What is a Sales Strategy?
A sales strategy is a plan for how to generate sales, including what products or services will be sold, when and where they will be offered, and at what price. It is a strategic business plan for how to succeed in the sales process. It defines the product being sold, how it will be marketed, what customers are targeted, and what sales channels are used.
Successful sales strategies require that the entire company adhere to them. This prevents departments from working at cross purposes with one another. For example, if marketing promotes a particular product but production cannot deliver enough of it, the strategy will fail. Sales strategies can range from aggressive to very conservative approaches depending on your industry and competitive environment. However, at the end of the day a successful strategy must be a balance between how much risk you want to take (and thus what margins you may need to cover) and how much control you want to exert in your sales process. A sales strategy is like fortune cookie reading; it requires that the company step back and examine how it will be eaten in order to figure out what parts will comfort or upset customers.
The type of people who fail when they try things differently often do so when there are no employees in an organization who understand why its decisions are made. This can be even more harmful when there are managers who think decisions come from the top down rather than understanding why things are done in an organization or by individuals. Ultimately, the sales strategy must be understood not only by people outside of sales, but also by those who are inside sales. It is important to understand the long-term potential for this strategy.
Steps to Develop a Sales Strategy
The first step in developing a sales strategy is determining your product value proposition (PVP). This involves putting into words how you can contribute to customers’ success. For example, if your business is manufacturing cars, you will explain how you can help customers meet their transportation needs. For an insurance agent working on real estate transactions, you would explain how you can help customers achieve their financial goals. As an example, if you are a travel agent and your product offers the ability to experience different cultures, you will attempt to put this in your PVP. If it does not, for example if your product emphasizes the cost of vacations over the value of what is offered, then perhaps this idea is not right for you and you should focus on something that at least contributes some value rather than none.
Once you have determined what your product does well and who will benefit from it, decide how to position it in the marketplace. For example, we previously mentioned that a real estate agent deals mostly with people buying homes. Instead of thinking about how they can assist buyers, maybe they should think about how they can assist sellers. Most people do not want to sell their homes. It is a hassle and a headache. With a new strategy, agents can attempt to put themselves in the sellers shoes and think about what is going through their minds when it comes to selling their homes. Rather than focusing on the buyers, which is more difficult as there are many things that could happen that would make them change their minds, the real estate agent may discover that by putting themselves as a seller first, it may be easier to carry out this strategy because you know what you would want from your agent. The ability for this agent to sell is not based on what they do, but rather by how they think about the people who will use their product. Instead of thinking about how someone can buy a home, this agent needs to focus on thinking of whether they want to buy a home and what happens if things do not go as planned.
This is called marketing reversal, which occurs when you switch the audience first before marketing. If this sales strategy really appeals to you, it may be worth spending some time to see if you can see some potential benefits that could help your business achieve success. If you are able to identify with your customer or audience first, the next step is figuring out how best to market yourself.
Sales strategies often begin by assessing the competition. This is usually done with a focus on industry data, which can be found in industry journals, trade publications, or online. The objective is to understand how your competition is marketing. One of the first questions is what makes your company different from your competition. Most companies chose to highlight features that they believe uniquely set them apart. If you only look at features that your company chooses not to publish about, then it may be difficult for you to really understand how special you are as an organization or what opportunities exist for growth. With this type of information you are able to restructure your thinking and come up with new ideas, which can result in new products and services for your business. Another thing that you should consider when assessing the competition is their pricing. You may be in a price game that is fixed or variable, meaning it is fixed in the beginning but may go up over time. If you are competing against another company, there are ways to make yourself slightly better in order to prevent your competitors from beating you at your own game. You will need to understand how much money your competitors charge for their product or service, for example, if they have charges that are low then maybe it is worth it for them to lose some money on the sale. This type of strategy can work well if you have a product that allows customers to get something for less than what they would pay without your product.
