Over the past two decades, through Raizcorp, I’ve had the privilege to work with over 13 000 small businesses. This sample size has given me great insight into the common characteristics of success and failure within the entrepreneurial context. It is one thing to survive as an entrepreneur but a completely different thing to thrive.
When analysing businesses that have thrived over the years, the entrepreneurs all share two common characteristics: they can market and they can sell. Even more importantly, the entrepreneurs see sales and marketing as their responsibility even if they have sales and marketing teams within their organisations.
On the flipside, those businesses that are failing or limping along also share common characteristics: sales and marketing are not prioritised and the entrepreneurs are either not interested or, more commonly, afraid or both. If you can’t sell or market, my advice is simple: don’t start a business!
Below are five common marketing and sales habits of successful entrepreneurs.
1. They see sales and marketing as critical competencies
Successful entrepreneurs don’t see sales and marketing as a core competency. They see them as a critical competency. They occupy the place of highest priority in the entrepreneur’s mind.
I was once told by a creative director of an advertising agency that did work for Vodacom that the visionary Alan Knott-Craig who built Vodacom never allowed one advertising campaign to go out without his approval.
He got involved in every brief and strategy and, if he wasn’t 100% satisfied with the creative execution or strategy, he would simply reject the campaign and ask for another.
Sales and marketing über alles (above all).
2. They apply the ten per cent rule of thumb to sales
Successful entrepreneurs apply the ten per cent rule of thumb when it comes to the size of their sales departments. Of course, this percentage varies from industry to industry but the ten per cent rule of thumb says that a minimum of ten per cent of your staff complement should be involved in the creation of sales.
Organisations that fall below the ten per cent rule generally perform worse than those that lie above. Keep an eye on this percentage as the business grows.
3. They apply the five per cent rule of thumb for marketing
Successful entrepreneurial businesses spend, on average, five per cent of their revenue on marketing. Startup businesses might go as high as 20% of their revenue reducing this to the five per cent benchmark over time.
They monitor this percentage quite closely as revenues increase and are very disciplined about increasing the marketing spend accordingly because they understand that the bigger the organisation, the higher the client attrition numbers and therefore the higher the importance of marketing as a support function of sales to replace the attrition and bring on additional sales.
4. They are obsessed with sales and marketing
Successful entrepreneurs are obsessed with sales and marketing and their bookshelves contain numerous books on these subjects. They attend conferences, send their staff on conferences and have a deep need to keep up to date with the latest techniques, practices and trends.
They regularly visit YouTube channels devoted to sales and marketing and listen to relevant podcasts. In a nutshell, they keep sales and marketing top of mind and constantly pass on reading, listening and watching recommendations to their sales and marketing teams.
5. They never abdicate sales and marketing
If you visit YouTube, you will find clips of Steve Jobs in a dingy basement talking to salespeople from consumer electronics stores about such new devices as the iPod, the iPad or the iPhone. No opportunity was too small or too big for Jobs even though Apple has a massive sales and marketing force.
Jobs never abdicated his role in selling Apple products and marketing Apple, the company. The same can be said for Bill Gates, Jeff Bezos and all the global giants whose founders are still out there selling the company, its vision and its products.
They never abdicate their roles as chief marketing officer or chief sales officer even if these are not technically their titles.
It still fascinates me how many small battling businesses do not understand the correlation between business success and the founder getting out there to sell and market.
I’m still confounded that so-called entrepreneurs will start a business despite having a deep fear of sales and marketing or, more accurately, a deep fear of rejection and who still believe they can run a successful business by outsourcing sales and marketing to a person who may have the technique and know-how but who certainly won’t have the product insight and same passion for the business as the founder.
At Raizcorp, we receive many requests to invest in businesses every month. When I meet these entrepreneurs, one of the first things I try to understand is his or her relationship with sales and marketing. If the relationship is hands off or non-existent, these meetings tend to be very short. If the relationship is deep and strong – and preferably obsessive – these are the entrepreneurs that I look to back.