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The 9 Most-Deadly Sins in Sales & Marketing -- and how to avoid them
| Guest post by: Neil Mahoney |
Article Overview: The first deadly sin: Failure to distinguish differences in: * Value & importance of different markets & market segments * Wants & needs of different markets & market segments
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Free Download - SELL SMARTER; NOT HARDER: Part 4 By Neil Mahoney |
The 9 Most-Deadly Sins in Sales & Marketing -- and how to avoid them
1. An ItalianMathematician (Pareto) first demonstrated the 20/80 concept that is so important in market segmentation to day. While it isn't a hard and fast rule, it nonetheless is remarkably accurate predicter of how business invariably stratifies -- whether you're sizing markets, or sizing segments within markets:
A. Handtools are a case in point:
* There are about 75.0 Mil. people who buy hand tools each year
* 50.0 Mil. are what are called "Light DIYers (Light Do-It-Yourselfers) They're the ones with a screwdriver & pliers kept in a kitchen drawer.
* This 2/3 of the market accounts for only 1/5 of all hand-tool sales -- not very heavy buyers; not very good prospects
* Serious DIYers, on the other hand, are much better customers: They are about 30% of the market & account for 29% of the sales.
* Best of all are the the Pros, the professional contractors, who are less than 5% of the customer base but account for over half of all the sales
B. Different Markets & Market Segments have strikingly different wants & needs, however.
* Light DIYers want low prices, and they primarily get their tools from local variety stores and hardware stores
* Serious DIYers mimic their professional counterparts, the Pros, and buy what the Pros buy, but buy mostly from Home Improvement Centers
* The Pros, the real heavy users, want top quality -- not just for quality's sake -- but because they push the tools to the limit
* The tools the Pros use have to be tough. Their tools translate into Productivity -- into profitabiliy.
* They primarlily buy from Contractor Supply Houses
Section B of this explanation clearly demonstrates the second part of this First Deadly Sin -- How want & needs differ dramatically from segment to segment.
What ever you product, after identifying the most-lucrative markets and segments your company can successfully serve, thoroughly analyze your situation to determine the want & needs of your key prospects -- the prospects who would consider that your products might suit their needs.
You must also recognize that all sales channels are not the same. Different channels see different product categories as more or less important to their profitablility, based on the clientele they serve:
* Back to the Light and Serious DIYers:
* They primarily buy from Hardware Stores, Variety Stores, and Home Improvement Centers
* These stores hang most of the tools "on the wall" and expect them to sell themselves.
* If they don't sell, they're removed from the wall or relegated to the back of the store
* The tools that the Pros buy, on the other hand, are relatively expensive and represent a substantial percent of the store's business
* These tools are usually prominently displayed, and the salespeople can represent the products knowledgeably and well
* Don't kid yourself and try to position your products in categories that are above your grade.
* Black & Decker tried that and ultimately had to introduce a whole new line -- DeWalt
So far this discussion has focused on hand tools, but most products will experience the same situation in Product Positioning. If you want to play in the majors, you must have the quality and durablility to compete. If you don't there are other ways to market your products, but be sure you choose your prospects wisely, and match your distribution to their buying habits.
Here are a few other other caveats to consider:
* Don't confuse things by trying to enter too many markets or segments -- three or four are usually plenty.
* Look at each & every market segment, not just the general market category, or those areas you already serve
* Look at segments that are closely related to yours, or where their ancillary actions create a ned for your product
* Business Relocation is one example: When a office relocates, it needs Movers, Network Installers, Office Equipment, Decorators, etc.
* Dealers & Distributors are an important segment, and like salespeople, they must be motivated to sell your line
* Remember, Dealers & Distributors have many lines to sell
* They can greatly augment your sales force, but their loyalty is not solely toward you
* Lastly, "Don't try to be all things to all people."
* The Laffer Curve clearly shows that there's a midpoint where sales & profits become optimized.
The next installation of "The 9 Most-Deadly Sins in Sales & Marketing" will feature Sin #2 -- "Failure to fully utilize related buying influences." There's more to this subject than most people think.
* Best of all are the the Pros, the professional contractors, who are less than 5% of the customer base but account for over half of all the sales
B. Different Markets & Market Segments have strikingly different wants & needs, however.
* Light DIYers want low prices, and they primarily get their tools from local variety stores and hardware stores
* Serious DIYers mimic their professional counterparts, the Pros, and buy what the Pros buy, but buy mostly from Home Improvement Centers
* The Pros, the real heavy users, want top quality -- not just for quality's sake -- but because they push the tools to the limit
* The tools the Pros use have to be tough. Their tools translate into Productivity -- into profitabiliy.
* They primarlily buy from Contractor Supply Houses
Section B of this explanation clearly demonstrates the second part of this First Deadly Sin -- How want & needs differ dramatically from segment to segment.
What ever you product, after identifying the most-lucrative markets and segments your company can successfully serve, thoroughly analyze your situation to determine the want & needs of your key prospects -- the prospects who would consider that your products might suit their needs.
