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This question has been closed, and points have been awarded.
Ratio Of Sales To Marketing Staff
Posted By: Stokefire* on 11/16/2004 2:52 PM (CST) 1234 Points
Okay corporate marketers, here's the challenge:

In a 50 person software company what should the ratio of Sales staff (including Outside, Inside, and Sales Engineers) to Marketing staff (including PR, Events, Marketing Communications, Sales Tools, Web Site, Documentation/Collateral) be and why? Provide convincing arguments that will back up your opinion.

Assume a Sales staff of approximately 15-20. How many marketing staff should be on-board to support this level of Sales staffing.

A few guiding facts:
* The product sold is enterprise B-2-B software with a total price that ranges from $25K to $2MM depending on number of units purchased.
* The sales cycle is approximately 6 to 18 months and is very high-touch (between 5-10 visits)
* The company sells a single product with a few different add-on modules. The same package is sold by all.
* While the product is sold internationally, there is no current need to produce documentation in other languages.
* The CEO has requested the ratio, but has conveyed he expects the number to be pretty close to 1 or 2 Marketers for 20 Sales. Any other answer will require iron-clad supporting arguments.

I'm sure there are more facts and variables that might sway the answer, so I encourage all of you to ask away to refine the answer.

This is a real-life conundrum, as quite a few suggestions have been sent up the line and they've all been shot down. What has been tripping this up is that while you can logically show that there is ROI attached to marketing events, it seems more difficult to establish ROI for a *well run* event or clean PR piece versus one that is slapped together. How can you quantify the difference to the bottom line that will be the result increasing staff to improve marketing effectiveness?


The questions (repeated)
1) What is a good ratio of Marketing to Sales and Why? (Provide iron-clad justification if possible)
2) How can you quantify the value of well done marketing versus poorly executed marketing?
3) What would the expected result be from not staffing up marketing to support the sales effort? Why? (Examples?)
4) Could it be that I'm wrong in assuming more
marketers are needed to support this effort?

This could be a difficult one to answer, so I'm throwing quite a few points at it. You'll get points and my eternal gratefulness for any serious attempts to answer the questions.

...and I did look around both on Google and KHE for answers to this problem and couldn't find anything that directly applies. (I did find information on how to sell marketing to a CEO, but that wasn't quite what I was looking for.)

...last... I feel like someone else is defining the game here - and I don't much like the rules. Someone help me change the game, please.

Thanks

Tate

Posted by: Peter (henna gaijin) Member Response
11/16/2004 3:01 PM (CST)
My thoughts - 2 people. Some sort of product/marketing manager and some sort of MarCom person.

Product/Marketing Manager would guide the marketing strategy and be involved as the customer voice in the product development side. They are also the product's evangelist. And as a secondary responsibility, they would provide the input to customers (so sometimes go on sales calls) about the vision for the product line.

The Marcom person is much more tactical - and have the main goal of actually doing the work (producing literature, ensuring that everything is ready for the trade show, etc.).

It is quite possible the level of work of the MarCom person would be too high, in which case you might need to outsource part, use an admin for the administrative side, etc.

This is also assuming that you have some sort of technical sales engineer, who would be the technical person called on by sales.

Check out the articles at http://www.productmarketing.com/topics/index.htm for some interesting breakdowns on roles and responsibilities for enterprise software companies.
 
Posted by: Stokefire* Author Response
11/16/2004 3:08 PM (CST)
Very interesting Peter.

I'm entirely open to the possibility that I'm wrong in thinking the number should be higher.

The current workload seems too much for the staff, and I'd been assuming that collateral, web, events, and PR would each be managed by a different individual.

I come from a larger corporate environment, so I'm used to being able to throw more bodies at a project. Perhaps that just doesn't apply in this environment.

I'm certainly interested in more opinions, though.

Tate
 
Posted by: D4Demand Accepted Answer
11/16/2004 3:26 PM (CST)
I agree with Peter. Unless you are designing most of your graphics in-house, two to two-and-one-half people is about what you need.

