What is the difference between sales and marketing?
My answer will differ if you asked me this question today or 25 years ago. When I was with sales in the 90’s, the marketing effort is limited to generating awareness and interests through advertising, telemarketing, etc.. The prospects (or leads as we called it) are then given to us, the sales team, to Always Be Closing by getting Attention, Interest, Decision and Action.
As mentioned in last weeks video, “93% of buying decisions are influenced by Social Media”. Now, Social Media has widened the scope of Marketing that Sales is left to Decision and Action or based on the figure below Evaluation and Purchase.
Our sales report then was based on this funnel, for example :
- Consideration = Number of Leads Visited, ex. KPI = 100 leads visited.
- Intent = Number of Proposals Submitted, ex. KPI = 70 proposals submitted.
- Evaluation = Number of Proposal in the Top 3 of the client, ex. KPI = 30 proposals shortlisted in the top 3.
- Purchase = Number of Sales Closed, ex. KPI = 10 Proposals Closed.
If my batting average of Number of Sales Closed is 10% of Number of Leads Visited then if my Sales Quota can be achieved if I closed 10 clients I need to visit at least 100 leads and so on. As my MBA Sales Professor taught us, the best salesmen in the world are those who are not affected negatively by rejections. To close 10 accounts, you need to be rejected 90 times. If your batting average is 5%, to close 10 proposals you will be rejected 190 times.
To answer my hanging question last week, is Facebook a Sales or Marketing Tool? Based on the funnel, Facebook is a Marketing Tool. If a client decides to purchase, you need to go outside of Facebook to accept the payment. Facebook does not have a payment facility to complete the whole selling cycle. Facebook cannot be used to convince the client to decide and receive payments so Facebook is not a Sales Tool. You need your own eCommerce site or payment process to close the sale.
The title of our article this week asks, Sales or Marketing? “If you post it, They will Buy” alone does not work. It is a valuable knowledge especially for online sellers that you also need to “Always Be Closing”, even if you do not like it. Facebook knows this that is why they rate your Facebook Page based on how fast you respond to the Inbox of your FB Page. Notice this description in the About section of your FB page, Typically responds within a ______ thus you need to actively respond to inquiries in your Social Media Sites. Thus you also must not just be sharing and posting, you also must be closing. But how can you go to every group and comments to sell your product when Facebook treats this as an action against FB community standards which could make them block your account?
In the now, majority of the activities is in Digital Marketing. You must be able to bring people who have not heard of your product from Awareness to Evaluation through your Social Media presence. While the sales activities is now left to processing of orders and acceptance of payments. A control freak life me would find this as a disadvantage since my closing of sales is now dependent on how well I plan and implement my digital marketing strategy and not how good I am in selling. You need to have innovative promotions and a well thought of plan just to be noticed. How do you convince them to consider your product solely using Digital Marketing?
Lastly, how is Digital Marketing in the New Normal different from the usual Digital Marketing? I will answer this question next week.
When Jerry Maguire came out in the 90’s, it had a strong impact to some people. Some looked for the one who completes them while some like my co-sales teammate resigned from work. Like Jerry Maguire, he too had a quarter-life crisis and wanted to go back to school to pursue his passion. I, like some of Jerry Maguire’s officemate we’re clapping but deep inside was wary he will achieve his passion. If you are wondering what happened to him, he is now successful in the same work and industry he tried to leave.
Wikipedia defines quarter-life crisis as “involving anxiety over the direction and quality of one’s life” which is most commonly experienced in a period ranging from a person’s early twenties up to their mid-thirties. I define quarter-life crisis this way; we go through college and find a job just focused on earning money until one day we wakeup and begin to ask, is this what I want to do for the rest of my life? In this crossroad of our life, we begin to look for our passion and purpose. If you are successful in finding your purpose and pursuing it, life seems easier. Actually the problems are the same but since you are doing what you love, you have gained the resilience to continue in spite of the difficulties. Plus the comfortable feeling that you are doing something that you are meant to do.
Business is like life, that is why it needs a Mission Statement. Otherwise your business would just be for earning money. In my “How to Start Your Own Business” Seminar, I always ask the attendees what is their passion, then I tell them to start the business of their passion. Business is a struggle, it is harder than just being employed and earning salary. Your continuing the business and closing it will depend if the business is your passion.
