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Strategic Planning powerpoint presentation.ppt
- 1. Strategic Planning Sales PlanningStrategies and Resource Management Prepared by Larry Podgorny
- 2. Why Plan? Alice: Whichway should I go? Cheshire Cat: That depends on where you are going. Alice: I don’t know where I am going. Cheshire Cat: Then it doesn’t matter which way you go!! Lewis Carroll 1872 Through the Looking-Glass
- 3. The Plan • Inthe beginning was the plan. • And then came the assumptions. • And the assumptions were with out form. • And the plan was completely without substance. • And darkness was upon the face of the workers.
- 4. Definition of Strategy/Strategic •A careful plan or method • The art of devising or employing plans or stratagems toward a goal • Of great importance within an integrated whole or to a planned effect • Necessary to or important in the initiation, conduct, or completion of a strategic plan
- 5. What Strategic Planningis Not • Strategic planning is not forecasting • Strategic planning is not the simple application of quantitative techniques to business planning. • Strategic planning is concerned with making decisions today that will affect the organization (product line) and it’s future. • Strategic planning does not eliminate risk, it helps managers access the risks they must take by gaining a better understanding of the parameters involved in their decisions.
- 6. Simplified Process ofStrategic Planning The process of strategic planning is a step-by-step approach three key questions that lie at the heart of any business strategy: • What are you going to sell? • Who are your target customers? • How can you beat or avoid your competition? If you can answer these three questions well, you have a strategy.
- 7. Simplified Process ofStrategic Planning (Cont.) • There’s no denying that a simplified process involves complex issues. • The process involves digesting a lot of information and requires some fairly difficult analysis. • Good strategic planning should be simplified not simplistic. • Good intentions alone does not get the job done.
- 8. Simplified Process ofStrategic Planning (Cont.) • You need to see it big at first. Start at a high level. • Sift through all of the noise to get to the important details • The next step is do the things that matter very well. • Occasionally, go back up to the high level to make sure everything is still on course.
- 9. Simplified Process OfStrategic Planning- Start By Studying The Way It Is Now • You need to gather basic information and facts without making any judgments. • Based on this information you build some assumptions, again without making judgments. • This process is the central part of the planning process and needs to be reviewed in detail because this information is the foundation for all further strategy discussions and decisions.
- 10. Data 1. External Situation 2.Internal Situation 3. Capabilities and competencies Ideas 4. Assumptions Analysis 5. Strategic assessment Strategic Issues Direction 6. Strategies Commitment 7. Mission Statement Goals Objectives Implementation 8. Action Plans 9. Budgets 10. Schedules
- 11. Simplified Process ofStrategic Planning- How it Works Planning •Gather Information •Assess Capabilities •Make Assumptions •Make Strategic Assessments •Formulate Strategy •Establish Goals and Objectives •Formulate Tentative Action Plans •Finalize Action Plans Execution Monitor Developments and Progress
- 12. Sales Plan Target Account Strategy Key AccountStrategy Maintenance Account Strategy Why Bother Account Strategy Territory Plans Key and Target Account Plans Action Plans Control & Evaluation Shorter Term Business Plan Market Plan Strategic Planning Total Organizational Planning Marketing Information Strategic Tactical Long Term Business Plan
- 13. Start by Studyingthe Way It Is Now The course to your vision, like all navigation, starts with a known position. • What markets should you pursue • Who are your competitors • Where is your competitive advantage • What are your strengths • What are your weaknesses Figuring out point A is the first essential step to charting a course to get to point B. So get your bearings! Where are you today?