I currently support 300 sales people and 55 branches with a staff of 4, 3 of whom are graphics people who are very very productive all day.

I was a partner/consultant to a startup company with an enterprise software product. We outsourced design and fulfillment and drove most of the "brochure"content over the web. We would assemble teams of marekting contractors when necessary.

To justify more people, though, here is how you structure the argument. "Do you want to pay a graphic artist $40 to $60 per hour and have to do two or three revisions, and an agency geek $85 to $100 per hour to be an errand boy, or do you want to have a person in-house whom you pay $10 to $15 per hour to be able to do all the work in-house?"

Most of the companies I've worked for do not want to pay anyone else a profit for what they could do in-house.
Control is better in-house, too, and you can task the person to all kinds of other projects, as well.

Base your argument on the costs of the alternative solution.

And, yes, you will get by if he cuts subordinate head count.


Good luck.
 
Posted by: Deremiah *CPE Member Response
11/16/2004 4:10 PM (CST)
Tate,

In this melliemium under a very decent company I've seen 36 people only have a support group of two and sometimes one marketing person. If you would like to know more please respond. Is there anything else I can do for you?

Your Servant, Deremiah, *CPE (Customer Passion Evangelist)
 
Posted by: Peter (henna gaijin) Accepted Answer
11/16/2004 4:26 PM (CST)
The current workload seems too much for the staff, and I'd been assuming that collateral, web, events, and PR would each be managed by a different individual.

The first sentence does tell a lot. If you have many projects going, then you may need more than what I said. Watch the work loads you have and see if it is justifiable to add some more headcounts (or use contractors) to get work done faster. Do keep in mind, though, that there will always be too much work - it is when work that really would be beneficial is not getting done that you need to get more resources.

On separate duties, there is something to that. Particularly with the web, as it usually requires very specific knowledge. But you probably wouldn't want to bring in a full time person until you have the work to justify it. Outsource or put two or more duties on one person.

The web could possibly be done (the actual coding) by one of the software folks you have, but it would take good guidance by someone within marketing on content and look.
 
Posted by: Stokefire* Author Response
11/16/2004 5:21 PM (CST)
Quick responses:

D4D - The company does not really do graphics at all, and suffers as a result. Presentations use stock templates, or stuff thrown together from very old artwork or previous version of product demonstrations. This may be part of the problem - prospects see the company as small and out of date, perhaps because the marketing presence is hampered by lack of applied technology and graphics expertise on in the collateral and at tradeshows. The product gets all the attention, but the medium of the message does not.

A similar idea to yours was proposed regarding staffing costs. The push back was along the lines of "We will not be outsourcing the job, and we aren't going to hire for it, so let's figure out what the best you can do is." There comes a time when out of the 37 things one is responsible for there are a sum total of none of them that actually get done well. When every project is understaffed (a 1/37th share of a week is not much time to write and edit PR, or organize an event, or show ROI on a completed event, or...) it leaves the impression that marketing is just not an effective use of money.

Deremiah - Perhaps part of the confusion is that more than the traditional marketing tasks are assigned to the group. I've worked at corporations that had similar ratios to the one you mentioned, but marcomm, PR, documentation, events, and just about everything else was not produced by marketing. In those instances marketing only produced messaging and collateral for the team, with the other groups handling their requisite tasks. If you are saying that a single person handled all these tasks I would very much like to learn more about the company and person to see how they were able to do it.

...and Peter, again!
I agree with the two duties in one person approach. I had thought a Graphic Artist/Webmaster would be a good mix, and perhaps a collateral/PR mix. I also like your suggestion to use other resources internally as appropriate to fill the void. This of course assumes that the development staff has bandwidth... somthing I'm pretty sure would not be a safe assumption... I assume...


...

So... I think I'm getting the type of feedback I'm looking for, but I'm not quite sure.