You must also recognize that all sales channels are not the same. Different channels see different product categories as more or less important to their profitablility, based on the clientele they serve:
* Back to the Light and Serious DIYers:
* They primarily buy from Hardware Stores, Variety Stores, and Home Improvement Centers
* These stores hang most of the tools "on the wall" and expect them to sell themselves.
* If they don't sell, they're removed from the wall or relegated to the back of the store
* The tools that the Pros buy, on the other hand, are relatively expensive and represent a substantial percent of the store's business
* These tools are usually prominently displayed, and the salespeople can represent the products knowledgeably and well
* Don't kid yourself and try to position your products in categories that are above your grade.
* Black & Decker tried that and ultimately had to introduce a whole new line -- DeWalt
So far this discussion has focused on hand tools, but most products will experience the same situation in Product Positioning. If you want to play in the majors, you must have the quality and durablility to compete. If you don't there are other ways to market your products, but be sure you choose your prospects wisely, and match your distribution to their buying habits.
Here are a few other other caveats to consider:
* Don't confuse things by trying to enter too many markets or segments -- three or four are usually plenty.
* Look at each & every market segment, not just the general market category, or those areas you already serve
* Look at segments that are closely related to yours, or where their ancillary actions create a ned for your product
* Business Relocation is one example: When a office relocates, it needs Movers, Network Installers, Office Equipment, Decorators, etc.
* Dealers & Distributors are an important segment, and like salespeople, they must be motivated to sell your line
* Remember, Dealers & Distributors have many lines to sell
* They can greatly augment your sales force, but their loyalty is not solely toward you
* Lastly, "Don't try to be all things to all people."
* The Laffer Curve clearly shows that there's a midpoint where sales & profits become optimized.
The next installation of "The 9 Most-Deadly Sins in Sales & Marketing" will feature Sin #2 -- "Failure to fully utilize related buying influences." There's more to this subject than most people think.
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Article Tags: amp, case in point, customer base, hand tool, hand tools, handtools, hardware stores, home improvement centers, kitchen drawer, market accounts, market segmentation, market segments, nbsp nbsp nbsp nbsp nbsp, pliers, professional contractors, professional counterparts, prospects, tool sales, variety stores
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About the Author: Neil Mahoney RSS for Neil's articles - Visit Neil's website Click here to visit Neil's website   The 9 MostDeadly Sins in Sales Marketing and how to avoid them The 9 MostDeadly Sins in Sales Marketing Failure of HQ Sales to Communicate Effectively Prospect Development The Giant Donut Hole in Sales Marketing 10 remedies for the 1000 pitfalls in Start ups New Product Launches |
Related Forum Posts
Online Sales and Marketing vs Traditional
- Hi Evan,
I am noticing that many of the posts in the Sales/Marketing section deal with online marketing, SEM and and SEO and Affiliates. I was wondering if it might be a good idea to separate that section into two; 1) Online Sales and Marketing; 2) Traditional Sales and Marketing
Re: Online Sales and Marketing vs Traditional
- [quote="ltrahan":31w9r2iz]Hi Evan,
I am noticing that many of the posts in the Sales/Marketing section deal with online marketing, SEM and and SEO and Affiliates. I was wondering if it might be a good idea to separate that section into two; 1) Online Sales and Marketing; 2) Traditional Sales and Marketing[/quote:31w9r2iz]
I second the request...
Why do people hate Network Marketing / MLM?
- I've been looking at a number of different opportunities and end up meeting a lot of Network Marketing / Multi-Level Marketing people.
Some of the offers look interesting but everyone I talk to about it says to avoid these guys like the plague - what's the deal? Why do people hate network marketers and MLM people so much?
Is it not legit?
niche forum categories
- I think Kevin just touched on the point that I was going make... and that is developing 'categories' that stick. Sales and Marketing may be too broad for example. However I can almost guarantee you that you would see many more sign-ups if you tailored a category to 'internet marketing' for newbies. I've seen this work on other forums, however, [i:1i903wkn]it can get a little frantic[/i:1i903wkn]...
Fine tuning the categories, or expanding the scope should be effective. I think a lot of IM folks are surfing right on by because they're not finding what they're looking for here...
Just a few thoughts:
Better Blogging
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Internet Marketing
Presentation Skills
More How to's
Another point is... a lot of people don't know that they can benefit from participating in forums. The signature links to their site - if they have one - can / should be motivation enough to get more involved. The more internet savvy members that have signatures seem to stick around more... Don't you think?
Different Hats
- CEO Sales & Marketing & Leadership Development Company
Strategic Vision 10
Alliances & Growth Strategies 10
Hiring & Managing People 8
Mentoring 8-9
Strategic Planning for Clients 10
Execution of Marketing Campaigns 9-10 (i have great people who do the nitty gritty)
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Speaking 10 (so I have been told)
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Great topic Kevin!!
Jude
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