Another point from the movie, Jerry Maguire was fired for trying to change the direction of the company when he was not part of the Board of Directors. In fact he was like Don Quixote, dreaming people will embrace his mission when he is in the middle of the organizational chart. There will be no twist to the movie if Jerry Maguire was part of the Board of Director. It is the Owners or Board of Directors who sets the Vision and Mission of the business then cascades down this direction through policies and corporate culture. In fact, Jerry Maguire was only able to set the direction he wanted when he was the owner of his own company.
Two lessons I want to reiterate from this movie:
- Your business needs a Mission and Vision based on your passion. There are a lot of advantages to this, one of which is you won’t have a quarter-life crisis which in business years is just after a few years. Owning a business is like sailing towards waves and you continuing or going back when you encounter rough seas would depend if your business completes you.
- The Mission, Vision and Values are developed by the owners and cascaded down their employees. The analogy is like steering a ship with the directions coming from somewhere below deck and not on top at the bridge.
Ever wondered what was really inside Jerry Maguire’s Mission Statement? The movie’s writer, director and producer – Cameron Crowe released the full 25-page Mission Statement in his website to commemorate the 20th year of the movie in 2016. You can read it at http://www.theuncool.com/films/jerry-maguire/jerrys-mission-statement/ .
As promised, this week I will talk about how to pitch to the bank or potential investors to get funding for your business. It is not enough to have a business plan, you also need to sell it to potential investors. Even after your business is operational, you still need to continuously pitch your products and services to potential clients.
There are different kinds of pitch but personally I just use two, a short or informal pitch and a long or formal pitch. The short pitch is used to get the attention and attract the potential investor to setup a meeting for a more formal presentation where you will need a Pitch Deck or a PowerPoint presentation.
There are different kinds of short pitches such as the Twitter Pitch, where your pitch is limited to 140 characters, and Elevator Pitch, where your pitch should not be longer than 2 minutes or an elevator ride. Although there are a lot of variations in doing a short pitch this are the essentials :
- A strong opener that will capture their attention.
- Introduction of your business, including what you do.
- What is the problem your business is trying to solve?
- What is the solution of your business to the problem?
- Why is your solution unique and why it is hard to copy?
- What you need, i assume its money?
- How will they be assured to get their money back with interest? If your talking to an investor, how much money will they make by investing in your company?
- Close by setting an appointment for a more detailed presentation.
Here is a video of how to do an elevator pitch;
If you are successful in your Short Pitch, be it in the phone, social media or an elevator it means you need to prepare a Pitch Deck. Here are the essential information that must be present in your PowerPoint presentation:
- A strong opener that will capture their attention.
- What is the problem your business is trying to solve?
- What is the solution of your business to the problem?
- Your product that will deliver the solution.
- Present the team, with short description, that will create the product.
- Show the competition or alternatives to your product.
- Describe your target market.
- Present how you plan to make money.
- Show your financial projections including how much investment is needed and how it will be spent.
- A strong closer, including how much money they will make by investing in your company.
There is a 10/20/30 Rule in PowerPoint Presentations, it should have 10 slides, should not last more than 20 minutes, and contain no font smaller than 30 points(1). So where do you put your contact information if you already have 10 slides? I put it at the bottom of all my slides.
Lastly, do not forget that you are still talking to a human therefore always add eye candies or anything that will touch on the human emotion;
- 10/20/30 Rule : https://www.pier8group.com/the-10-20-30-rule-of-powerpoint/
In the spirit of reading the signs of the times, I would change my article this week into Funding Your Business. I received a private message (PM) this morning from one of the attendees of my “How To Start Your Own Business” Seminar. He asked advice on how to fund a business he WANTS to put up. His savings run out and needs to get funding so he can generate income. Which is our mission for Business Sanctuary (http://sanctuary.smepinoy.com/) having foreseen this issue being encountered by a lot of people in the New Normal.
My first feedback, is the business you WANT to put up feasible? Is there a market for your product or are you just asking for funding to build your clubhouse?