The most important component of a good marketing strategy is the ability to understand and satisfy customer needs better than one’s competitors can” (Aaker, 1997). This quote about marketing strategies highlights the most important aspect of a company’s business strategy is its ability to understand and satisfy customer needs. In many cases when working with an organization on their communication strategy, key executives from both marketing and communication will be in attendance. This is an opportunity to further discuss and flesh out how the company should approach its company’s position. If the organization’s communication strategy is fully integrated with the marketing strategy (which it should be) then this is a critical step during the planning process. The strategy being set out here will serve as a guide for all subsequent decisions about content, tone, frequency of communication, and channels through which information will reach key audiences.
As above, there are many ways to structure a company’s sales strategy.
Types of sales strategies
A direct-sales approach involves contacting buyers directly to make a sale.
In an informational sales approach, sellers offer information about their products in order to generate interest from prospective purchasers.
- Using a direct-sales approach -Using an informational sales approach -Using a customer-driven sales approach
A direct-sales approach involves contacting potential customers directly in order to make a sale. Using this strategy, the company should know the market segment the company wants to reach. This should be done by conducting research and surveys. The company may want to target a particular market segment (e.g., youth, baby boomers) or it may also want to target an entire geographic area (e.g., the US, Latin America). Researching potential customers is not just about building interest in one’s products or services; it is also about developing relationships with the intended audience. The more closely that information related to a product or service is tied back to real people, the more confident the buyer will feel about purchasing what they are offering.
After the company has determined the market segment it would like to target, they should then determine strategies for getting that information into the hands of the desired audience. There are many ways to do this. The most obvious way is to use print communication media. This includes newspapers, magazines, catalogues or brochures. E-communication mediums are also common, but are more costly because of start-up costs and maintenance fees associated with maintaining an Internet presence. A less expensive alternative is to advertise regularly on local radio stations or television channels. By doing so, the company is attempting to reach a larger audience. In addition, television advertising can help to convey a personal sentiment as it is an interpersonal medium.
In order to develop a good sales strategy, it is also important for the company to have a sales force. This sales force should have adequate training and education in order to effectively engage the desired audience both on the telephone and in person. What this means is that employees should be trained on how to engage prospective customers with appropriate information related to products or services being offered by the company. The salesperson should also know how buyers will likely respond when approached regarding their interest in using what they are selling. Once the company has a good understanding of how its products or services could benefit its target audience, it should then determine what channels it will use to stock these products and services.
- An informational sales approach involves applying information to product or service offerings in order to generate interest from potential purchasers. In order for a company to be successful using an informational approach, the information being provided should have relevance to the prospective buyer’s situation. The more relevant information a company can provide, the more likely a buyer is going to engage with them and either buy something directly from them or at least recommend them to other people that might have an interest in their products or services. The information provided should also be in a way that will most likely encourage the buying process. Having content that is interesting to read, interesting to watch, or relatable to the buyer’s daily life is important for this strategy. Using print media is an obvious alternative; but it is also possible to use graphical mediums like videos, slideshows or CD-ROMs in order for buyers to better understand the benefits of purchasing from the company. In order for the company to be successful using an informational sales approach, it has to make sure that its customers can find out about its products and services. This usually means providing access to websites. A website works well because it is the most interactive of all digital media. Potential customers are able to browse around, read information, view content, download information or contact someone at the company before making a purchase. An informational sales approach is most successful when working with consumers that are already familiar with the company’s products or services. There are many ways this can happen. One way is for the company to provide references or referrals from other people who have recently purchased its products or services. Another way for this to happen is through word of mouth advertising where people recommend the product based on their own positive experiences using it.
- Customer-driven sales approach where sellers contact prospective customers after they have been identified by the buyer. In order to generate interest in a product, companies often employ a combination of all three types of sales strategies.
Whether you are starting from scratch or trying to make changes in existing strategies, a combination of market analysis and strategic planning processes will help you come up with ideas that will help your business succeed by delivering an appropriate sales strategy. Fintalent, the hiring and collaboration platform for tier one M&A and Strategy professionals has a pool of expert sales strategy consultants available for hire that will meet all business Maarket analysis and Strategic Planning needs.