Although many people use the terms sales and marketing interchangeably, there is a subtle difference between the two. Both functions intend to grow the revenue of a business, but the way they try to do this differs. Understanding the difference between sales and marketing can help you integrate them better to achieve your company's revenue goals. In this article, we discuss some important differences between sales and marketing from various aspects like goals, process and strategy.
Why it's important to understand the difference between sales and marketing
It's important to understand the difference between sales and marketing because you need to integrate both functions in your organisation. Understanding the thin line between them helps you make them work in tandem to increase the revenue of your organisation. While preparing an organisation's budget, you need to make a proper allocation for each business function. A good understanding of differences helps you prepare a balanced and efficient budget.
What is sales?
Sales is the process of selling goods and services. It involves convincing potential customers to buy from your company. The convincing can be through various means such as explaining your product's benefits, offering discounts or making your product more attractive than that of your competitors. Some common sales generation methods include making cold calls, holding one-on-one meeting with business leads, participating in trade fairs and promotional events and cross selling (selling another product to an existing customer).
Sales is the starting point of a contract between a business and its customers. A company often looks to retain its customer-base by nurturing a positive relationship with its customers.
Inbound sales vs. outbound sales
Inbound sales is one in which the customer comes to an organisation to buy a product. On the other hand, in outbound sales, a business reaches out to a prospect, usually through its sales department, and closes a deal. For example, if a customer visits a retail outlet and buys a product, it falls under inbound sales, whereas if your company's door-to-door sales executive sells a product, it's an example of outbound sales.
Inbound leads are relatively easier to convert since the customer has an active interest in your organisation's product. However, some inbound enquiries may be exploratory and may require more efforts and follow-up by the sales team.
What is marketing?
Marketing is the process of making people interested in your product through various strategies like pricing, packaging, positioning (creating a perception), placement and promotion. Marketing efforts of a company may or may not focus on generating direct sales leads, but they definitely intend to make sales easier and increase revenues over a longer period of time.
For example, marketing teams often work on intangible strategies like creating a brand image and improving public relations. Having a good brand image may not generate direct sales leads, but it definitely influences customers to make a purchase decision in favour of the company's products. Thus, marketing mainly focuses on analysing customers' needs, interests and behaviour in order to make products more appealing to them.
Inbound vs. outbound marketing
An inbound marketing campaign follows an indirect approach instead of directly promoting a company's products. It makes customers come searching for them. Most of the inbound marketing campaigns take the form of digital marketing. For instance, companies often publish engaging content on their blogs with an intention to solve customers' problems and establish themselves as an authority in their industry. Other examples of inbound marketing include search engine optimisation (getting ranked in search engines for relevant keywords), and social media marketing (networking on social media platforms).
Outbound marketing refers to typical traditional marketing techniques like TV commercials, billboards and product mailers. It focuses on directly promoting a company's products to its target customers.
Difference between sales and marketing goals
Sales and marketing both focus on generating revenue for an organisation. However, marketing mainly focuses on long-term goals, whereas sales has a relatively short-term perspective. Sales departments usually run on tight periodic targets, while marketing goals are often intangible in nature. Marketing campaigns may not have an immediate visible impact on a company's revenue, but they still help the company grow over a longer period of time.
Examples of marketing goals:
- Research customer needs and interests
- Build a brand
- Improve product awareness
- Increase customer satisfaction
- Maintain customer relationships
- Establish the company as a leader in its industry
- Generate qualified leads
- Launch a new product
- Reposition a brand or a product
Examples of sales goals:
- Increase monthly revenue
- Close sales
- Retain existing customers
- Increase profit margin
- Lower customer acquisition cost
Difference between sales and marketing process
Here are the broad steps involved in typical sales and marketing processes:
- Prospecting: Create a list of target customers and perform preliminary research on them.
- Connecting: Connect with your prospects, often through cold emails or phone calls.
- Qualifying: Qualify your leads based on their response, need and readiness to buy a product.
- Approaching: Schedule an appointment and meet the qualified leads.
- Product demonstration: Showcase the product and explain its features and benefits.
- Objection handling: Listen to your prospects' objections, understand their perspective and address their concern.
- Closing a sale: Negotiate the price, create a proposal and close a deal.
- Onboarding: Deliver the product and help the customers get started with it.
- Following up: Support customers with after-sales service, retain them and turn them into repeat buyers.
- Research: Study the market and your potential customers.
- Segment: Divide your customers into different segments based on their characteristics.
- Strategy: Build a marketing strategy for each segment you want to target.
- Position: Define the distinguishing features of your product and highlight them in your marketing campaigns.
- Campaign: Create and run marketing campaigns.
- Performance: Measure the performance of your marketing campaigns.
- Fine-tune: Modify and fine-tune your marketing campaigns based on their performance.
Difference between sales and marketing strategies
Marketing strategies focus on reaching your target customers while sales strategies focus on converting them. Following are some examples of sales and marketing strategies:
Sales strategy examples:
- Cold calling: Call up a pool of prospects and pitch your products.
- Door-to-door sales: Sales executives reach out to customers with the product and close deals on the spot.
- Discount sales: Companies offer a discount on a certain range of products for a limited period.
- Discount coupon: Companies issue discount coupons to certain sections of customers, for instance, those holding a credit card of a certain bank.
- Trade fairs: Companies exhibit and sell their products in trade fairs.
- Cross-selling: Companies pitch other products to their existing customers. For example, a bank may sell credit cards to its savings account customers.
Marketing strategy examples:
- Product-focused marketing: Companies highlight various aspects of their product, such as quality, size and packaging.
- Price-focused marketing: Companies make buying attractive by various pricing strategies, such as low pricing, price matching (offering to beat competitors' price) and premium pricing (as a symbol of high quality).
- Status marketing: Companies position their product as a status symbol and reserve the right to decide who they sell it to. For example, a high-end car manufacturer may choose to sell its car only to a select group of high net worth individuals and influential people, giving them a sense of exclusiveness.
- Online marketing: Companies market their product through search engines, emails and social media platforms.
Other differences between sales and marketing
Here are some other differences between sales and marketing:
- The sales process takes an individualistic, customer-centric, one-to-one approach, while marketing is media-driven and targets the entire segment.
- Sales fulfill the demand, while marketing creates a new demand or fits a product into an existing demand.
- Marketing focuses on moving the product from the company to the market (through product launches and awareness campaigns), while sales focuses on moving the product from the market to the customer.
- Sales focuses on the needs of the company, while marketing focuses on the needs of the market.
- Sales begin where marketing ends.
- Sales is relationship-driven, whereas marketing is image-driven.
- Sales requires convincing and conversational skills, while marketing requires analytical skills.
- Sales aims at maximising profits, while marketing aims at increasing market share and customer satisfaction.
- Marketing attracts the customers towards the product, while sales pushes the product to the customers.
Why align sales and marketing
Despite their differences, sales and marketing efforts give their best results when they are aligned with each other. For example, research from the marketing department can help the sales team process sales more efficiently. Avoiding contradiction between the marketing message and sales pitch reinforces customers' conviction in the product. Similarly, sales professionals can offer useful insights about customer behaviour to the marketing team for better positioning of the product. Integration and alignment of sales and marketing helps a company reduce cost and increase return on investment.