- 14. P O S I T I O N I N G Which segments / customerswill we concentrate on ? Whom will we challenge for these customers? What incentives will we provide to get them to buy from us… rather than from competitors? CUSTOMER TARGETS COMPETITOR TARGETS CORE STRATEGY
- 15. BUSINESS STRENGTHS ACCOUNT ATTRACTIVENESS High Low Strong Weak DEFININGAND SELECTING KEY/TARGET ACCOUNTS • Size • Growth • Profitability • Location • Purchasing criteria and processes • Current suppliers • Status of customer (prestige) • Product range • Product efficacy (the power to produce an effect ) • Service quality (inc. distribution) • Price • Associated services (e.g. Tech advice) • Reputation/image • Past experience • Quality of sales staff Invest / Grow Selectively Invest Maintain Manage for Cash / Withdraw
- 16. Strong Strength ofPosition Weak High Account Opportunity Low ACCOUNT PORTFOLIO ANALYSIS Attractiveness: Accounts are very attractive since they offer high opportunity and sales organization has strong position. Sales call strategy: Accounts should receive a high level of sales calls since they are the sales organization’s most attractive accounts. Attractiveness: Accounts are potentially attractive since they offer high opportunity, but sales organization currently has weak position with accounts. Sales call strategy: Selected accounts should receive a high level of sales calls to strengthen the sales organizations position. KEY TARGET MAINTENANCE WHY BOTHER Attractiveness: Accounts are somewhat attractive since sales organization has strong position, but future opportunity is limited. Sales call strategy: Accounts should receive a moderate level of sales calls to maintain the current strength of the sales organization’s position. And, efforts should be made to replace field sales calls with telephone sales. Attractiveness: Accounts are very unattractive since they offer low opportunity and sales organization has weak position. Sales call strategy: Accounts should receive no field sales calls and a minimum of inside sales resources.
- 17. High ACCOUNT ATTRACTIVENESS Low Strong Weak YOUR STRENGTHOF POSITION ACCOUNT SEGMENTATION AND PRIORITIZATION KEY ACCOUNTS • 10-20% of your account base • 80% of your GP$ • Receives less than 50% of your resources TARGET ACCOUNTS (Your competition’s Key Accounts) MAINTENANCE ACCOUNTS WHY BOTHER? ACCOUNTS • Gets very little attention • 40-45% of your account base • 10-15% of your GP$ • Receives 30-40% of your resources • 30-40% of your account base • Less than 5% of your GP$ • Receives 20-30% of your resources • Creates 90% of your “headaches”
- 18. Strong Weak ACCOUNT OPPORTUNITY Strong COMPETITIVE POSITIONWeak Sales Team and Selling Effort Sales Channel: Field Selling and Inside Sales Selling Effort: Heavy KEY TARGET MAINTENANCE WHY BOTHER Sales Channel: Major Account PROGRAMS Selling Effort: Heavy by Specialist Sales Channel: Direct Marketing, Teleselling, and Field Selling Selling Effort: Heavy (best prospects) Low (other prospects) Sales Channel: Inside Sales Field Selling and Teleselling Selling Effort: Moderate Sales Channel: Teleselling, Direct Marketing, and Some Inside Selling Effort: Low
- 19. Better Understandingof Customer’s Needs Better Selectivity Better Selling Strategies Better Time & Territory Management The Selling Ballgame Changing Business Environment Leads to Changing Selling Environment Resulting in Harder to Get and Hold Customers and It Costs More! Implications
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- 21. Your Scarcest Resource TOTALBUSINESS DAYS 2002 252 Less: • Vacation 10 • Holidays 10 • Personal absences 5 25 WORKING DAYS AVAILABLE IN YEAR 227 Less: • Meetings, Trade Shows, etc. • Training • Customer unavailability • Miscellaneous TOTAL
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- 23. The Contemporary MarketingConcept Customer Orientation The purpose of a business is to satisfy the needs of customers. Products and services are important only to the extent that they satisfy these needs—they are means rather than ends. Therefore, marketing starts with the determination of customer needs and ends with the repeated satisfaction of those needs. Profit Orientation A business must satisfy the needs of its customers at an acceptable level of profitability. Therefore, the purpose of marketing is not simply to generate sales or achieve a certain market share, but rather to produce profitable sales and a profitable market share. Integrated Effort All activities or a business should be integrated and coordinated so as to satisfy customer needs at a satisfactory rate of profitability. Marketing must be coordinated with finance, production, personnel administration, engineering, and research and development. Moreover, all marketing activities must be effectively integrated and coordinated in order to achieve market impact.
