Sales Strategy – Introduction Case Study Subject: Sales Strategy Date: Summer 2007 Authors: J. Frank Brown / Herminia Ibarra INSEAD: The Business School for the World As one of the world’s leading and largest graduate business schools, INSEAD brings together people, cultures and ideas from around the world to change lives and transform organisations. The unique global perspective and multicultural diversity of INSEAD are reflected in all aspects of its research and teaching.

Sales Strategy – Product Employee Management System sold on an annual license fee

Employee Management System

sold on an annual license fee

Sales Strategy – Strategy 1 - 4 Value Proposition Cut Costs through increasing productivity and controlling absenteeism Reduce Workload by streamlining staff management and regulatory compliance Attract & Retain Staff using flexitime and benefit management Valued Customers Networked Computer Environment software product no hardware = less maintenance & third party reliance Less than 75 Employees not targeted by competitors + faster set-up & deal closure Management Structure not company of equals, needs management structure even one person

Value Proposition

Cut Costs

through increasing productivity and controlling absenteeism

Reduce Workload

by streamlining staff management and regulatory compliance

Attract & Retain Staff

using flexitime and benefit management

Valued Customers

Networked Computer Environment

software product no hardware = less maintenance & third party reliance

Less than 75 Employees

not targeted by competitors + faster set-up & deal closure

Management Structure

not company of equals, needs management structure even one person

Sales Strategy – Strategy 2 - 4 Buying Behaviour Initiators person in charge of managing the staff ( owner manager, hr manager, office manager ) Buyers initiator or the owner manager, usually a single person no tenders or committees Users used by all staff members, managers gain the most Influencers cost controller, managers, hr managers Lodge keeper Initiator or the owner manager Deciders initiator, secondary cost controller

Buying Behaviour

Initiators

person in charge of managing the staff ( owner manager, hr manager, office manager )

Buyers

initiator or the owner manager, usually a single person no tenders or committees

Users

used by all staff members, managers gain the most

Influencers

cost controller, managers, hr managers

Lodge keeper

Initiator or the owner manager

Deciders

initiator, secondary cost controller

Sales Strategy – Strategy 3 - 4 Sales Objectives Focus on Recruitment Business model is about growing a large customer base Product is sold on an annual fee, so a large sales effort in focused on gaining new customers, to build up the annual revenue stream. Recruitment of new customers would be at a loss due to the amount of effort required but it would be recouped by the customer renewing the product each year. Due to the product becoming part of a companies operations, renewals will be a less taxing effort on the part of the sales team.

Sales Objectives

Focus on Recruitment

Business model is about growing a large customer base

Product is sold on an annual fee, so a large sales effort in focused on gaining new customers, to build up the annual revenue stream.

Recruitment of new customers would be at a loss due to the amount of effort required but it would be recouped by the customer renewing the product each year.

Due to the product becoming part of a companies operations, renewals will be a less taxing effort on the part of the sales team.

Sales Strategy – Strategy 4 - 4 Delivering Profitability Operational Excellence Company will have the best general product. Company's price will be the best in the market. The modular pricing structure will make the product available to companies of all sizes. Product will be easiest to use and have a speedy set-up time Company sells 'their' product to customers, there will be no bespoke development Updates to the product will be carried out as required to keep the product functional and competitive.

Delivering Profitability

Operational Excellence

Company will have the best general product.

Company's price will be the best in the market.

The modular pricing structure will make the product available to companies of all sizes.

Product will be easiest to use and have a speedy set-up time

Company sells 'their' product to customers, there will be no bespoke development

Updates to the product will be carried out as required to keep the product functional and competitive.

Sales Strategy – Culture/Chemistry Tough Manager Focused on costs views employees as a tool to generate profit Sell the improvements in productivity Sell the controlling of absenteeism Analytical Manager Focused on logic and structure Sell the overall benefits of the product to the company and staff Show details of how the company will benefit from using the system Friendly Manager Focused on the welfare and needs of the staff Sell the ability to better manage the staff and provide them with a more supportive environment Sell the flexitime advantages to staff and company

Tough Manager

Focused on costs views employees as a tool to generate profit

Sell the improvements in productivity

Sell the controlling of absenteeism

Analytical Manager

Focused on logic and structure

Sell the overall benefits of the product to the company and staff

Show details of how the company will benefit from using the system

Friendly Manager

Focused on the welfare and needs of the staff

Sell the ability to better manage the staff and provide them with a more supportive environment

Sell the flexitime advantages to staff and company

Sales Strategy – Operations Sales Funnel Selling Approach Consultative & Strategic Relationship Lead Sale Infrastructure Technical Support Product Build Process Total Market: use sector websites and list services Qualify & Identify: ensure they are valued customer and identify initiator Capture Interest: using direct marketing Contact: phone call using a consultative approach Meeting: build relationship by understand their needs D emo of Product Sale Renewal

Sales Funnel

Selling Approach

Consultative & Strategic

Relationship Lead

Infrastructure

Technical Support

Product Build Process

Sales Strategy – Performance Measuring Sales Process Outputs Company Key Performance Indicators Total Market 40 Qualify & Identify 20 Capture Interest 20 Contact 10 Meeting 4 Demo 2 Sale 1 Identify the areas where the biggest loss of potential customers occur and look at ways of refining the process in that area to improve overall sales performance. Measuring Sales Process Inputs The KPI's will change over time as the companies KSF change Larger Customer Base = greater product awareness and an increase in sales Controlling Costs = ability to reduce price of product and an increase in sales No bespoke development = a reduction in the number of sales Constant Contact with Customer = better feedback and an increase in sales

Measuring Sales Process Outputs

Company Key Performance Indicators

Total Market 40

Qualify & Identify 20

Capture Interest 20

Contact 10

Meeting 4

Demo 2

Sale 1

Identify the areas where the biggest loss of potential customers occur and look at ways of refining the process in that area to improve overall sales performance.

Measuring Sales Process Inputs

The KPI's will change over time as the companies KSF change

Larger Customer Base = greater product awareness and an increase in sales

Controlling Costs = ability to reduce price of product and an increase in sales

No bespoke development = a reduction in the number of sales

Constant Contact with Customer = better feedback and an increase in sales

Sales Strategy – Enterprising Value Curve

Value Curve

Sales Strategy – Key Success Factors Bases of Competition (BOC'S) Competitive Price Overheads Control & Efficiency Product Quality Customer Needs & Usability After Sales Service Keep in contact with customer Tailored to Customers Needs Bespoke Development Reassurance Company Reputation & Customer Base Sold on Modular Basis Technical Control over Product Annual Payment Cash Reserves & Financial Strategy

Bases of Competition (BOC'S)

Competitive Price

Overheads Control & Efficiency

Product Quality

Customer Needs & Usability

After Sales Service

Keep in contact with customer

Tailored to Customers Needs

Bespoke Development

Reassurance

Company Reputation & Customer Base

Sold on Modular Basis

Technical Control over Product

Annual Payment

Cash Reserves & Financial Strategy

Sales Strategy – Key Success Factors KSF Analysis

KSF Analysis