The competition has a HUGE marketing staff - with 2/3 as many marketers as they have Sales staff. There's a very high expectation to match the competition (or at least draft behind them) in terms of market presence.

...I suppose this would have been one of those things I should have mentioned at the start.

Mea culpa.

Tate
 
Posted by: km2000* Accepted Answer
11/17/2004 10:02 AM (CST)
Tate,


My general feeling is that you are understaffed, but this is specifically a word about the Graphics/Webmaster mix. (From someone who did it for a brief period of time.)

A Webmaster traditionally handles the technical side of things, not the artistic. Combining Graphics with it would be similar to asking an Product Engineer to also handle the Pr side of the product... he knows his product and makes it work really well... that doesn't mean he can distill that information and knowledge down to a digestible level and make it visually appealing as well.

A Web Designer/Graphics person would work, but I'd let the Webmaster be a solitary position.

Just for the record... I'm not a Webmaster... not in the least. :) (I'm barely 'master of my own domain' much less master of the web versions!) *chuckle*

k.
 
Posted by: jose04 Accepted Answer
11/17/2004 2:00 PM (CST)
Hello Tate

Interesting situation!

The CEO would be familiar about how the marketing orientation of a firm will be decided by the pro-marketing stands of the leader and the management as a key stakeholder in your organisation.

I'll take your last qs. first.
Could it be that I'm wrong in assuming more
marketers are needed to support this effort?

You are not wrong in assuming that more marketers are needed, because every effort (like the marketing contributions) has a reward. THis has to be optimum and efficient and to be one up on the competition, needs to better their ratio. The Sales team in your sales cycle of 1-18 weeks, does require more support. We all know that Marketing is not only about getting leads alone, but also about building content, all along the sales cycle.

Customers require feedback, data and presentations (in the type of mediums you suggested) so that they carry impressions which make them feel good. The marketing team is the angel arm with the 'working' wand, spinning profits for the organisation. The sales team require this sort of calculated support from a marketing team which can spin a consumer oriented web to maintain lasting relationship with your s/w company. A customer convert from the many leads have to be serviced and maintained. This is not just the job of the salesperson. Agreed, that the sales team is the only contact/s the client appreciates, but the synergy produced for them lie with the content, finesse and style, produced professionally and quickly by a pro-consumer marketing team, who knows all about making profits, maintaining ROI and building relationships. THis is a kind of entrepreneurial job and should deservedly get more than $10-15/hour, even if they work inhouse.

This collaborative attitude is more of a 'mind act' which needs acceptance/approval by any professional, futuristic oriented and genuinely consumer oriented companies. I believe that your s/w organisation (with you there) is one such firm, which should accept the latest marketing definition given by the AMA as follows:

"Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders."

Value generation is a team act, and we all know that creative contributions best expresses itself in creative and really 'free' environments. Oppressive, stifling, boring, and routine/mechanistic environments kill such creative possibilities. Marketing as we seem to generate in this new millenium, requires an assertive propagation of its presence among the other functions of a business. If the sales/ marketing ratio in your s/w company is as low as 1: 20 or 25, i would say that is indicative of an oppressive environ for the creative marketer. They would either burnout or will have an early retirement. Also, routine template solutions does not indicate customisation, which is where the future of marketing should be getting into.

Your first qs. What is a good ratio of Marketing to Sales and Why? (Provide iron-clad justification if possible)

I wouldn't venture into estimating such a ratio meaningfully, for your s/w co., without understanding the data on the usual sales process, experiences of selling (objections handled, returns ratio, stagnancy effects, customer retention analysis etc) existing in your firm.

I'll wait for your comments before i venture into your other two qs. I guess i've answered (at least partially) qs. no 3 already.

Hope these thoughts help!!
 
Posted by: Leaky Funnel Accepted Answer
11/18/2004 7:46 AM (CST)
Tate

I'm going to swim against the tide on this one, and in the process make my first post for 7 months. Graphics and web are perhaps the least of your worries, and can easily be outsourced, as can other creative, and events if you need. The execution of these is likely to be the source of differentiation in the market.

