Let us accept the fact that you are in business to make profits & earn money. I understand you want to help others by solving their challenges & problems, but you can not do it for long unless you run a profitable business.
When you develop a winning product or service, the ultimate measure of its success is sales. Many business owners hyperfocus on product development and forging their marketing plan, leaving little room for developing and refining a sales strategy plan. That is a costly mistake.
To make a profit, you need to sell your products and services. And this is where the real challenge begins. Most entrepreneurs and founders are great at ideation, product development, market testing, and get initial customers through their network. It helps you get the initial traction, but is it enough to sustain and grow? Not at all. Your network can not last forever unless you continue to build on it.
The better way is to have a Sales Strategy.
Some of the deadly mistakes most of the startups and SMBs make are – no having a sales strategy, hiring the sales team too early, hiring without a plan, not having a sales process, output focused approach, lack of coordination between sales & marketing activities, ether struggling to generate enough leads or not able to manage them professionally. All these mistakes lead to a sure-shot disaster for the Startups and SMBs.
Let us first establish the difference between a marketing strategy and a sales strategy.
- A marketing strategy focuses on increasing the product/service visibility.
- A sales strategy concentrates on actually selling the product/service.
A sales strategy is about generating real, quantifiable profits. No matter how good your product or marketing plan is, it will be nothing if your sales process does not produce results.
To get to the level where you can consistently generate the desired results, you need a well-defined sales strategy in sync with your marketing strategy.
People buy you before they buy your products or services. For people to do so, they need to develop confidence and trust in you.
You can not exhibit confidence without having a process-driven approach to your business, especially customer touch points – sales & marketing.
I know how discouraging it is when people say NO to you for a meeting or a sale, but a popular thought in the sales community is that you need to go through many NOs before you get a yes. And these many NOs can dent your confidence badly unless you have a sales strategy & a sales process in place.
Let us accept that your business and your services are not for everyone, they will not appeal to everyone, or they might appeal to someone who does not have the money to spend right now. That does not mean your business idea is awful; it simply means you have not found the right people yet. And if it is happening most of the time, it indicates that you are hitting in the dark. You do not know your target market, do not have a structured approach, and maybe luck is your strategy.
What are the components of a sales strategy?
Target Markets and Customer Segmentation – First thing first – identify those customers who are of the most value to the business. These customers predictably buy more and at better prices (higher margins for your business). Knowing this will help drive selling costs down and enable your company to focus its product and service development efforts.
Decision influencers & Buying Personas – Identify those individuals by function within an organization likely to influence a purchase decision for the products or services. These four key buying-influential roles: (1) economy, (2) technical, (3) user, and (4) coach. Covering your bases by interacting with these four buying influences will increase the probability of making a sale and higher margins.
Customer contact Strategy – Should it be direct, indirect, or digital? The customer contact strategy helps connect with the potential customers at the right place, time & buying cycle. An organization must determine the sales channels that can reach the target markets and customers most effectively. Some of the factors to consider:
- Direct v/s Indirect v/s Digital sales or combination of any two or all three
- Hunter v/s Farmer sales team
- Inbound v/s Outbound sales team
- Complex solution v/s Transactional sales environment
- Salary-driven v/s Incentive-driven compensation plans
- Customized v/s Productised solutions (products/services)
Sales/Customer-Buying Process – A sales process is a systematic approach (a repeatable process) involving a series of steps that enables a sales team to close a lead. Some of the important reasons are: Process increases lead conversion rates, shortens the sales cycle, increases the average ticket size, improves profit margins, increases the productivity of the sales force, and drives selling costs down.
Sales Message and Your Customer Value Proposition – Your sales message is the unique message that delivers your customer value proposition to target customers. This message is what sets your company apart from your competition. The message should be simple, easy to understand for the target customer, memorable, and unique. Communicating your Customer Value Proposition effectively generates qualified leads, shortens the sales cycle (discussion and negotiations), increases lead conversion at a faster pace. All this directly improves the productivity of your sales team.
Revenue Growth Strategies – For high profitability, a business needs to diversify its sales growth avenues. Some of these avenues are:
- Increase the number of qualified sales leads;
- Improve the lead-to-close conversion rate;
- Increase the number of high-value, long term customer engagements;
- Increase the average deal ticket size per transaction; and,
- Improve gross profit margins.
By increasing performance by just 10 percent in each of these five areas, a business will substantially increase the sales revenues and gross profit. It pays to do the math.
Performance Metrics – Performance metrics are the quantitative and qualitative parameters a business uses to measure the success or failure of its sales operations. These metrics should include both results- and activity-based measurements. What gets measured gets done. The 80/20 rule applies here too. Performance metrics help identify 20% effort generating 80% results and 80% effort generating 20% results. It fine-tunes your sales strategy to reduce selling costs, stop/reduce leakages significantly and improves sales revenue.
Sales Compensation and Rewards & Recognition – Sales compensation plays a crucial role in driving your sales team’s productivity and sales growth. Helps in retaining the high-performing sales team members. Possibilities to earn extra drives most sales professionals to go that extra mile. Therefore, it is beneficial to have some incentive payout factored into the compensation structure of a sales team. Rewards and recognition go beyond the financial earning. They work like a booster does for your sales team to keep pushing in difficult market situations.
To do this effectively, you would need the help of an accomplished sales coach due to the number of variables involved. When done correctly, it can reap massive long-term benefits. But if done incorrectly, there will be irrevocable consequences.
We help Entrepreneurs achieve big sales growth with our “Sales Strategy Consulting” – at a faster pace.