Is There a Difference Between Marketing & Selling With Clean Energy Start-Ups?

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In larger companies, whether consumer or business-to-business targeted, the difference between sales and marketing is well defined since there is usually a director or VP of Marketing, as well as a counterpart in Sales.

Often there's friendly rivalry between who brings in the revenue and who spends it on advertising, etc. But what about these distinctions with new or very small companies, Renewable Energy (RE) included?

To get a handle on this, four CEO's or heads of RE and bio-tech start-ups were interviewed recently and were asked the following questions:

1. How do you define the "marketing & sales" functions in your organization?
2. What are the differences? The same or different people?
3. How would you rank the importance of the duties in each area?

Each interviewed company is seeking funding and is in some stage of "proving concept and demand" to would-be investors. None are in production, being preoccupied with patenting, product development, bench testing and seeking funds. This "inside out" focus is necessary in the early stages of a company and most CEO's are good at this part. But there's an "outside in" aspect that must take into account both competitors and end users. This is not always understood by start-ups. There are a myriad of marketing and sales tasks necessary to commercialize their product and bring it to market with success.

Here are comments from our four start-ups in answer to the above questions. Some of them are still in "stealth" mode or do not yet have a website, so links are not available in all cases.

Bio medical device for handicapped

With funding and proof of concept already provided by the federal government, Eye-Com's eye and head tracking technology is now ready for the consumer market. Initially developed for the severely handicapped, it has anticipated applications for assistance devices (wheelchairs), computers, automotive, entertainment, medical and military markets. Ken Campbell, CEO of EyeCom Biotech views marketing as quite different from the sales function. In a start-up, the CEO is head of sales and it ultimately is the responsibility of everyone. The marketing function, however, guides and places messaging, derived from learning what the customer understands and wants, then shapes the message to convey why the product is needed and how its different. To describe the market discovery process, he uses the acronym DAWN - Dollars, Authority, Willingness and Need.

Large scale battery for intermittent energy companies

The company adapts century-old lead-acid (LA) battery chemistry for use as storage by solar and wind energy companies, as well as energy management by utilities The main hindrance to wind and solar energy adoption has been their intermittent performance and dependence upon the wind blowing and sun shining. With utility scale storage of large LA batteries, this limitation can now be overcome. The company CEO's initial view of marketing was to create awareness through advertising for the company's product line and that, operationally, there was no real difference between sales and marketing. With prospective customers spread over a wide geographic area, however, he acknowledged the importance of an easily searched website and email marketing. As we talked, he began to see the role of publicity, conducting promotions, developing an email database, h aving a booth at key trade shows and the synergies of partner marketing.

Cellulosic Ethanol biofuel start-up

Federal 2007 energy legislation created a market for cellulosic (non-food) ethanol for blending with gasoline. According to Ken Dixon, CEO of Sunset Ethanol their direct customers are fuel terminals in Reno and the Bay Area, who blend ethanol and gasoline and then re-sell into the commodity market. "Because of market pricing and so few customers, marketing is much simpler than in traditional manufacturing," according to Dixon. So the primary task of marketing is securing sufficient ongoing biofuel supply (switch grass) from farmers to keep the plant running at capacity. A secondary marketing goal is to develop a market for pellets, a by-product of the refinery process. Also important, but further down the list are development of a website, publicity to farmers and secondary (pellet) customers. For his company, he did not see a difference between sales and marketing, both equally important.

Mid-scale, off-grid Wind energy turbine

There is a gap in wind turbine sizing between sub-10KW for small residential usage and the giant 1-3 MW units you see in row farms along ridges, and increasingly offshore. This mid-range segment - 100KW to
1000 KW (1 MW) - can serve small communities, business parks and military installations off the grid. CEO, Mike Hess, of SweptWind has a view of marketing and sales as blended, but viewed "outside in" from the
customer perspective. It is driven by an understanding of the customer problem and how best to communicate the product's solution or "competitive advantage." The sales function, according to Hess, is to leverage the messaging from marketing to close the sale. Realistically, he says sales are everyone's function, both before -- and after the sale. Marketing's responsibilities include both external and internal communications, which derive from the due diligence of competitive auditing, research into customer needs and media analysis. There also is a management role -- a conduit -- in linking the customer to the development side of the house. For inquires contact Mike Hess This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

The customer decision cycle

Another way to differentiate the marketing and sales functions is in terms of the customer decision cycle (below). It starts with first exposure to a product or service that can be called Awareness. If relevance is perceived, the customer moves to a Consideration phase and, if pricing is right, may move to Trial or initial Purchase. With satisfaction comes Repeat Purchase and Loyalty and finally Evangelizing or Recommending:

Awareness > Consideration > Trial/Purchase > Re-Purchase > Evangelizing

Of course, Marketing and Selling can be involved with all phases of this cycle, but, generally, Marketing is most effective in generating Awareness through Trial. Sales is more frequently done when Awareness and some Consideration has been achieved, then focuses on closing the sale, resolving issues and working toward repeat business.

And finally, here's how the American Marketing Association defines Marketing....."Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."

This article also appears at my energy column.

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dave@marketinggreenpower.com
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