You need to resource for those activities that are likely to be the source of advantage, plus those that you can do more cost- or time-effectively in-house.

Strategy should be in-house, as should product advocacy, demand generation planning and management, and lead qualification. My take would be four to five. If you need to shave headcount numbers to keep the CEO happy, lose those you can afford to lose, not those who make most difference.

I base this on 170 B2B strategy projects for IT&T companies over the last seven years.

Hope this helps.
 
Posted by: whitefeud Accepted Answer
11/18/2004 7:57 AM (CST)
The questions (repeated)
1) What is a good ratio of Marketing to Sales and Why? (Provide iron-clad justification if possible)

Every 5 salespersons you need 1 Marketeer.
This method brings the customer needs near the company through a 5 salespersons channel.

2) How can you quantify the value of well done marketing versus poorly executed marketing?
Though Market Reasearch.

3) What would the expected result be from not staffing up marketing to support the sales effort? Why? (Examples?)
You will not be able to 'feel the direction of the wind'

4) Could it be that I'm wrong in assuming more
marketers are needed to support this effort?
No, you are not wrong. If the number of marketeers is small then only the basic or day to day problems will be solved.
 
Posted by: night_butterflz Accepted Answer
11/18/2004 6:49 PM (CST)
1. Ratio- a few marketers are need to throw ideas around. Think teamwork. I would say marketing director, asst. marketing director, marketing assistant/consultant, and a marketing intern would do it.

2. Value-Research, response rate, customers know who you are, campaigns are memoriable in the consumer's mind. Good feedback from community etc. You will know bad marketing when you see it.

3.Your company will be known as a selling haven instead of a brand loyal haven. Sales may not be able to keep and target correct audience

4. no, marketing is important. But so are PR, ADV, and promotions.

(The team (quet. 1) is the marketing team. Add in a PR specialist and a graphic designer and you have a complete team.

jen
 
Posted by: telemoxie Accepted Answer
11/19/2004 7:44 AM (CST)
Welcome back, Leaky Funnel. Where have you been?

I agree with Leaky Funnel and Whitefued that you need more than 2 - especially if you are rolling out new marketing programs. You have asked for more, the CEO has said no repeatedly, what can you do?

If it were me, I would identify a list of my primary competitors (possibly from lost sales analysis - are you doing this?). I would quickly survey those companies, I would gather samples of their marketing materials, and I would calculate the percentages as best I could for those companies. Without wasting too much time, I would also attempt to obtain any position descriptions that I could for marketing or sales positions posted by my competitors, so that I had some data points on the functions performed by the marketing staff of those companies.

Rather than presenting an ultimatum to the CEO, I would present a sliding scale: here is what I can do myself with contractors, here is what we could do with 2 staff, here is what we could do with 4 staff. He'll probably pick the option with 2 staff - get over it. You will need to outsource projects to contractors.

When the sales staff starts asking for more than you can deliver, you will then be in a stronger position to augment your staff.
 
Posted by: Stokefire* Author Response
11/19/2004 9:19 AM (CST)
Well... for the 4th time I've had the entire text deleted when I hit the back button. Just wanted to let you ALL know that the opinions have been received and valued.

I'll have personal comments for all most likely over the weekend, when I have a chance to use my home computer (which I hope is not similarly possessed by evil deleting gnomes.)

Thank you!

Tate
 
Posted by: redgreenblue* Accepted Answer
11/19/2004 10:13 PM (CST)
Tate,

My first and only post (that I can remember!) ..... Some thoughts from one who's worked in marketing at B2B IT vendors for over 20 years, including senior roles at some very well known software companies:

1. Think of the problem more holistically. Marketing and sales share common goals in wanting to generate more business. The relative value of the two organisations is linked.

