TRANSFER OF POWER: MARKETING TO SALES

This article is my personal observation and nothing to relate with where I work and what I do. Its just a comment on a certain developing trends in CPG space. This may ignite an age old debate on Sales Vs Marketing, but both are important. Sales is a body to a mind (marketing) and as the saying goes, a healthy mind resides in a healthy body.

Moving on from that disclaimer, as one sage marketer said, we can learn from past more rather than fancy future projections. I do agree with above statement and believe future prediction is difficult albeit important to keep looking forward. Hence the numbers, we mostly posses past numbers, we do have can tell us about our performance.

Why I am talking about numbers here? Because there are two numbers and these two teams Marketing & Sales teams believe in different numbers, well until sometimes back, when both started believing in one number only - and that's where idea of this article germinated.

Marketing had gained its seat at top because it could go beyond what sales teams could imagine and bring to the table. From advertising to innovating, from becoming national to going international. It all started in US with people like Claude Hopkins started making an impact with mass advertising in 1960-70s, concept of branding and recalls to present day's personalized data driven targeting.

A normal conversation (easily becomes confrontation sometimes) between sales and marketing department goes like this: Marketing will boast about what GRPs they have spend, their increased SoV (Share of Voice - a Market Share of all spending on advertising), new creatives and innovative products followed by trade and price promotions while sales team retorts that it's their effort to distribute and deliver that makes things moving. Both teams used to rely to showcase their prowess via on their own numbers, marketing on 3rd party unbiased independent data while sales on their own internal sales and distribution numbers.

Some may say that I am beating my own trumpet but I am seeing a trend where marketing has started believing more on internal sales numbers, much more than 3rd party unbiased numbers. And why is very simple - these internal numbers are looking better from some time, post lockdown months. Why better? Because CPG suffered a big blow in terms of continuity of supply and because in neural-network of India's complex distribution, local players, with market closeness and agility did benefit during disruption to large player's existing route to market. As the giants are awakening, they filling pipelines, re-supplying broken RTMs and reaching where they always were. What it does? A boom and highest ever sales. Why there is a highest ever sales? Did consumer started buying 1.5X or 2X suddenly? Specially during century's worst pandemic? Where GDP is declining and job losses are at galore? Also when marketing is not advertising, lowest GRPs and SoVs, no to low promotions. That's what one needs to think.

What happens when marketing starts believing blind folded in internal sales numbers (mostly controlled by sales team) - I have doubt over how many companies can claim true accuracy for those internal records - and leave existing practice of using guidance by independent 3rd party. There is a phenomenon in statistics called Goodhart's Law, which states that if solely focus on one number, that one number becomes useless. For example, if police only focuses on stopping shoplifting and no other crime, and they show their performance as drastic reduction in shoplifting rate, then shop lifting rates becomes useless to gauge performance of police.

Marketing had an upper edge because they could still ask Sales team to push harder in case 3rd party unbiased numbers were better and if those were not, there was always a way to look inwards of how consumption is more gradual than a sales drive. They could use variety of different data points like quality of distribution, availability of stocks, actual monthly distribution and competitor's performance to gauge and guide. Sales push to market behaves just like a morning run, you can run quite fast for a few minutes but as you lose stamina, you walk, regain your breath and run again. There can't always be running.

What happens when sales team starts walking to take a breather? Obvious result is these booming trends will going to decline? As supplies are filled, and reality of a pandemic low buying still exists.

What will be the new conversation then? Marketing will harp on them restarting spends on GRPs, high SoV and promotions- and will question decline in sales. And from my personal experience sales team will reply - "Market is down", "Stocks are not sold", "Its the case with all", "We continue to push harder like a sprint".

What's the counter with Marketing team? As SoV, GRPs are some mumbo-jumbo words for sales team. It was that 2nd number- the 3rd party unbiased number - as their power throne, which made them take a top seat, their USP is missing. Its like giving power back to sales team. Believing in a number which they collect and they show, which only talks about your own self, and nothing about market reality.

Specially for Marketing Insights team rely heavily on data to make strategies and plans and they have grown using data to drive actionable insights. That's what they do atleast 50% of the time, so they better device a plan to think of something really fruitful for a free time they are going to get. As more and more teams like branding and innovations stop consulting them for their activities, their stature in organizations will be questioned.

Another factor that plays in corporate (marketing) politics is - more budget for more power. Now money saving is one of the agenda where Marketing Insights team can show how much savings they did for organization by not utilizing 3rd party independent data. Well they were suppose to provide guidance for incremental revenues and not save money (budget for this kind of data buying is not more than 0.2%-0.5% of annual revenue though). Think about a conversation next year budget planning. Finance team will look at data and say, "You only utilized 50% of the budget allocated to you. I am reducing your budget allocation to 50%". Well here you go, importance of marketing insights drops in same proportion.

Meanwhile lets Sales rule for sometime, they deserve it for the hard work done, for being in the market during one of the toughest times.