Are you trying to get a loan from the bank, or funding from anyone, without a business plan? Good luck! Having a business plan gives assurance to whomever you approach that you are legitimate. It also show that you have a plan and not just starting something on a whim.
Having a business plan also gives you the opportunity to analyse if the business you WANT to put up has a chance of succeeding. Is there a market need for the product you want to offer or is it something people can wait until after the Covid Pandemic to purchase? To answer this question, you can do market research. If you think market research is too tedious and difficult, you can try to use the Pestle Method which I touched on at CH 2 : The struggles of an Entrepreneur (http://smepinoy.com/the-struggles-of-an-entrepreneur/).
I will discuss in my future articles how to create a business plan, but for the meantime try to put yourself in the shoes of the bank. What are the things you will ask the business loan applicant before you approve their application? Example of some questions I might ask myself are:
- How will the loan applicant spend the money?
- How will the loan applicant give back the money?
Lastly, he told me all banks he visited said they are not offering loans for small businesses. As a guide, this are the institutions whom you can approach to ask for funding:
- Development Bank of the Philippines and Landbank are government banks which they use as conduits for loans to MSMEs. (https://www.dbp.ph/developmental-banking/micro-small-and-medium-enterprises/sustainable-enterprises-for-economic-development-seed/879-2/)
- If you Google “MSME loans in the Philippines” you would get a list of private institutions, not only banks, offering loans to MSMEs.
- Crowd and Seed funding, if your business project has a technology or social impact you can also Google “Crowd/Seed Funding Philippines” to get a list and instructions on how to do Crowd or Seed Funding for your business.
This are just a few institutional sources of funding for your business, but before you even start looking for funding, create a business plan. Next week I will talk on how to pitch your business plan.
One of the factors for a business to succeed is in its partners. It is important that you choose the right kind of partner. If one partner is a dead weight, they divert the attention of the other partners from making the business grow into dealing with the lagging partner. It is like walking with a ball of chain attached to one on your leg.
But creativity thrives in chaos, the creative person who usually have the messy workspace is the one who churns the eye candies which is attractive to the masses. On the other hand, those who creates the systems and processes creates unattractive products.
Thus adding to the sub-factor under choosing the right partners, is also choosing the right blend of partners, the marriage of chaos and order. As an example, usually tech companies are started by group of techies, developers who focus in coming out with their own Iphone or Windows. It can be the best product in the world but if no one can see its values, no one can sell it to the masses. When the masses cannot see their product then it would not be the best product in the world. The product will just die and be lost from existence.
The MS DOS which Microsoft sold to IBM was developed by a now unknown software company. Although the DOS was developed by another company, it was the product that gave Microsoft its first big break. Watch this clip from the 1999 TV Movie, Pirates of Silicon Valley, to see how one of its partners did it;
If you belong to Generation X, you may be one who were inspired to start a business because of this movie – Field of Dreams. Sorry Millennial’s you may not be able to relate, but even those who have not seen the movie believes just build your business and customers will line up at your door.
Although the movie was meant by the director to be about family reunions, “If you build it, he will come” and the father-son catch as the finale. The long line of headlights impacted me more, the pun “If you build it, they will come” became a slogan for startups. Unfortunately it is not that easy, business is not simply finding your product and registering your business. Now that I have gained white hair the last scene makes me ask, how did the people learn about the field?
Clients does not just come in droves without doing any marketing activity. It may be through word of mouth but the impact will not be that big in a short period of time. You need to do mass marketing to gain such a big impact. Unless you have baseball ghosts who can whisper to a lot of people, nobody will know about your product and business if you do not take the effort of telling people about your product.
I always mention in my business planning seminars, “If you want your business to succeed, make sure you and your business partners also sell aside from doing what they are tasked to do.”. You as the owners got to sell, sell, sell! You are also the best salesman for your company because you have the passion for your product. But many times I encounter business owners are afraid to sell. Example are tech-business owners that are developers, they are usually introverts and shy. They want to be the next Bill Gates or Steve Jobs by creating the next Windows or Apple. Unknown to them it took a lot of influencing and manipulating not just inspiring people. Even if you have the best product in the world but you cannot convince people that it is the best product in the world, might as well apply for a high paying tech job.
Another way is to look for partners that will help you convince people, the marriage of chaos and order.
