Define Your Terms (Chapter 2)
Disambiguate: Sales vs. Marketing vs. Advertising vs. Outreach
This post is part of a complete, open-source resource document called Marketing For People Who Hate Marketing.
Chapter 2 - Define Your Terms
Disambiguate: Sales vs. Marketing vs. Advertising vs. Outreach
Now that we’ve got some context around the approach to selling, we need to differentiate a few terms.
Sales
When we think of the word “sales,” we usually think of a call-center with phones ringing off the hook, or a traveling Cutco Knife salesperson who is approaching “cold leads” with an offer. This is the most brute-force method of selling and it is also the most grueling.
Sales is transaction-based. I prospect potential buyers, I contact them, I pitch to them, I close a deal with them. It’s probably the form of sales you’re the most familiar with. Of these methods, it’s the easiest to measure. This is a blessing and a curse because things that are easier to measure tend to get better results–but this also can lead to a cultural problem where salespeople begin to think about their clients as numbers and stop truly empathizing with their problems. And let’s be honest, you would too if you heard the same problem on the phone 500 times a day.
Again, this doesn’t have to be sleazy. This method can be highly effective for learning about new markets because you’re talking directly with customers–which is a huge advantage! It’s also the scariest for beginners because you have to be vulnerable in front of total strangers.
Marketing
Marketing is less about closing the deal and more about building trust around your company, product, or service.
Blog posts are a great example of one type of marketing called “inbound content marketing.” Here’s how it works: I write a blog post on how to powerwash houses. Since you need to powerwash your house this weekend, you love how detailed my blog post is and share it with your friends. At the bottom of the post, I break down how much it will cost to powerwash your home by yourself versus if you hire my power washing company. You get to choose what happens next and even if you don’t hire me, you are still equipped to be the weekend warrior you always wanted to be. This type of marketing provides value to the customer first and the customer is in control of their decision.
The goal of inbound content marketing is to share a tool or resource that a potential customer can use on their own. If they decide to use your tool or resource instead of hiring you, that’s great, because they’re more likely to think of you the next time they have a problem. They’re also more likely to share that tool or resource with others who may just want to hire you.
Another useful flavor of marketing is called “direct response marketing.” Do you remember those old infomercials for the acne product Proactive? Where you’d watch a little late-night movie about how bad someone’s acne was until they used that product? And then, wait, there’s more? If you call now, you’ll get a second bottle totally free–just pay the shipping? This is the purest form of direct-response marketing.
At its core, direct-response marketing is designed to elicit some kind of immediate response from your customer, but it’s usually not a purchase. It’s most often just an email reply, or a click on a website, or a form fill. The idea is that by stringing together a series of small actions, the customer builds trust with the seller, ultimately leading them to a sale.
This doesn’t have to be sleazy! You’re not tricking people into doing something they don’t want to do! One of the principles of good direct-response marketing is “qualifying leads.” This means, if you paid for an ad that got someone on the internet to hit your website where you sell hamster cardigans, and they realized that they don’t have a hamster and they definitely don’t need a hamster cardigan and so they leave–great! The website did its job and you should be happy about it. The clarity on your website helped that person decide that the offer was not for them, which means they will be happier, and so will your customer support and returns team.
Marketing is about articulating what you do. Marketing is about showing you’re good at what you do without asking for the sale right away. Marketing is about helping customers find their own way to a solution.
Advertising
Advertising is the strangest of these methods, in my opinion. Most advertisers aren’t actually trying to create new sales, drive web traffic, or convert users. They’re focused on what we call “vanity metrics.” These are “likes,” “impressions,” and “thumbs up.” This means that the ad agencies that create those Super Bowl advertisements aren’t accountable for the results. They already know how many eyes will be on that ad. They’re more interested in their advertising awards ceremonies at the end of the year, which is how they sell themselves to their clients. That said, they can still play a powerful role.
If I showed you a red billboard with a white swooshy line across it and with no text, you would somehow know–even without any words or images–that the billboard is for Coca-Cola. This is called “brand recognition,” and Coke paid a lot of money to own that space in your brain.
