Who Wins In Business – The Tortoise Or The Hare?
Written by Corey Chambas, President & CEO, First Business Financial Services, Inc.
First Business Financial Services, Inc. Board Member
First Business Bank Board Member
I have something slightly embarrassing to admit. I recently spent a Saturday afternoon driving to four Cousin’s Sub shops to hunt down a specific sandwich. Yes. My wife is a gourmet pastry chef, which makes the situation even more peculiar. How did this happen? I was running on the treadmill, watching TV and caught a commercial for Cousin’s Sub’s pulled pork sandwich. The commercial was effective, to say the least. As soon as I finished my run, I had to get this sandwich. After finding it wasn’t available at the first Cousin’s Sub I stopped at, I became obsessed in seeking it out. How does this consumer behavior come about? I think it has to do with the relationship between ticket price and marketing’s role.
Business is a race to gain customers, and sales and marketing have strong roles in making this happen. I believe the roles are polarized depending on the ticket price of the item being sold. If something has a low ticket price, like the sub for instance, marketing plays an aggressive role 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. Largely, these are B2C sales and there is a short sales cycle. This strategy is equivalent to the hare in Aesop’s fable, and sales are quick and frequent.
If the price of the ticket item is high, as it often is with B2B sales, there tends to be a longer sales cycle. The timeframe 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 considerable amount of time to do their 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 sophisticated 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.
So there are definitely marketing strategy implications, but people often overlook management and human resources implications. 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 (typically B2B) you’re going to need to hire folks who are consistent in what they do. You’ll probably have a modest sized marketing department and a large sales staff. The sales and marketing personnel need to be organized, not easily discouraged, and process oriented. The marketing team needs to know how to support the sales team and the relationships they set out to build with clients.
If your company mainly sells small ticket items (typically B2C) you’ll likely need a bigger marketing team and people who are creative risk takers. They’re going have 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 one to measure the deficiency or effectiveness of efforts and change direction on things at the drop of a hat. In these types of companies, compensation structures are largely commissioned based, and employee evaluations should be frequent and focused on short time periods and lots of data.
It is much trickier to measure success in companies with long term sales cycles. Consequently management needs to encourage the right activities, establish compensation systems that are effective in a long sales environment, and emphasize long term projects and progress on performance evaluations. It’s more difficult to have a fully commission based structure based on the long sales cycle.
No matter which type of business you’re in, when you’re evaluating your company’s selling performance, understand the sales cycle you have, and adjust your sales and marketing, management, and human resource strategies accordingly. Slow and steady can win the race, especially if the competition gets distracted. Or quick and fast can win the race, if they don’t become complacent.