There are two important things an existing business must do to succeed in the New Normal; 1) Reset-Realign-Restart which I have touched on my previous article “CH 1 : How my sanity survived the New Normal?” and 2) Go Digital!
This video was produced in 2016 long before the COVID-19 pandemic and businesses were already expected to embrace digitization to succeed. This has become a necessity in the New Normal due to the quarantine implemented by the government to protect its citizens.
Going Digital is not just having a web presence, which is having a website or an FB page. Going Digital is adapting technology in different areas of your business. What are the different areas of your business? See the figure below which is an Internal Analysis Framework in Strategic Planning:
If you are a micro business or even a sole proprietor this does not mean you have to create departments and hire people. You can assign yourself the different functions. Owning a business is not simply producing your product and selling it. You need to improve your product, deliver quality, have a good relationship with your suppliers, maintain financial books, file government compliance, and more. Based on studies, doing the other functions is a factor for business success. A common practice among the less than 0.7% of businesses that survive more than 5 years.
After being aware that there are more things that needs to be done in owning a business, you now do an internal analysis of your business. Track the process of your product from ordering your raw materials from the supplier to delivery to your client, plot the process into different boxes, as below:
Match your business process with Porter’s Value Chain Model and see what is missing in your business. Check what you cannot do during the New Normal and make two lists, in the 1st list put what you can do on your own and in the 2nd list put what you need manpower assistance. Items in list 1 can be solved with technology intervention and items in list 2 with outsourcing. The motorcycle delivery app is an example of an outsourced process for your business. It is not something you can do on your own and need extra manpower to achieve.
If you also want to have focus in just creating and selling your product, there is an option to outsource the other items in your list 2. There are businesses, such as SMEpinoy, who are offering business process outsourcing for MSMEs. You would be surprised how affordable it is to outsource, even much more affordable than hiring an employee.
But if budget is really tight and you want to do everything on your own, adapting technology is an option. How do you acquire technology? What you need can easily be Googled now, there are also friends you can ask or social media groups you can join.
But is technology expensive? On the contrary, do you know Google Suite and Microsoft Teams has a free usage for limited use. Which is enough if you’re a Micro Enterprise. You just start to pay when your transactions increase as your business grows.
If your still stuck in acquiring technology, feel free to ask for our assistance by emailing us at firstname.lastname@example.org. We will be more than happy to help since this is our mission. To help businesses succeed in the New Normal.
I have learned to make it a habit to do an external analysis of the macro-environment to anticipate the different forces that might affect my business. The Macro-Environment Analysis, or some call it the PESTLE Analysis(a), is one of the MBA frameworks in Strategic Management. One method to do external analysis is by keeping up to date with the news, much more in the New Normal. Recently one news that came out will have a big impact on businesses in the Philippines. There is a sharp drop in the Philippine economy, much worse than the 1984-85 economic crisis during the Marcos-era.
This is a Threat in the Economic Factor to all businesses in the Philippines. During the ECQ I was optimistic, once the Quarantine is lifted people had the SAP to still spend in the New Normal. But the prolonged quarantine is depleting the savings of most Filipinos. OFW’s are going home, people are losing their jobs and businesses are closing. I am wondering how much cash will be left circulating in the Philippines after the quarantine. I am feeling sad, this has also brought back memories of how hard it was in 1984-85…
Although we were more fortunate than Chris Gardner in the movie, our family had a major setback in our lifestyle during the 1984-85 recession which gave me bad memories that built my character. From this experience, I learned to live a simple lifestyle.
Filipinos and businesses struggled during this period, we had the Smokey Mountain (not the band) and Negros (including the Escalante Massacre(b)) which was our very own Ethiopian Famine (Band AID(c) and USA for Africa).
Before the Pandemic, a Philippine statistic was less than 0.7% of businesses survive more than 5 years. I could imagine that in this pandemic it will be much less. To show it in a different lens, I receive around 5 new Facebook Page invites for new businesses per day, that is around 35 per week or 140 new businesses per month. If we follow the pre-pandemic statistics, only 1 of this 140 new businesses will survive more than 5 years. During the Pandemic where businesses are closing, the Philippines would be lucky if 1 of around 200 business would survive more than 5 years.
