Se4 your sales strategy


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Se4 your sales strategy

  1. 1. Directors’ Briefing SellingYour salesstrategyEffective marketing is crucial to the success such as market changes and theof any business. But simply understanding activities of competitors. Take intoyour market is not enough. You need to account changing customer tastes andbuild on your business and marketing plans developments in technologyto turn theory into profits. A good sales or legislation. Identify the key drivers ofstrategy will help you identify and take your business — the people, knowledgeadvantage of the best opportunities. and conditions that influence how well your business functions.This briefing covers: 1.3 Concentrate on generating profitable• Clarifying your sales objectives. business.• Deciding how to reach target customers.• Planning and supporting your sales effort. • Rank customers in order of profitability,• Monitoring and improving effectiveness. identifying existing, potential and key customers. Take into account the total cost of selling to each one.1 The right approach • Identify criteria that will enable you to understand what a profitable customer1.1 Base your sales strategy on your business looks like. Use this profile to identify specific and marketing plans. customers to market to.• Set out in detail how you will deliver marketing objectives, target market segments and support major marketing activities, such as promotional drives.• Identify the key aims of your strategy. For example, which target markets you are aiming for and the timescales involved.• Get realistic, accurate plans by involving sales people.1.2 Understand your market.• Find out more about your customers. For example, their needs, what products they want and what level of service they expect.• Establish when, where and how your existing customers buy.• If you sell to other businesses, identify who influences buying decisions, who actually makes them and who places the orders.• Monitor the key trends in your market,England Reviewed 01/04/11
  2. 2. Directors’ Briefing 2• Identify what you are good at by analysing • Work out a sensible balance between time the activities that led to your most profitable spent developing new business and that sales last year. spent keeping existing customers happy.• Define the benefits to your business • Be aware of, and manage, seasonal sales. of serving each type of customer. For Many businesses find that only ten months example, a high-profile customer may out of 12 bring income. provide you with credibility. Or your first one or two customers in a new sector may enable you to access other customers in 3 Reaching the customer that sector. Give all criteria for a profitable customer a weighting and focus sales Once you have worked out which customers activities on customers that meet those to target, you need to decide which sales criteria. channels will be most effective.• Only sell to unprofitable customers for a good reason. For example, sales to a large You can either sell direct or through an customer may provide a regular revenue intermediary. Weigh the costs of each stream. channel against the benefits it would bring.• Try to improve your gross margin on your less profitable sales. For example, you 3.1 Most businesses sell to customers direct. “ might use a cheaper sales channel (see 3). Direct sales methods include selling face-to- face, direct mail, telesales and e-commerce. Overtrading is a common cause of2 Your target customers • Selling face-to-face is the most expensive business failure. sales method, and works well for high-value Production andBusiness growth depends on creating sales. Complex products (eg customised purchasing costsnew, profitable business with different types accounting software) need to be explained soar and paymentsof customer. and sold by an experienced sales person. are not yet coming • Direct mail and telesales are more in. Make sure you2.1 Generate business with new prospects. cost-effective options for lower value have the capacity products. and finances in• Target prospects efficiently. For example, you might aim to complete place to enable you For example, analyse your top ten existing all sales under £100 over the phone. to fulfil your sales clients and identify customers with a • Selling via your website can be the targets and order similar profile.• Plan how to approach each new customer. For example, to win the custom of a key customer, you may drop your prices — cheapest method of all. Involve sales and marketing employees in the design and layout of the site. commitments. June Lonsdale, ” Anglo Recycling Technology Ltd creating a loss-leader — or give your 3.2 If you cannot reach your customers directly, product away on a trial basis. use an intermediary.• Make sure you have a strategy to eventually move prices back up to a profitable level or • You might target customers that are be prepared to live with reduced margins individual consumers through retailers. from these customers. • If you are breaking into overseas markets, consider using an agent. Contact the2.2 Develop more business with existing British Agents Register on 01423 560 608; customers. or contact the Manufacturers’ Agents’ Association on• Set out what you will do to get existing 01582 767618; customers to make higher-value purchases and buy different products (‘up-’ and You may need to focus on selling to the ‘cross-selling’). intermediaries. For example, persuading• Plan how to keep key customers happy retailers to display your product prominently. and build relationships. 3.3 You may be able to join forces with other2.3 Build up a mix of customers, to help businesses to boost your sales effort. safeguard your sales revenue. Do not rely too much on one customer and • For example, related, but non-competing, be aware of potential customer cashflow companies might share customer information. problems. If you plan to share customers’ information, the Data Protection Act requires you to inform customers which organisations you
  3. 3. Directors’ Briefing 3 will share their information with and give This is a detailed breakdown of the sales them the option to object. you plan to achieve by month, by customer and by product.3.4 Promote and support your sales channels • Base forecasts on previous sales levels. by communicating with your customers. Take into account information about major new orders, changes to customers’ buying• Advertise to build recognition and habits, and other factors such as pricing awareness of your product. and marketing activities.• Provide promotional material to • State the likelihood of achieving sales, intermediaries selling your product using a percentage figure, and set out or service. For example, brochures and when you expect to close them. leaflets. • Agree how many leads are needed to achieve the forecast growth. Set out howThink carefully about how customers would many leads should come from new andprefer to hear about, and buy, your products existing customers.or services. • Identify customers by name or by the “ number you expect to sell to. • Define the number of sales you expect In recessive times,4 Sales planning from a set number of visits, calls or other customers look contacts (your sales ‘conversion’ rate). for two factors —4.1 Together with your sales employees, • Determine the frequency and levels of sales ‘Am I putting my prepare your sales forecast. activity needed to achieve targets. business into a For example, allocate the amount of time safe pair of hands?’ to be spent on each account. Remember and ‘Are we really to include the whole range of activities getting good value Technology on your side needed to complete a sale. for our hard earned The right technology can significantly improve your selling efficiency. For best results, give your sales people the training and technical • Decide how many sales people you need to achieve your sales targets, and allocate territories or accounts (see 5.3). • Take into account your sales costs, money?’. Huthwaite ” Guy Aston, International support they need to use it. including promotional materials, salaries and equipment (see 6.1). A If you have many high-value customers Plan sales costs in proportion to the and prospects, customer relationship returns you expect to make. management (CRM) software can be an invaluable tool. 4.2 Prepare your annual sales budget. This is a summary of the sales forecast. It • Get CRM software from a supplier with does not change, and acts as a benchmark knowledge of your industry. that you can compare your updated • Make sure the software lets you forecasts with. generate the reports you need. For example, you should be able to analyse • Prepare pessimistic, realistic and optimistic and group your customers using versions of your budget, and plan what you different criteria. will do in each case. • If necessary, make sure data can be transferred and stored across 4.3 Revise your sales forecasts quarterly different sites. or annually, using past performance as • Feed in data from different parts of a guide. your business. For example, a sales rep should be able to see if customers • Compare sales achieved with your sales are over their agreed credit limit before budget (see 4.2). selling them new products. • If there is a significant difference between the two figures, find out why. B Use appropriate technology to improve You may need to plan new sales initiatives selling activities. or adjust your sales expenditure. • For example, you might provide your 4.4 Be aware of sales cycles. The total field sales reps with remote access amount of time taken to complete a sale to your intranet, so they can check can have a critical impact on your cashflow. warehouse supplies and input orders while on the customer’s premises. • If you have a new, untested product or service, it may take longer to make sales.
  4. 4. Directors’ Briefing 4• Work with customers’ decision-making negotiable areas. Expert habits. For example, large organisations • Get sales people to record their activities contributors may be slower to reach decisions. and produce weekly sales reports. These• Time sales drives and product launches should give scores out of ten for each Thanks to Guy well. For example, suppliers to the retail customer, reflecting the potential value Aston (Huthwaite industry are geared to making sales at of sales and the likelihood of conversion. International, 01709 exhibitions at the beginning of each year. Monitor the accuracy of their scoring 710081). procedures.4.5 Co-ordinate sales with your other business • Train your sales people, to improve product activities. and market knowledge as well as selling For example, do not plan for sales that your skills. production processes cannot fulfil. • Monitor and drive progress in supportive, weekly one-to-one meetings.• Plan sales campaigns to support promotional efforts (eg new product launches).• When you have defined your sales strategy, 6 Measuring performance you may need to adjust your marketing plan accordingly. For example, your sales 6.1 Conduct an annual or quarterly profitability people may identify a new customer group analysis. to target. • Examine and justify the time and money spent on different customers. Focus on5 Selling resources profitability rather than volume of sales and the quality rather than the quantity5.1 Use sales tools to increase efficiency. of contact. • Find out if turnover was lower or higher• A good database is essential to manage than forecast and, if so, why. information on customers. Where possible, • Analyse which sales people, and channels, link information held on different databases. are most productive, and why.• Consider what equipment could make your • Monitor the returns on sales costs. sales people more productive (eg mobile Distinguish between sales representative phones or laptop computers). and sales support costs. • Compare this year’s sales with the previous Also provide appropriate administrative year’s and with those of similar companies support to allow sales people to focus on in your market. selling. 6.2 Analyse conversion rates monthly, using5.2 Give sales personnel access to the sales people’s weekly activity reports. standard documents they need. • Work out how many sales have been• Include call sheets, standard contracts, made, and calculate their average value. proposal forms and promotional material. • Analyse the relationship between leads,• Use sales report forms to record relevant visits, proposals and orders achieved. information for each customer contact. • Monitor activity with both new and For example, customer name, reason for existing customers. contact, issues covered and follow-up • Examine each stage in the selling process action required. to find out where you are losing the sales.• Consult a lawyer to draw up major legal documents, such as long-term contracts 6.3 Identify problems, and find out what has © BHP Information or exclusive distributor agreements. caused them. Solutions Ltd 2011. ISSN 1369-1996. All For example, you might have reductions rights reserved. No5.3 Organise and support your sales team. in sales to key customers caused by an part of this publication may be reproduced or unreliable delivery service. transmitted without the• Make sure sales people understand what written permission of the sets your product or service apart from • Identify dead accounts and follow them up. publisher. This publication those of your competitors and get them to Making a sale to an existing customer is is for general guidance communicate this to customers. far easier and cheaper than winning a only. The publisher, expert contributors and distributor• Understand just what value your product new one. disclaim all liability for or service will bring to the customer’s • Find out what percentage of your customer any errors or omissions. business; this is your value proposition. base no longer buys from you, and why. Consult your local business support organisation or your• Give sales people key information — for professional adviser for help example about pricing, profit margins and and advice.Published by BHP Information Solutions Ltd, Althorp House, 4-6 Althorp Road, London SW17 7EDTel: 020 8672 6844,