- 24. I. Customer ChangeDrivers • Raw material shortages • Regulatory agencies • Environmental • Global competition • Trade agreements (NAFTA, GATT) • Mergers/acquisitions • Automation/technology • Reduction in cycle time • “Price” • “Quality” • Down sizing
- 25. Customer Change Drivers(cont’d.) • Reengineering • Out-sourcing • Systems versus products • Out-sourcing of engineering and R&D to vendors • Long term contracts (5 years) • Sharing of warranty costs by suppliers • EDI • Vendor reduction
- 26. II. Purchasing Behavior/BuyingRelationships • Manage supply channel • – strategic alliances • – partnering • – customer linked strategies • – integrated supply • National account programs • Single source • – product breadth • – product depth • EDI • – seamless order and delivery • – automation • – paperless • Removal / reduction in any redundancy • Vendor reduction
- 27. Purchasing Behavior/Buying Relationships(cont’d.) • Broader offering of “true” value added services • Proof of performance—vendor score cards provided by vendors • Vendor as a business consultant to account • Problem solving vendors will be chosen • Reduction of in-house expertise by customers • Require modular / systems, global vendors with total quality • Purchase “packages” of integrated components (systems) versus single components • Better P.O.P. merchandising
- 28. III. Role ofthe Sales Team • Increased speed of response • Technical value-added sales calls • Greater knowledge of customer, competition and sellers company • Ability to make decisions (empowerment) • Relationship selling at higher level—sell the “whole” customer • Empathy for the customer • Functional sellers • – sales teams/sellers focused on opening accounts through “selling” creative solutions to problems • – account managers on accounts to “service”
- 29. IV. Sales ForceIssues / Problems • Willingness to change • Different organizational structure, e.g., Hunters and Farmers • New skills • Sales force automation • Accountability / evaluation / compensation • More specialized sellers required—currently generalists • Total company will become a selling team—cultural change • Shift paradigm from products to integrated solution systems • More research at the account level • Sharing of customer information
- 30. V. Change Areas •International, national account perspectives • Better technical skills • Better research skills • “Understanding” • Customer specialized sales forces
- 31. Why Do SalesOrganizations Become Obsolete? Any business is good! All Business is good! What business is good? Certain business is good! One product One market One product One big market Old/new products many markets Redefine customer segment selling Sell to survive Sell volume to lower costs Sell volume to hold share Optimize to get best returns Start-up Volume growth Market share Optimization Growth Evolution I II III IV
- 32. Customer Resource Allocation Decisions Whatsegment(s) to call on What volume segments to call on: – High volume vs. low volume – National accounts vs. smaller accounts What profitability segments to call on: highly profitable vs. less profitable New vs. existing accounts High penetration vs. low penetration accounts What geography to focus on Headquarters vs. field calls THE PURPOSE Product Resource Allocation Decisions New vs. existing products High volume vs. low volume products Easy to sell vs. hard to sell products – Familiar vs. unfamiliar products – Products with high short-term impact and low carryovers vs. products with low short-term impact and high carryover – High-tech products vs. low -tech products – Long selling cycle vs. short selling cycle – Differentiated vs. non-differentiated – Highly competitive vs. noncompetitive Activity Resource Allocation Decisions Hunting vs. farming Selling vs. servicing Relationship expert vs. product expert vs. industry expert vs. customer expert SALES FORCE TIME & EFFORT
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- 34. Where buyers experience thegreatest challenges EVOLUTION OF BUYING PROCESS Planning 1 Recognizing 2 Searching 3 Evaluating 4 Selecting 5 Committing 6 Implementing 7 Tracking 8 Selling organizations get involved at different stages in the customer’s buying process VENDOR “Present-Handle Objections-Close” SUPPLIER Searching through implementing ADDED VALUE PARTNER Entire process: Planning through tracking results Where Sellers Focus Efforts
- 35. Sellers Boundary Role Communication Selling Organization MarketingStrategy policies procedures programs REP Communication Buying Organization Procurement Strategy policies procedures programs
- 36. Transactions and Relationships 1.Selling dominates learning 2. Talking dominates listening 3. Persuading the customer is product driven and benefits focused 4. The goal is to build buyers and sales through persuasion, price, presence and terms 1. Learning about the customer is intense and dominates selling 2. Listening dominates talking 3. Teaching the customer is need driven and problem focused 4. The goal is to build relationships through credibility, responsiveness, and trust Transaction Selling Relationship Creation
- 37. TYPICAL PROCESS Help customers recognize and define problems andneeds in a new or different way. Show superior solutions, options, and approaches that customers may not have understood or considered. Help customers overcome and remove obstacles to acquisition. Make purchase painless, convenient, and hassle- free. Recognition of Needs Evaluation of Options Resolution of Concerns Purchase Show customers how to install and use product. Implement- station
