If your business does not currently have an effective sales strategy then it’s like setting off on a car journey from London to Glasgow for the very first time without a map, satnav, sufficient fuel or adequate provisions – you will end up somewhere, at some time, in some condition but it is very unlikely that you will arrive at your intended destination or that the journey will be a rewarding, stress free and relaxing experience! If you want to avoid similar uncertainty and pitfalls in your business, you must devise an effective sales strategy – as a matter of urgency!
An effective sales strategy will provide the methodology and logical thought process to help a business achieve its overall business plan. It’s one thing to have an idea or generic goal of how you want your business to succeed but without a well-considered sales strategy in place then you really do take the risk of totally missing your target – in more ways than one!
Many companies, particularly SMEs, work tirelessly day-to-day to identify new business opportunities from whichever source they can. Countless hours are spent talking to existing customers, new prospects, networking contacts or even family and friends in the hope that some-one, somewhere, will eventually place an order that will produce much needed short-term revenue and income. But that is a very dangerous and extremely stressful way to run a business that really cannot be sustained over the longer term. Too many hard-working owners have put several years’ hard graft into building their businesses only to see them fail. Not for the lack of effort or commitment but because they didn’t have an effective sales strategy.
Let’s be clear: an effective sales strategy is not the same as an effective marketing strategy – that’s a different subject that warrants consideration on its own merit.
Know Your Prospect
The overall primary objective of an effective sales strategy is to identify how your company will get your product or service in front of prospects that have a definite Need and the Ability to Purchase.
Start by putting yourself in the shoes of your prospects:
- What product or service do they offer?
- What market(s) are they in?
- What is the typical profile of their preferred client?
- What are their USPs and what makes them different to their competitors?
- Where do they sell: locations, regions, geographies, countries?
- What would help them be more successful?
- How do they select new suppliers?
- What is their purchasing criteria and methodology?
And then conclusively decide:
- How does your product or service meet their Needs?
- What specific benefits will the prospect derive from your product or service?
- What USPS does your business provide that sets you apart from your competitors?
- What other customers can you promote as reference sites, testimonials, case studies?
- How should you initially engage with the prospect?
Decide Upon Your Sales Channels
There are several potential routes to market. Many businesses utilise multiple sales channels including: Telesales, On-line, Direct Mail, Field Sales or via preferred Partners. When deciding the most effective route to market, it is very important to consider critical factors such as the AOV (average order value) compared to the COS (Cost of Sale).
For example, if a product sells at (say) £100 but the cost to the business including raw materials, production and sales commission is (say) £150 then there would be an immediate loss of £50 which would be commercial suicide.
Similarly, if a product was sold through a retailer or preferred partner who received (say) a 25% commission, how would that effect the cost model?
Employ Dedicated Sales Personnel
Another key consideration is the ability of the individual to actually sell. Only too often, particularly in SMEs, staff are drafted into roles that they are not suited for or trained to do. In the absence of a dedicated experienced sales person, staff with responsibility and accountability in other roles multi-task and attempt to do their best but usually they aren’t particularly keen or motivated to perform the sales role. Hence they aren’t very successful and often become majorly frustrated or stressed or actually resign from the business.
The same applies to the management of sales as a team or department. It is very common for (say) a Managing Director or Financial Director to have the responsibility in the absence of a dedicated Sales Manager or Sales Director. Understandably, the additional costs of salary, NI, Health Scheme, other benefits, sales commission and company car for a full-time sales head can prove too prohibitive to SMEs.
Define Your Main Objectives
Within any type of plan it is crucial that all of the main objectives are based on the SMART principle. That is, they must be:
- Time based
It really is counterproductive and demoralising to set unrealistic objectives. An effective sales strategy may include objectives based on:
- Sales Cycle – how long does it take to conclude the sales process and make the sale for product A
versus product B?
- Value – how many sales of service C need to be made to exceed the value of service D?
- Market Potential – what is the growth rate in market E compared to the decline in market F?
- Cash-flow – How quickly do customers pay in industry G versus industry H?
- Opportunity – is there a lull in competitor activity that can be capitalised upon?
A final thought……
“Few Plan to Fail, but many Fail to Plan”
In the coming weeks and months there will be a series of interesting articles covering various Sales & Sales Management topics including (but not limited to):
- Telesales – The Key Skills
- Time Management – Work Smarter not Harder
- Prospecting – How to do it Effectively
- Sales Leadership – Be the Benchmark for your Team
- Client Evolution – Change to Retain Your Customers
- Opportunity Management – Which Deals should you Really be working on
- Value not Price – Increase your Average Order Value
- Sales process – The Key Steps to Success
- Managing Quota – Know Your Numbers and Make them Work
- Recruitment – Hunter or Farmer
Latest posts by Len J Campey (see all)
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