In most B2B situations, particularly in small, presumably niche companies such as you seem to at, a good salesforce hardly needs any "marketing support" at all. That's IF the sales team is full of really s**t hot rainmakers who:
- do all their own prospecting
- can engage with and gain the confidence of potential customers, even though they've never heard of the vendor
- have the knack of qualifying prospects really well, and
- understand enough about the vendor's capabilities and the customers' problems to show the customer how he can solve his problem.

By the sound of it, that's NOT your situation. On a unit sale of US$25k, if it's taking 6 to 18 months and between 5-10 visits to sell this stuff, no one is very good at getting a compelling value proposition across.

I suggest the conversation you have with the CEO should be all about how you help him get the sale team to be more effective. Don't fight turf wars. The game is all about how your company can make more efficient use of the huge investment it is making in the sales team (and I do mean HUGE - nearly half of a 50 person company!?! I hope they're paying them peanuts.)

The discussion's not about who's more effective - sales or marketing - its about how Marketing can help to make the sales team MUCH more productive.

Take each of the 4 areas above in turn.
- prospecting
- customer engagement ("convertion" for brand-speak junkies!)
- qualifying prospects
- value propositions and customer education

What can you do to make the sales team more effective in each area? Too big a topic to deal with here, so I suggest you have a look at my website:
www.marketingminds.com.au
(yes I'm an Aussie!). I suggest you look at the "managing cost" section under Customer Experience, and also at the Demand Generation section. I'll be putting up sections on Positioning and Value Propositions in the near future, so stay tuned.

2. Well done v poorly executed marketing:
- it's probably all in the eyes of the sales force. If the "leads" your events are generating are good (ie people with money, understanting their problems and your solution, with authority to spend, intending to do so in next 6 months) AND you can get the CEO to see that every one was NOT previously known by the sales rep who has now claimed them (the usual problem of marketing recognition!), then you'll be doing well.
- Do the marketing programs help educate customers, help them do initial reviews of your products, see the good comments of independent analysts, and learn about happy customers ALL BEFORE A SALES REP EVEN TALKS TO THEM? The more customer interest, confidence, and education that can be done before people start making calls, the shorter the sales cycle.

3. Not staffing up marketing (and then doing the right things!) will :
a) result in the sales force staying at their current level of productity
b) impede the opportunity for the business to scale-up.
Marketing should be the highest-leverage activity in the place. You should be helping the company extend it reach to a greater number of customers that is an order of magnitude higher than the sales team can cover the way they are currently doing it. Marketing should give the company extra reach, and avoid it being limited by the number of few good sales people it can find in each geography.

4. As others have said - do what you can (safely) with external contractors. Also try and keep track of, and make visible to the CEO, all the "para-marketing" activities the sales team gets up to. Tell him that it's quite legitimate activity, you just wonder if having every sales team "roll their own", presumably with non-specialists (aka amatures) is best for the business. OK. So that bit was about turf wars!

Hope this helps. As you can see, its a topic I'm interested in.

You can get in touch with me directly via

www.marketingminds.com.au

Best of luck!
 
Posted by: Stokefire* Author Response
11/22/2004 3:10 PM (CST)
All,

I am going to close out this topic, as I've gotten more than enough information to satisfy my initial questions. Thank you all for what was obviously a lot of dedicated thought to the topic.


I'm actually quite satisfied with the varied answers (from one or two marketers, to 1/5 ratio, and others) to my question on staffing levels. It was great to see so many different views. I also found value in the various outsourcing conversations.


RedGreenBlue's comment about measuring was exactly what I was looking for in that regard. Others provided long term studies and such - I suppose I hadn't been clear enough on exactly what I was requesting.

Thanks to all for giving me fuel for the battles and discussions to come. You've helped me to prioritize my list of suggestions and requests for marketing dollars in the coming year.

I'm distributing points to all that were able to provide guidance that will help me in front of the executive committee .

It's a rough day here, so my intended in-depth comments/feedback are going out the door...

Thanks folks!
 


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