Why marketing should be at the heart of your company: Q&A with Rony Israel
Rony Israel is a serial entrepreneur, investor and business consultant with BDC.
In his more than 30-year career, Rony has worked with entrepreneurs across the globe, been a senior executive with two large multinationals and was an early trailblazer in Internet companies. He’s been at the helm of a number of successful ventures, including an online advisory services company for do-it-yourself investors and brokers, as well as a web-based video conference company. Here’s an edited transcript of a conversation we had about the importance of marketing for a business.
Here’s an edited transcript of a conversation we had about the importance of marketing for a business.
The five pillars of every business
Ravi: I’ve heard you say that marketing is the heart of an organization. I wanted you to expand upon that. I’m interested in your take on how marketing should operate within a company and how it should manufacture demand.
Rony: I absolutely believe marketing is the heart of an organization. You can have the best products or services, the best sales team, but without marketing to guide your efforts and draw in customers, you will fail.
There are five pillars in every business:
- Human resources
- Production and R&D
Each of these needs to do its job effectively for you to be successful, but without marketing you can’t generate the quality leads in your target market(s) for your sales people to qualify and close.
Why marketing is the heart of a business
Ravi: How so?
Rony: Now let’s be clear on the role of marketing within a business. Marketing gathers market intelligence about:
- The size of the market
- The types of customers the business wants to serve
- A competitive pricing strategy
- How to position products or services to attract customers
Fundamentally, marketing supports sales and that can be for transactional sales, or most importantly, for consultative sales. It does this by asking the important questions.
- Do we know what our customers need and want?
- Do we understand where their attention is?
- Can we provide them additional information or call them to action with our marketing?
Think of how much money is spent by companies to advertise on platforms where their core customers don’t spend any time. That’s a fundamental lack of understanding of the role of marketing.
Look at what marketing does: gathering market intelligence, positioning products and services, generating leads and nurturing client relationships. That, for me, is the heart of an organization. That’s what it is—in a nutshell.
Marketing works when your product or service is top of mind. That way when the need arises you’re going to be the first company to be called.
When I was working at a major information technology firm, we didn’t have the best products, but we did have the best marketing people. The brand was consistently top of mind and in your face. Marketing would highlight the best outcomes the client could expect from our projects and promote the tools they could use to succeed. There was a saying at the time that, “You’ll never be fired for hiring this IT company.”
We didn’t have the best products, but we had the strongest brand. Because of that we remained very competitive in the market.
The difference between marketing and sales
Ravi: Can you discuss the differences between marketing and sales?
Rony: A common misunderstanding is that marketing and sales are one and the same. But they are not at all.
If you have a marketing skillset that doesn’t mean you can sell. A sales representative, on the other hand, can’t always price and position successfully. One role is creative and the other is analytical. I chuckle when I hear entrepreneurs saying their sales person is also their marketing person. They couldn’t be more different.
Many entrepreneurs minimize the importance of marketing and consider it as dispensable, which shouldn’t be the case.
Marketing can make or break a business
Ravi: Can you give me an example of the importance of marketing for a business?
Rony: Take a look at the restaurant industry. Restaurants have a very short life expectancy. The industry sees a very high number of restaurants opening and closing all the time. Even if the owner is a top-notch chef with the best ingredients and the best recipes, it doesn’t mean he’ll be able to get patrons through the door.
On the other hand, there are very successful restaurant owners who don’t spend any time in the kitchen. Instead, they’re going to conferences and learning how to market themselves, improve their website and have an impact on social media. That’s what helps them identify and attract their customers.
The point of this is that no matter the quality of your product, your marketing can often make or break your company.
The link between marketing and production
Ravi: Should marketing be tied-in to production?
Rony: Marketing and production should work hand in hand all the time.
Production needs to communicate what is being built and why. This way marketing can validate the assumptions about client needs. Is it truly a product that’s needed in the market or is it a “one-off” need?
Working with R&D is paramount. Sales people who encounter difficulties in the market might say: “Our products are obsolete; the market actually needs something different.”
It’s marketing’s role to validate this feedback and either work with sales to achieve success or with R&D to determine which new products/services are required.
The place of marketing in the business
Ravi: You talked about your work at a major IT company. What was the marketing structure within the business and within management?
Rony: When a new product was going to launch, marketing was the key position at the table to help generate the price, the positioning and then to train sales people to get the product to market.
Nothing this company built went to market from R&D without marketing’s input.
How can entrepreneurs succeed at marketing?
Ravi: You’ve now worked at BDC for 13 years and with over 1,300 clients. Can you give us some perspective on how Canadian entrepreneurs are doing with all of this?
Rony: Most Canadian entrepreneurs are looking at their organization in reverse. They don’t focus on marketing early enough. They look to marketing to solve problems when they are not growing.
Many businesses start with a strong product or solution to a problem, but they are then faced with the reality of the market. If you leave a large organization to go out on your own or start a business, you quickly discover that you don’t have the skills or the infrastructure to manage the finances, prepare an accurate forecast or create a marketing plan. You need people, the right people with the right skills, to manage those challenges.
Most businesses are started by visionary entrepreneurs or technicians. The skills of the entrepreneur need to be augmented with the strengths of others to complement their weaknesses.
Entrepreneurs that succeed have figured out where they are deficient. They understand that marketing is a key function and they get a marketing person involved. Whether they hire someone or bring someone in part-time, they get the help they need.
Getting started with marketing
Ravi: If an entrepreneur brings a marketing person into the business, what should that person do over the first 100 days?
Rony: Confirm the market. Confirm the price (Are we leaving money on the table?). Is our target market aware we exist? Can marketing generate quality leads for our sales people? Can they work with social media, online ads, generate leads, monitor and measure that success?
Experiment! In the first 100 days you need to see what is working and what is not working.
Ravi: Thank you so much for sharing your insights as a successful entrepreneur and veteran BDC advisor.
Rony: My pleasure, but remember that I’m not unique and there’s no earth-shattering information here. Only what I’ve experienced, which is that successful companies put on their marketing hats from the beginning.