What are marketing and sales objectives for entrepreneurs?
The first objective of any business venture is to figure out how to gain paying customers. A great product without customers is not a business, though it may be a little more than a science project. Marketing involves increasing customer awareness, delivering a well-thought-out message about your product or service, and identifying customer prospects. Sales involves various efforts to convince those potential customers to buy your product.
According to Steve Wynn, who sold his Mirage Resorts in Las Vegas to MGM for $4.4 billion in 2000, “Marketing is about getting through the clutter, telling your story; why you have a better product than the others.” And Edward Iacobucci, founder of Citrix told us it in a matter-of-fact manner, “Nothing happens until you sell something.”
Just like an effective strategic plan helps you focus on your competitive positioning relative to your chosen “battleground,” your marketing strategy helps you understand your effectiveness of your marketing and customer relationship management efforts. After all, as we discuss here, your venture does not compete in a vacuum, you need customers to survive.
There are five basic steps to preparing your marketing strategy:
- Choose a market entry strategy for each niche you intend to serve.
- Set objectives for each target market.
- Design a sales program for each one.
- Implement and manage the marketing strategy.
- Set metrics; measure, control, and adjust as you go.
Growth in your venture can only come from your marketing team’s efforts. Marketing and marketing strategy wins 90 to 95 percent of the time over any other activities. And investors know this. They will go with an “A” marketing team and strategy with a “B” product and technology strategy over an “A” product and technology strategy with a “B” marketing team and strategy.
Three Types of Marketing Objectives
It is very important to pick your fight carefully, which means finding the right niche, driving the opportunity to reality, converting lead users, working on expanding the niche, and then working on controlling and protecting the niche. As William F. Miller, professor at Stanford’s Graduate School of Business, points out, “You control your fate by controlling your market. Once an entrepreneur focuses on gaining control of his or her market, all other desired outcomes follow.”
The marketing and sales functions are central to your business success; without them everything else becomes irrelevant. Your marketing strategy is based on the results of your market research, feedback from your beta users, and a good “rule-of-thumb” insight from the domain experts on your team. Establishing marketing objectives help you prepare and focus for action. As Louis Pasteur once said, “Where observation is concerned, chance favors only the prepared mind.”
An objective is something that you prepare in advance. It indicates something that you want to accomplish. An objective should indicate a desired level of performance. It should be understood how each objective will be measured, and who will be responsible for meeting it. Setting good marketing objectives will be one of your venture team’s prime responsibilities. The task is very demanding, because it requires close coordination among all of your team’s members, who must work in close synchronization to ensure that all objectives correspond to your business strategy and mission.
Every sales opportunity that you are tracking should drive some kind of incremental value to the overall value of your venture. In addition to measuring the basic objectives, like an estimated closing date, probability of closing, and the revenue, each sale should bring.
1. Technical Objectives
These sales are especially important for high-tech ventures lower on the food chain. Could be making a sale to someone to help work out the kinks in your pre-production “hack-model,” your production line, and/or delivery of product. In exchange, these customers could be getting the product priced at a discount for having them assist in the development and providing feedback.
2. Strategic Objectives
More important for ventures a little higher up on the food chain. This could be going out and getting the “low-hanging fruit.” Could be used to get traction in one niche, knowing that you can use this as leverage to gain access to more financially viable customers. Could also go after early adopters in special user groups to increase industry awareness and help provide “referenceability” when soliciting marquee customers down the road. Could be sales activities that will lead to high-quality customers and streams of strong recurring revenues. Could be defensive too, to prevent others from having direct access to the best customers. A simple example is like giving away razors to sell razor blades later on.
3. Financial Objectives
The one most associated with sales objectives; cash flow and making money. A word of note: If you are getting into full production of a product or service, made it through the Hillary Step and survived, and targeting the right customer with the right product, then there is no reason why you should not be charging a full premium on your product. As William Cockrum, entrepreneurial finance professor at Anderson School of Management at UCLA states, “New companies, afraid of losing a sale, often under-price their products.” And still, a start-up’s best source of raising capital is from internally generated funds from sales.
As Tom Siebel says, “Sales is often an overlooked opportunity.” Finally, for a venture suffering from any one of the common maladies, listen to Mark Cuban, co-founder of Broadcast.com and now owner of the Dallas Mavericks professional basketball team. He told us, “Sales cures all.”
Characteristics of Good Marketing Objectives
Well-stated marketing and sales objectives possess several important characteristics.
When evaluating your objectives consider the following questions:
- Who is responsible for approving the objectives?
- Is each objective relevant to overall results?
- Is each objective consistent with the other marketing objectives and with non-marketing objectives as well?
- Does each objective provide a clear guide to accomplishment?
- Has the objective been quantified and a time frame specified?
- Is the objective realistic, and is there a reasonable chance of meeting it?
- Is responsibility for each objective assigned to someone inside the venture?
- Are joint responsibilities indicated?
- When is the objective scheduled to be reviewed and, if need be, updated or dropped?