Even as young as 4 years old, children can not only recognize brands, but actually have brand preferences. For example, Sesame Workshop found out that if they put Elmo on a toothbrush, kids would actually brush their teeth.
This effect is so powerful that if I want to sell you a Mercedes when you’re 37, I have to start showing you ads when you’re 6 years old, and for the next 31 years I have to show you that Mercedes is the best car you can buy. So, for 31 years, I spent a lot of money and didn’t see any results. This approach is typically for large, established companies, who can afford to wait on their investment. It’s also difficult to measure, which makes it riskier, especially for small businesses.
Community Outreach
This one is my personal favorite, but it’s very easy to execute this poorly and get no results. Similar to Advertising, Community Outreach is hard to measure, which makes it riskier, especially for small businesses or businesses that do small but frequent transactions–like a coffee shop.
Community Outreach is centered in community support and involvement. Patagonia started Action Works, a website where community activists can go to find others working on problems in their community. They also help train activists on how to be more effective. Wow. That’s commitment to the cause. It also builds incredible trust with customers. Buyers feel confident when they buy an R1 hoody from Patagonia because they trust that their dollars will be used in alignment with their values.
This is a long-term, high-involvement approach, but it creates intense brand zealots.
When AirBnB got big enough, some municipalities started to recognize that they were encroaching on the domain of the hotel industry. This was problematic because hotels have long-standing contracts and relationships with urban development centers and tourism departments. This is one of the few times where a business truly “disrupted” an industry.
Thus, AirBnB realized that they would never win by out-negotiating the powerful hotel lobby. They realized that their approach had to be grassroots instead of top-down. They hired community organizers, who activated their top customers. Those customers showed up at town hall, protested, and voted to make sure that AirBnB would have a place in their city. This is a remarkable example of how the power of community outreach can make or break a business.
If you’re fascinated by this story like I was, check out Douglas Atkins’ talk about this approach.
Product vs. Service
If you had to start a brand new business, I would tell you not to start a service business. They’re the hardest to develop and scale.
Products can be manufactured and only sometimes need to be updated or modified. They can be digital and cost very little to deliver, often providing you with more desirable margins.
Services are harder to describe and price because you’re either selling expertise or commoditized labor.
Expertise is hard to tie to discrete value. If you don’t believe me, just ask a designer how much a logo is worth. They’ll laugh and tell you “it depends.” It also can take a whole career to develop deep expertise.
Commoditized labor is easy to tie to a discrete value, since there’s a whole market that will generally agree about cost and rates. The only problem with this kind of business is that there is usually a race to the “pricing bottom.” If every freelancer is doing the same work in this category, it’s hard to differentiate, so it’s tempting to want to beat the competition on price–which never ends well for anyone. Beware the unsustainable trap of discounting your services.
Products are generally easier to scale because you can just “make more widgets” and keep up with demand. Services are more difficult to scale because your team can only work a limited number of hours per week. This has led to the “productization” of many services, but this is never a 100% solution.
An example of a “productized service” might be a talk that you give, but have recorded so that you can deliver the information virtually. Obviously, you can already tell that this technique is for businesses that want to scale–but it can only deliver a generalized framework that the customer will have to use themselves. Productized services are one-size fits all, and may not be the right solution for your client.
If you do business consulting, that’s great. You might write a book to help position yourself as an expert and “teach someone to fish” but the more complicated your field is, the more likely you are going to need to be part of the process to attain excellent results. Most people, even if you give them an amazingly detailed manual, will not be able to swap out the gaskets in the intake manifold on their car. They might not have the tools, the time, the patience, or the confidence to trust their work. All of these things are part of the value you offer in providing your service.
Product marketing is easier to do digitally and with simple ads. It’s usually easier to explain what you do (we make magnets so your iPhone doesn’t fall and break when you drive) versus if you do creative work (we make logos so you can, um, look good and hopefully make more sales, just believe us).
The lesson here is that referrals are the lifeblood of a service business. They will help you grow, retain clients, and decrease your customer acquisition cost.