- 38. Customer generally knows how to use product. Recognition ofNeeds Evaluation of Options Resolution of Concerns Purchase Implement- station Little or no opportunity to create sales value. Seller can help make purchase painless, convenient, and hassle- free. Little or no opportunity to create sales value. Customer has few issues or concerns. Customer already understands alternative solutions. Little or no opportunity to create sales value. Customer has already defined needs and problems completely. Little or no opportunity to create sales value. ADDING VALUE TO A TRANSACTIONAL SALE
- 39. Seller can create most valueearly in the process by helping customers define needs and solutions. Consultative seller can design customized solutions and help customers make informed choices. Consultative seller can counsel customers and help resolve concerns. Consultative seller can advise and problem solve implementati on issues. Recognition of Needs Evaluation of Options Resolution of Concerns Purchase Implement -tation ADDING VALUE TO A CONSULTATIVE SALE
- 40. Sales Call Time 5%Needs Analysis 50% 10% Problem Solving 30% 35% F/B. Presentation 15% 50% Trying to Close 5% TYPICAL SALESPEOPLE KEY ACCOUNT SALESPEOPLE
- 41. Buying Discipline inTransition • Tactical Purchasing Strategic Sourcing • Regional Focus Global Focus • Large Supplier Base Strategic Partners • Commodity Purchases Technology Investments • Product Focus Solution Focus • Buying Parts Managing Processes • Price Focus Total Cost / Value
- 42. Research Findings • Theworld of selling is dynamic by customers’ changing needs and values. • Customers are more reliant upon sellers for: – information – advice – problem solving • Information technology is having a major impact on customer / seller relationships. • Total organization win, sustain, and grow customer relationships.
- 43. Implications for Salespeople •Salespeopleneed to understand how to: • Respond to the needs customers have for information, advice and problem solving. • Create value beyond their products and services in a way that differentiates the selling organization from its competition. • Create and manage the organization-to- organization relationship.
- 44. Sales Discipline forthe 90’s How you can… Thinking Strategically Anticipate ways to create value for customers Managing Information Deliver focused, usable information to customers and associates Advancing the Relationship Increase customers’ trust in and commitment to you and your company Orchestrating Resources Form an efficient sales team and manage it cost-effectively
- 45. Key Shift—Selling Competencies “WorldClass” • Work Processes – Systems • Information Flow Transactional Selling Strategic Selling FUTURE Strategic Selling Transactional Selling NOW
- 46. “Bottom Line” A businesscan no longer rely on the uniqueness of their products to retain customers or grow new sales revenue. Customers will align their business with strategic suppliers who understand their business and bring a unique offering which adds value— impacts their “bottom line” through increased sales revenue or reduced costs
- 47. Natural Sales Skills 60% 5% 35% 5%“Process the requisite selling skills that make them stand out” 35% “Just manage to pay their way” 60% “Just there for the beer”
- 48. Super Salesperson’s Characteristics •Charisma in sales situation • Sense of humor • Good planning and preparation skills • Physical energy • Tenacity and resilience at rejection Peak Sales Performers Study of 1,500 Achievers Over 20 years • Take risks and innovate • Powerful sense of mission • More interested in problem solving • See customers as partners • Rejection is information • Use mental rehearsal
- 49. • THE SALESPERSONOF TODAY IS EXPECTED TO: • Do more forecasting of future customer requirements • Spend more time planning calls • Spend more time in group, system, and strategic selling • Improve territory management • Do less driving in the territory • Spend more time in telephone selling • Do more “active” selling • Prepare more detailed market reports
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- 51. The Key Challenge Implications 1.Less discounting. 2. Selling higher margin products. 3. Selling more product lines to each customer (cross- setting). 4. Being more selective and discriminating in qualifying potential buyers. 5. Better use of selling time (deployment). Sales Productivity = G.M. C.O.S. Where: G.M. = Gross Margin Dollars C.O.S. = Cost of Sale in Dollars
- 52. SALES FORCE PRODUCTIVITY 1st Effectiveness 2nd Efficiency Productivity Clearpriorities in terms of: • Markets • Customers • Products • Activities And clear strategy To drive the allocation of resources Managing the allocation of sales resources to: • Markets • Customers • Products • Activities Measure the "return on investment" regularly. = +
- 53. EFFICIENCY EFFECTIVENESS PRODUCTIVITY Number ofdoors opened What is done once in door Components of Sales Productivity
- 54. SUMMARY Defined Getting infront of Using skills and abilities customer at minimum to maximize sales cost potential Mechanisms Working harder: Working smarter: for improving – time management – coaching – incentives – skills training – call reports – account strategies – territory design Measures – penetration – success rates – call rates – repeat business – cost / call – sustainable margins Sales Efficiency Sales Effectiveness