Sales and Marketing Expense

Sales and Marketing Expense

I currently have eleven companies in my portfolio. Every one of them is a B2B company. They sell software (or in the case of Inari, a medical device) to other organizations. That’s what a B2B customer does. They don’t sell to the general public.

Every one of them has Sales and Marketing as one of their largest expenses. What does this huge expense consist of? For the most part Sales and Marketing is an attempt to get new customers for their company. To find new companies who will buy/lease the suite of software products that their own company has created. In other words they are working to get new customers, to get GROWTH, which is what we are all looking for.

Well how do they do that? What in the world do people working in S&M for our companies do to try to get new customer companies to buy their products? To get their own companies to grow?

Well guess what, folks, they have to contact people at those companies that don’t know them yet, people whose job puts them in a position to buy or influence the purchase of our companys’ software products, and then try to set up appointments (in person or virtual) to try to sell the software that our companies are selling/leasing. That’s what they do all day long. That’s where most of that S&M expense goes. That’s “cold calls.” That’s how our companies grow. That’s how the business world works!!!

When I recently presented a company whose business is to help S&M people at B2B companies to better target the people at target companies so they’d be calling the correct person, and to automate the process of finding them, to make the life of S&M people easier, and thus reduce S&M expense for our B2B software companies, there was an outpouring of moralistic horror: “But that’s cold calling! It’s an invasion of privacy. Where do they get those phone numbers? I hate when people call me like that!”

That seemed to me to show a profound lack of knowledge, no, not lack of knowledge, but lack of reflection, about what Sales and Marketing is, what all that huge S&M expense is for, what sales and marketing people do all day long. That’s what sales and marketing is for our companies: contacting people who don’t know you yet, to tell them that you have a product that can improve their company’s business.

Automating the targeting of who is the person to call has nothing to do with the annoying calls you get at home at dinner! This is B2B targeting of who is the correct person to contact at a potential customer company, and how to contact that person. It’s automating a process that sales people in the S&M departments of our companies do all day long! - at great cost in time and effort.

Please don’t respond on board to this post. Just reread it and think about it.