If you are a neophyte entrepreneur during the pandemic or even have an existing business, you need to ask yourself, how can I be the lucky 1 to survive more than 5 years. Follow this up with the following questions:
- What is the difference of my product or service with the others existing in the market?
- Aside from a product/service and an FB page, how can this difference make me capture a chunk of the pie (market share) to make it feasible to maintain this business?
- If I were lucky enough to capture a significant pie of the market, how can I protect this competitive advantage to make me survive more than five years.
The struggle of an entrepreneur is on how to develop a product or service that can capture a significant market share that will make it financially feasible to survive in the now and after I captured this market share, how do I protect my competitive advantage to expand in the tomorrow. This struggle is greater during the New Normal where the pie being shared has decreased and the number of new players increased.
A lot of people dream to be an Entrepreneur by necessity, having lost their jobs, or were enticed by the thousands of rag to riches stories. There are exceptional entrepreneurs who started their business during the recession. One of the business cases we analyzed when I was earning my MBA was Chowking Food Corporation, its founder Robert Kuan started his business in 1985 and even expanded during the recession. His strategy was to build his company when it was cheap to setup a business and be in position as the economy grows.
The silver lining, if the forecast below will be accurate, we have the same scenario as 25 years ago.
The economy is expected to recover after two years, there is hope. There are also people like Robert Kuan who believes that now is a good time to start your business. Actually it is not the business you need to start, its your product or service. Capital is cheap and the best time to test your product/service.
But still we have to beat another statistic and be The 1 of the around 200 new businesses to survive more than 5 years. People do not just enter into something to fail and maintaining a business with only a product and an FB page is a sure way to fail. We enter a battle prepared, just like a general you need to spy on your enemy, know the terrain, assess your soldiers and then create a battle plan based on all this factors. I will discuss in the future chapters of SMEpinoy MBAlite how to prepare yourself for battle so years after you can call a little part of your life Happyness…
- Pestle Analysis : https://pestleanalysis.com/what-is-macro-environment-analysis/
- Escalante Massacre : https://en.wikipedia.org/wiki/Escalante_massacre
- Band Aid : https://en.wikipedia.org/wiki/Band_Aid_(band)
Before the ECQ I have some routine breaks that revitalized me, like early morning walks in the beautiful campus of the Ateneo (felt like Baguio even in summer), weekend beer with friends and office mates, church community activities and a sideline business that quenches my thirst to share. My routine breaks are nature and community, then came the Covid-19 pandemic where I was forced to stay home for months and close my sideline business. I was privileged that even during the ECQ I was still able to work from home and have a family to take care of as a routine. I could not imagine the otherwise of being alone and doing nothing. Having got used with routine breaks, I tried new activities such as gardening, delivery disinfection, home repairs and insect extermination. I also kept myself updated with news and pretended to be a back-seat IATF, but my sanity was still breaking while trying to be normal in the New Normal. The intensity increased when it became clear that the New Normal will last for around two years. I felt like the boy in the video, I was becoming grey.
After a few weeks, I shifted my mindset from being inward to outward focused, my thirst to share was awoken once more. It started with a free webinar on how to manage your business on the Post-ECQ using the knowledge I have gained as a back-seat IATF and hours of reading on the internet. The message was simple, to survive in the Post-ECQ MSMEs needs to go digital and Reset-Realign-Restart(a). To Reset, I re-assessed my SWOT(b), Strengths and Weaknesses during the ECQ and looked at the Opportunities and Threats then started strategizing for the New Normal. I saw that my Strengths matches with the Threat the MSMEs will face on how to operate in the New Normal and made this as an Opportunity to help MSMEs succeed in the New Normal. This will be my re-mission, a rehashed mission to re-focus to support MSMEs. I took the SMEpinoy.com brand out of the “baul”, and planned to use this as a vehicle for my re-mission. I created a BHAG and created an initial plan using the Business Model Canvass(c) framework. To Realign, I fired up again my sleeping partners in Servus and asked for a re-commitment, to continue working with those who are still willing. To get new blood, instead of finding partners or start a new company, which is unwise knowing how hard it is to close a corporation, I instead looked for new alliances with existing businesses. People who like me are just waiting for the starting gun of the lifting of the ECQ and start sprinting to do business in the new Normal.
