Yes, you do need a sales strategy
Here’s why: No strategy = no business. It’s that simple. With a sales strategy in place, research is better targeted, cold calls are more productive, sales resources are more cost-effective, and sales performance is more predictable.
The nuts and bolts
For a sales strategy to be effective it must have these key features:
- The strategy must be specific and detailed
- The strategy must be measurable
- The strategy must be attainable
- The strategy must be realistic
- The strategy must be time sensitive.
Without a sales strategy, a business will chase its tail – pointlessly pursuing something and moving no closer to its destination. Without getting too complicated, a sales strategy simply describes a business’s approach to selling a product or service. Strategy is the most effective way to drive more sales.
Everyone believes that strategy is important, so it’s surprising to see how many businesses have no sales strategy at all. Regardless of the size of your business, the effectiveness of your sales strategy is what will determine success or failure. Without this fundamental element in place, it will take that much longer to get a business off the ground, or to grow a business that has set its sights higher.
As a framework for fine-tuning the marketing mix, the four Ps of sales strategy – product, place, price, and promotion – continue to serve sales leaders well.
This is your tangible product or service. You need to think about the needs and wants of consumers, market conditions, how to keep production costs down, and quality high. When it comes to the product, can you improve on what your competitors are offering? Or can you add value in some way for the consumer?
This is the location where the product or service is to be sold. It may be brick and mortar or online. You need to look at areas where buyers would seek your product, ways to access the right distribution channels, and differentiate yourself from your competitors.
Pricing your product involves research, planning and careful consideration. You need to cover all expenses and have a reasonable profit margin. You will also need to look at elements such as pricing strategy, suggested retail price, volume discounts, wholesale pricing, seasonal pricing and price flexibility.
Determine whether you can price your product or service better, and how you want to position it – is it aimed at the high or low end of the market? The narrower your target market, the less you will sell and the higher the value needs to be.
To reach your target audience, you will need to get information out there about your product or service. This involves a promotional strategy, advertising, public relations, publicity and media, among other elements.
Related: How to Build the Ultimate Sales Team
Identify the total available market
A common (and very important) item missing from many entrepreneurial businesses is a breakdown of the company’s total available market, which is simply everyone you wish to reach with your product.
Here’s an example: You live in Mpumalanga and you’ve decided to start a business that manufactures and sells fly fishing flies. Let’s say your town has 150 000 people. Through market research, you may find that the total possible demand for your business in your town is 15% (or 22 500 people), with spikes in demand occurring during the April and December holiday periods.
Bear in mind that if you have a competitor in your market, your total available market would be smaller since you will be sharing this market with another company.
This process is really about finding out where the opportunities lie, who your competitors are and whether or not they are doing a good job. Much of this type of research can be done electronically, thanks to the Internet.
I always advise entrepreneurs to take the time to go through this process systematically. In addition to more analytical research, talk to friends and family. Talk to people in your social network who you know and trust.
Most market sectors today are comprised of a diverse range of niche players who have varied needs and business drivers. Companies that target any market as one broad vertical run the risk of developing positioning that misses its mark, making the sales and marketing process more difficult and more expensive than it needs to be. To maximise your marketing and sales effectiveness and minimise selling costs, it is necessary to understand the market from a more detailed perspective.
Once you have identified your total available market, you should begin to segment your customers. This separates prospects and customers into sets of people or companies that are similar and related from a marketing or demographic perspective. For example, a business that practices customer segmentation might group its current or potential customers according to their buying habits, age group, special interests.
Use data sources that are freely available about companies’ lines of business, areas of operation, number of employees, IT infrastructure, fleet sizes and so on to give you an idea of what the potential could be. The ability to calculate or estimate the potential spend or purchases of prospects or customers in the target market you have chosen means drilling down to a granular level to calculate the average spend of each customer in each area or sales territory.
Prioritise the geographical areas with the greatest sales potential and the least cost to cover.
Sales force structure
Once you have prioritised the areas depending on size and potential within each, you can structure the sales team. How are you going to cover all prospects, from telesales through to taking care of existing business, and breaking into the lucrative new market potential within the area? Territory reps, product reps, major account reps – all must be aligned with the identified potential and deployed at micro market level according to expected future opportunities.
The one factor that will determine success is how well the sales people are trained with regard to handling the opportunities and the relative size of the organisation. Critically, they must also know their competitive position – are they breaking in, sharing or dominating?
Remember that circumstances change constantly. For this process to work, you cannot do it once and then forget about it. Continuous updating of data, either through research or a CRM system is essential. Your sales people play a huge role in keeping data up to date. Make sure that all new information is fed into your system all the time. Then, analyse, reassess and recalculate on an ongoing basis. There are many companies that gather, analyse and sell data to businesses of all sizes – it’s worth making use of their services.
Sales and marketing
Once you have identified your market, segmented your customers and structured your sales team, your go-to-market strategy becomes a lot simpler to implement than you might think: You have your product, your people, and your areas. Now you have to focus on how you will sell – that is marketing. People tend to grossly overestimate what is required here. If you have done all the previous steps properly, how you actually fulfil the transaction is easy – whether it’s through a direct sales force, tele-channels, distributors, retailers or online, the groundwork is done.
There are many consultants out there who will create marketing campaigns for your business, usually at great cost. Once again, remember that much of the information you need is available online. If you know what your business is trying to achieve, time and effort is all you will require to create the right marketing campaign for your business.
Marketing and promoting your business is after all where you can get really creative. Have think tanks with your team on how to promote your products better and as cleverly as possible within the budget you have.
Advertising, for example, can eat a great deal of capital. There are other imaginative ways to reach your target market. The point is that if you know who they are, you will know exactly how to find them.
One word of caution: Strategic sales and marketing is often where companies fall short, and where they can be extremely inefficient with budgets. This is because there is no concrete, definitive blueprint. So much depends on gut feel, experience and market knowledge. That is why it is so critically important to do your homework.
Whichever route you choose to take, remember that the online world has given people the ability to compare products and service and to decide what they want to buy, often before they even meet a sales person for the first time. Online has given everyone the ability to compare, which is why it’s critical to have a web presence that is professional, attractive, informative and easy to navigate.
Related: Don’t Let Those First Sales Go Bad