Sales Strategy
A strategy is used to achieve an objective. Before you dive headlong into the selling process, you need to have a strategy. A Sales Strategy could be part of an overall business plan. This is where you can translate your yearly goals into projects, campaigns and even daily habits. Why should you have a sales strategy plan? Although you can be successful in sales without a strategy or business plan, it is easier to succeed when you have one. Sales Strategy Diagram
1. Reasons to develop a sales strategy
Plan of Action
The first reason is so you can develop a plan of action. A plan of action will give you a road map, from where you are now, to where you want to be. This is not the same as your goals or objectives. Your goals and objectives should be fixed, whereas your plan of action should be fluid. Just like a Satnav system, your destination is fixed, but your route may change depending on the traffic etc. In just the same way, your business goals will be fixed and yet your plan of action may change. It is still import to have your plan though.
Meet objectives.
As I said before it is important to have business objectives and a sales strategy is a way you can meet those objectives.
A sales strategy provides motivation.
Its Friday afternoon 4pm and you feel that you have worked hard this week. The little tempting voices ask you “why not slope off early and enjoy the weekend?” But what about the weekly outbound sales call target? You are still ten phone calls short. If you don’t hit these, you will be behind on your monthly target. Do this a few months running and that’s a recipe for disaster. So, your weekly target, which is part of your overall sales strategy, motivates you to make those calls. It makes you do the key things you need to do but don’t feel like doing.
2. Who needs to create a sales strategy plan?
Sales Manager
It may be the Sales Manager of the Small to Medium Enterprise, who may or may not have a small team of Sales Representatives reporting into them. A unifying sales strategy will help the team to focus. It can create some healthy competition.
Entrepreneur
The Entrepreneur, Sole Trader or Small Business Owner should also develop a sales strategy. As part of the overall Business Plan, a sales strategy is a key feature of the business plan. It will help when forecasting sales and therefore the key financials of the business. This could be critical if applying for finance.
3. Objectives
Objectives and targets need to be set.
To develop your sales strategy, first start with your business objectives and break these down to individual sales targets. If you are a solo entrepreneur, setting your sales objectives is straight forward, as these are a function of your company objectives. If you have a sales team, you would have to break down these company objectives even further. For example, the Sales Manager would have her sales objectives, which would be split further into the field Sales teams’ individual objectives. Objectives of course don’t need to be financial. They could be to do with policies, such as answer customer queries within a certain time.
Forecasting
In larger businesses, there may be top-down and bottom-up forecasting. For instance, the sales force will forecast future sales, based on their knowledge of the market. This would then be reconciled against the forecasts from higher management. There is usually an end of year tug of war until an agreed forecast is made for the following year.
Personal Targets
Once the forecast is done, you can then set personal targets for the sales team individuals or yourself if you are a solo entrepreneur. These targets could be stretch targets, with compensation and commissions based on achievement. Targets could be end of year sales, monthly sales. Here is an example of a clear personal objective: To achieve an overall Net Sales target of £726,464, which is to include New Business growth of £20,000 (i.e. accounts or new product sales into existing customers) by the end of Q4. This to be monitored quarterly against figures published in the Monthly Report. A gap action plan should be produced if sales fall >5% below plan. Another example of an objective is Administration: Ensure all Territory and Customer Admin (e.g. Visit Reports, Special Pricing Forms, Price Increases, Expenses, Mileage, Stock Requisition and Monthly Reports) is completed On Target In Full (OTIF) to standards set by Regional Sales Manager and communicated to all relevant internal and external contacts on-going. Here is an example of a Financial Freedom mp3 (1 download) If you would like a free blank version of this template, just fill out the form below.
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4. Market Intelligence
Information gathering and forecasting. Proper and accurate information is required before you put your sales plan together. Market Intelligence should also be an ongoing process. The information could come from the ‘field’ ie the Sales Team and so a good Sales Manager would put together a system of reporting, so he or she can detect changes in the market. The sales strategy can then be adjusted accordingly.
Environmental factors.
This is anything external to the business and can include corporate changes, such as Head Office directives. Another example of an environment factor could be competitor information. For example, have they produced new a product line? SWOT analysis can be very useful in this exercise. There may be new Legislation coming out which should be taken in account in your sales strategy. Next what about factors in the economy in general? Will there be a squeeze on Capital expenditure this year?
Data/Information sources.
Information should come from your own people in your business, such as other departments, higher management or the salesforce. With experience, a sales person will get a feel for the market, what will sell well and what won’t. This too needs to be taken into account. Information can also come from your customers. What are their challenges or requirements? More in-depth information can be derived from market research studies.
Analysis
The final task in the gathering of information is to analyse the data. The objective to this is to decide on which sub markets and products to target based on their attractiveness, but also to take advantage of opportunities or eliminate threats.
Once you have completed your first Sales Strategy you should proceed directly to the Prospecting stage. You will find that ‘out in the field’ your initial basic assumptions will be proved correct or false. Either way, strategy then becomes cyclical and is not something you do just once.