When asked, “where do the majority of your sales come from?” nearly 80% of respondents said “referrals.” The remaining 20% was split between advertising, PR, direct mail, cold calling and other tactical tools. Yet, when asked, “how is your marketing budget allocated?” nearly 80% of budgets were focused on direct mail, advertising, PR, cold calling and other tactical tools.

    10. 4/16/2012 (C) 2004 GrowingCo, Inc. 10 No accountability. In most cases, the sales force is compensated for revenue growth (commissions) while marketing is not. Our advertising agency is compensated based on performance (94% disagree) Our marketing department is compensated based on performance (75% disagree) Marketing is accountable for sales increases (26% agree, 45% disagree, 34% no opinion) In addition, sales does not properly acknowledge the contribution of marketing to the lead generation efforts. Biggest problem related to inquiry/lead management) = (poor lead follow-up 35%) Even marketing organizations that are good at identifying accountabilities often focus the accountabilities on activities instead of results. This creates many challenges in execution. Since there is always so much activity within the organization, it is difficult to gauge progress against strategy when solely looking at activities. Measurement models are mostly focused on activities, not results. Clearly, unless compensation models change, marketing and sales will never truly be on the same page.

    11. 4/16/2012 (C) 2004 GrowingCo, Inc. 11 Conclusions and recommendations No internal agreement on role of marketing. For small companies, role of marketing is lead generation and improving the process of finding and closing customers. Poor coordination cripples marketing and sales efforts. Since goals of marketing department and sales department are different, alignment of goals (and compensation) should solve this. Marketing dollars incorrectly allocated. When marketing has a vested interest in the success (as defined by the salesforce) of programs, dollars are allocated differently. No accountability. Marketing should be compensated in the same way that sales is compensated. Clear metrics for marketing performance and compensation should be defined.

    12. 4/16/2012 (C) 2004 GrowingCo, Inc. 12 About GrowingCo, Inc. GrowingCo, Inc. is an advisory firm -- a trusted provider and facilitator of peer-driven intelligence, insight and interaction. Study, forum participants and sponsors use GrowingCo data, forums, surveys and white papers to improve understanding, collect peer insight, benchmark against peers and competitors, evaluate demand drivers and understand individual customer requirements. For more information about GrowingCo, Inc., please contact… Ben Bradley Managing Director GrowingCo, Inc. 630-221-9844

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