It’s also unfair to say that businesses are either product- or service-based. Just look at the events industry. Is a show at Red Rocks Amphitheater a product? Is it more like a service?
Don’t feel like you have to disambiguate whether you sell a product or a service, it’s more important to just understand them conceptually so you can decide what will work best for you.
Relationships, Referrals, and Reputation
Referrals are the life-blood of the service business. Since service businesses are generally selling creativity or expertise, it can be as hard to price as it is hard to measure success. For instance: how do you measure the success of a logo? The owner’s opinion?
The general thought here is “if I do great work, people will love me, they will think of me when their friends need similar work, and they will mention me. If this keeps happening, I’ll develop a name for myself and I won’t have to fight so hard to survive.”
This is mostly true. The only trouble is that most businesses expect the process to happen naturally after the work is done. This is a huge mistake.
Every business is a marketing business. No exceptions.
If you have relationships, you need to reach out to them and let them know about you. This is very uncomfortable for most people.
Consider this diagram from the book “How Clients Buy:”
The Seven Elements of the Client’s Decision Journey
from “How Clients Buy” by Tom McMakin and Doug Fletcher
This diagram seems pretty straightforward to most people, yet most small businesses don’t take every step seriously.
A relationship you have is just your first opportunity to start validating this cycle. Relationships also need to be maintained and updated. Depending on your business, this could look like anything from a one-on-one annual strategy call to a newsletter. Your job is to contribute to the relationship. When it’s time to make an ask you’ll feel a lot better if you know your social balance isn’t 0.
Good relationships can present referrals. Again, don’t think your job is done once your project is finished. Your job is to make it so easy and even fun for your client to recommend you. Some businesses offer a “Finder’s Fee” such that the referrer will get compensated for the referral they provide. Some businesses
You may want to start your relationship by getting buy-in for your next referral and saying something like “our customer success rate is 99% right now. If we deliver everything on this scope of work and exceed expectations, would you consider writing us a customer success story that we can put on our website?” This puts the power in the hands of the client and sets you up to feel comfortable asking for the referral later on.
The hard part about this process is that reputation is a long-term investment. It takes time to develop a critical mass or “client base” that is invested enough in your success that they regularly think to refer someone to you. This might be accelerated if you live in a small town, where there’s only one PR firm or only 3 coffee shops. The size of the pond matters.
Features vs. Intangibles
There’s a saying in sales that goes “sell the sizzle, not the steak.”
It sounds cliche, but it’s so, so true.
When Steve Jobs wanted to start selling iPods, he told customers that his device could hold 1,000 songs. Meanwhile, the rest of the industry was saying “our device is 3GB, isn’t that great?” We know how that story ends–the iPod became the top grossing MP3 player of all time.
Here are some more examples that will help you get in the mindset of talking about the benefits of your product/service instead of the features:
DON’T SAY
Our apples are fresh and red.
DO SAY
An apple a day keeps the doctor away.
DON’T SAY
Our glassware is made of crystal.
DO SAY
Our glassware is odorless, stain resistant, and will last a lifetime.
DON’T SAY
Our dog food has vitamins and minerals
DO SAY
Our dog food has been proven to extend your dog’s life by 2 years.
Chapter 2 Recap:
Sales is best for short term, fast moving, product businesses that rely on clear metrics.
Marketing is best all around for most businesses and budgets especially for insurgent brands.
Advertising is best for world domination, huge budgets and projects that don’t require performance-based metrics.
PR is best for personal brands, people, and leveraging human sensibilities.
Outreach is best for tight communities, zealots, and for businesses who can wait long-term for their return on investment.
Products are easier to talk about, price, and sell at scale.
Services can bring in more money, but require more effort and creativity to sell.
Relationships must be cultivated. Referrals don’t reproduce. Reputation takes time and requires maintenance.
Use a customer centric approach by talking about the benefits they’ll get instead of the features you have.
NEXT UP - Chapter 3 - The Problems With The Common Funnel Approach
The fatal flaws of the world’s most popular diagram for designing a marketing plan.
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