Expert's Panel

A collection of timely and important topics posed to our panel of experts.

What is the typical number or percent of employees in a company that are marketing? How many are desirable or adequate?

 (ep1050)
1. Nobody measures it that way. For norms in the industry pick up annual reports of companies and see how their money in allocated—it is quite variable. Percent of sales revenue spent on sales and marketing varies, but it also is impacted by what they include in that category. It is hard to do by body count. A very senior and effective person might be worth ten new college graduates. So the question as stated is very difficult to answer.
2. If you are in the distribution business in our industry probably 30% of your people will be in that annual report figure. You don't make anything; you warehouse it, you computerize it, and you resell it. Of the companies I have worked for which are equipment and materials companies, the sales and marketing people represented 10 –15 percent of the revenues.
3. Take Applied Materials as an example, it is probably much higher, as a percentage of revenues, than it was in 1999 or hopefully will be next year. Applied has sufficient resources that they can continue to spend more money on new products. I would guess KLA is the same way. Neither is laying off masses of marketing people. So it varies with the business cycle as well.
4. At SPIE last week the big conversation was that ASML's average revenue per employee was $250,000 and when they bought SVG theirs was $63,000. I don't know what it is today, but Novellus had $475,000 of revenues per employee as a result of both good management and heavily outsourcing of manufacturing. It really varied from company to company and situation to situation. So the sales and marketing as a percentage of revenues may not give you a definitive answer.
5. I think the question is more about marketing than sales and marketing. I don't believe you need large marketing departments; you need good marketing departments that are working with engineering and sales. In organizations I have worked in we had 6 people out of 250 population and in another we had 6 people with sales of $240-million. I'll bet the figure for marketing is 5% or less. I don't think large marketing organizations exist for very long. They are more of a coordination and leadership function in an organization as opposed to a large functional group.