Sales vs. Marketing for Product Driven Companies

Sales vs. marketing always and will always be a topic discussed by business owners and entrepreneurs alike. And, it can be a touchy subject for some companies to discuss. For most companies*, it is one of the following departments that drives a majority of the company’s revenue:

• Sales/Business Development
• Marketing/Product

You may now be thinking that “Hey, our company has both of those departments and they both help push the needle”. Awesome! However, one department is likely pushing >70% of the growth. While the other department is supporting. When you take a look at other companies out there, you can likely figure out where their growth comes from – provided you know what to look for.

Below, we’re going to define and identify the two different models and provide you with examples of some of the best companies that use them.

Sales/Business Development-Driven Companies

A Sales/Business Development-Driven company heavily relies on its Sales and/or Business Development department(s) to grow the company. Their target market generally requires a lot of guidance to complete a purchase. Marketing will support the sales by driving leads via social media, SEO, SEM, etc. But, the company will generally have a hard time closing sales due to the industry and target market.

Example: A great example of a company like this is an automotive dealer. A majority of consumers won’t purchase a car without going through the sales process with a sales rep first. This is because the price is high and the product (the vehicle) can be difficult to understand.

Marketing/Product-Driven Companies

A Marketing/Product-Driven company heavily relies on marketing, product development, and/or branding tactics to drive its revenue growth. Their offering is generally lower priced and their brand is recognizable. There may be sales associates or a small sales team available to help customers that require it. But, marketing drives customers a majority way through the purchasing process.

Example: A good example of a company that is marketing and product-driven is a clothing retailer. When people go into a clothing store, it isn’t because someone cold-called them. It’s because they like the brand and/or received some marketing/promotion incentive. Have you ever walked by a clothing store and they have a big sign in their window showing you the sale that they have running? That is a classic example of a marketing initiative that works to entice prospective customers.

Are B2B Companies Sales or Marketing-Driven?

Before the internet, almost all B2B companies were sales-driven. They had to be, as sales reps had to develop most of the business and walk buyers through the purchasing process. Without the internet, sales reps had to do a lot of cold-callings and manually walking customers through every step of their sales cycle. To this day, a majority of B2B businesses are still sales-driven but we are starting to see more marketing-driven B2B companies since we have so many marketing options out there.

Examples:

B2B sales-driven company: Take a look at HRDownloads as an example. We’ve been on their sales floor and the amount of calling going on there by their sales reps is crazy. Their offering is priced on the higher end and requires a bit more hand-holding to close a deal. So, it would be hard to walk them through a sales process without guidance.

B2B marketing-driven companies: Take a look at our company, Visitor Queue, or SendGrid. Very few sales reps in the company with a majority of the headcount being made up of Marketing or Product professionals. The offerings are lower priced and self-initiated. This means that they require very little setup, and once they are set up they pretty much run themselves.

Are B2C Companies Sales or Marketing-Driven?

Similar to B2B companies, B2C companies can be marketing or sales driven organizations. However, we still find that a majority of B2C companies are generally marketing driven. This is because a lot of B2C companies take advantage of how affordable social media marketing, SEO, and SEM are compared to paying salaries of salespeople.

Examples:

B2C sales-driven company: Consider Manulife or other investment/insurance companies of this nature. In addition, they are generally higher ticket items with a lot of customization needed, which means that they will have an advisor assisting you the entire time. Plus, typically the people who are purchasing insurance will have a lot of questions, so it is a lot easier to have someone help along the way.

B2C marketing-driven company: Just take a look at Walmart as an example. They’re a large retailer that hardly relies on any assistance for end-users to purchase. Most of us go there because we know the brand and/or we receive marketing content from them. I’m pretty sure we’ve all seen a television ad for Walmart! Walmart is also joining the social media bandwagon with remarketing.

A split Between Sales-Driven and Marketing-Driven

As mentioned earlier in the article, you may have both sales and marketing departments that help drive your company’s growth. It isn’t likely that it is a 50/50 split but both departments can contribute. This is more common within companies that have different product categories that require different approaches for revenue growth.

Example: A great example of this would be Wayfair. They are well-known for being an online B2C retailer that is generally marketing-driven. However, they also have a business program that relies heavily on account managers to drive growth (I’ve received many of these cold calls). Another great example of this is Adobe. Adobe sells individual packages for a single user, but they also have packages for schools and businesses. The packages for schools can be hundreds of thousands of dollars, which means they can be more hesitant to pull the trigger or could be looking at other options. They will need a salesperson who they can refer back to with questions, concerns, etc. All of this hand-holding isn’t necessary for an individual plan that is ~$30 a month.

How to identify what a company is/will be

If you’re a younger company and you’re still unsure of what’s driving your growth, it’s about time you figured it out. Or, if you’re looking to identify what other companies may be, look at the following factors:

Price

What is the price point the offering sells for? Lower price points generally allow for customers to purchase themselves and not rely on sales reps. It’s also important to consider how cheap digital marketing can be compared to paying a sales rep’s salary. Additionally, for a sales-driven company to thrive, they generally have to pay commissions, which requires a higher price point.

Complexity

Is it a product or service that is easy to figure out? If the offering is difficult, they likely have to have a sales rep assist with the purchasing cycle. If the offering is easy or self-initiating, they are a low-touch offering, which means they won’t need as many sales reps. It’s important to note that even if you think your product is easy to understand, not everyone will think it’s easy. Even if you focus more on marketing, your marketing team should still be able to answer questions. This means that they can provide customer support through emails, live chat, demos, etc.

Industry/target market

Will the individuals purchase on their own? Some industries/target markets require more hand-holding (regardless of the complexity of the offering) which means the company will need more sales reps assisting them. Follow-ups, meetings, demos, and more all take up a lot of time but it can help close more deals than a simple remarketing plan (depending on the company).

Budget allocation

How much of their cost is going to sales rep salaries vs. marketing spend and salaries? If possible, look at how much money your company invests in marketing (including salaries) and compare it to how much money your company invests in sales. In addition, the higher cost department is usually driving the most growth. Again, sales reps typically drive more sales when they are trying to achieve their commission. This means they will have to have a higher budget allocated than marketing professionals who do not require a commission.

Competition

This one can be murky, but generally, the more competition, the more sales-driven they have to be. This is simply because people shop around. So, the company will need a sales rep there to follow up, answer questions and close the deal.

It’s impossible to say which one is better than the other. This is because it depends on a number of factors specific to the company. However, for company alignment and budget efficiency, it is important for organizations to figure this out early.

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Wrap Up

I wish I could give you one clear answer on which was better in the sales vs. marketing debate. But in reality, every company is different, has different goals and budgets, so it really depends on the company. Neither is better or worse than the other. And like I mentioned previously, you can use both sales and marketing teams in your strategies, it’s just hard to allocate resources to be 50/50. If you are using both sales and marketing, oftentimes there can be conflict between the teams. This happens because your company’s resources are not split 50/50. And both teams believe that they deserve more. If this sounds like your company, take a look at this article here to help you resolve the conflict between your sales and marketing teams!

As always, if you have any questions about how Visitor Queue can help your company generate more leads do not hesitate to reach out!

*For larger organizations, you may also consider the Merger and Acquisition (M&A) department within this list.