Is Sales a Cost?

I’m at the Defrag conference today and tomorrow. Today, Bill Arconati from Atlassian put up this quote:

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs”

– Peter Drucker

Where is sales in this quote? Do you think Drucker was including it in marketing or do you think he categorizes it as a cost?

I say it’s part of marketing. It gets customers. I think if you were to ask many of the start ups at Defrag today who are targeting the enterprise they would agree.

I’m watching many of these new Enterprise 2.0 start-ups struggle with sales. They are grappling with the sales process, client profiling, getting access and overcoming objections. Most of these new companies have been started by engineers and sales is not what they know.

One of today’s “Open Space” breakout sessions led by CEO T.A. McAnn asked the question; “How do you create sales momentum in the enterprise?” and it spawned some good conversation. The key take-aways and I fully agree were, you have to be agile and flexible. You can’t disqualify your prospects too arbitrarily or too early. Let them say no. You need to find advocates internally to help you sell. You’re going to need someone on the inside to evangelize the reward or benefit of your product. You have to create demand.

Enterprise 2.0 companies are ahead of the innovation curve. There is little to no awareness in most enterprises, therefore the sell is almost ENTIRELY demand creation. You can’t rely on or expect the customer to realize they want it. To sell in a demand creation environment, or to create demand, you must be very good at overcoming objections. You need to be good at creating access to the people that can influence the decision and you must be aggressive. Demand creation is not for the weak at heart and it doesn’t follow paint by numbers. And . . . you have to have a killer product.

Peter Drucker was right, Marketing and Innovation get you new customers. I say sales is part of marketing in his quote because it get’s customers too. Enterprise 2.0 companies have both, sales and innovation and if they are good at both they’ll get customers.