But this was not the case, we were just brought down from ECQ to GCQ and still finding it hard to Restart. More businesses are forced to close or slow down which cause a lot of people to lose their job. Digital Commerce was booming even though the government said they will tax them. DTI said the online sellers should register their business so the online buyers can run after suppliers of defective product. I see the value of DTI’s reminder to protect the online buyers, but I also see the risks of registering your business. A business is not simply finding a product or service, branding it and selling it. The department you see at large corporations, HR, Operations, Finance, etc. must be present in any business big or micro. Although for big businesses it can be a division for a micro enterprise it will just be a function done by the sole owner of the business. Not doing this other functions is one of the major reasons why less than 0.7% of businesses in the Philippines survive more than 5 years, it is even much less during the Covid-19 pandemic. As it is hard to register a new business, it is much harder to close a business. During the GCQ, I am receiving at least five FB page group invites a day for new online businesses. Based on the statistics, from the 25 new FB page invites I receive per week only 1 or 2 will still be there 5 years from now.
Thus, I saw a new segment of society that needs the support of my MBA and more than 23 years of experience as an Entrepreneur, people who lost their old source of income and trying a new one. I took out again my trustee Business Model Canvass Template to create SMEpinoy Business Sanctuary whose mission is to guide startups from the dream stage to the expansion stage. The GCQ, as a blessing in disguise has given me time to Realign before Restarting a better planned and equipped SMEpinoy.com.
To answer the question, SMEpinoy.com and the weekly “e-numan” is how my sanity is surviving in the New Normal.
- Reset-realign-restart : https://www2.deloitte.com/us/en/insights/economy/covid-19/guide-to-organizational-recovery-for-senior-executives-heart-of-resilient-leadership.html
- SWOT Analysis : https://en.wikipedia.org/wiki/SWOT_analysis
- Business Model Canvass : https://en.wikipedia.org/wiki/Business_Model_Canvas
Episode 19 : Unboxing and testing of Xiaomi Mi Body Composition Scale 2 from vendor Mi Home PH
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If you are still not yet marketing on the web then you are missing on a big chunk of the market. Remember:
- “Over 50% of the population is below 30 years old“
- “Facebook, YouTube, QQ and WhatsApp has a bigger population than China and India“
- “93% of buying decisions are influenced by Social Media”. I would like to highlight on the word “Influenced” and not purchased or bought.
For people to patronize your business they must at least know it exists. People today use Search Engines, such as Google, to decide what to buy or where to go (ex. Restaurants in Quezon City). In the hundreds and thousands of businesses that will come out in that list, people will just look at the top 3 or at most the first page of the search. How do you get yourself on the top of the list? Search Engines rank their listing based on popularity, such as the number of unique visitors to your website. Thus, you need to make your website popular and visited regularly .
There are several activities to promote your website, such as:
- The content of your website is what would make people visit it, thus create attractive content. As the video mentioned, “80% of our mobile consumption is video” and remember a gold fish now has a longer attention span than humans.
- To Blog is to regularly update your website so people will come back. How often is regular? Well how often do you visit your favorite Social Media? But for a business, you must come out with daily updates or weekly at the most.
- Do Social Media Marketing to invite people to visit your website because that is where the traffic is. Do not ask people to visit your FB page, you are just contributing to the popularity of Facebook and not your website.
- Use the different Search Engine Optimization activities to make it at the top 3 of a search engine. Visit this site, https://support.google.com/webmasters/answer/7451184?hl=en, to learn from Google itself how you can make your website rank.
- And the long proven way of promoting your product, advertise. Compared to the classic tri-media (TV, Radio and Print), the Internet is becoming more popular. One advantage of Digital Advertising to Traditional Advertising is you can target the specific market you want to reach and at the same time accurately monitor your ads.
So what really is Digital Marketing? Digital Marketing is using the World Wide Web to do the classic marketing activities to promote your products and services through a website. Where in the old marketing you use Tri-Media (TV, Radio and Print), in Digital Marketing you are using the World Wide Web.
Is Facebook a Sales or Marketing Tool? Catch my answer next week as I continue my discussion on Digital Marketing.