Fundamentals and challenges of sales strategy
Successful sales begins with answering the following question: “In which markets do I want to sell which products to whom through which distribution channels?” This question adds a concrete strategy to specific sales targets such as revenue growth or market share, with recommendations for action to support target achievement.
Critical self-reflection
The first step in developing a long-term sales strategy is a careful analysis. Only in this way can subsequent decisions be made on a sound basis.
Before illuminating external factors, it is important to look inward:
What strengths and weaknesses can be identified in relation to the company and any existing sales strategy?
A SWOT analysis and a list of core competencies as well as unique selling propositions (USPs) of the company and its various products can provide information here.
In focus: Market strategy
One focus of the sales strategy consideration is the prioritization of markets. The prerequisite for this is market segmentation based on industry- and application-specific criteria. Here, the various market-related factors, but also their fit with company-specific characteristics, are included in the analysis. The focus is on the accessible, relevant market potential.
Prioritization of market segments
The derived segments are then prioritized for market development. In many cases, the question “Which markets do I not want to explore?” is more difficult to answer than identifying the core markets. However, only a conscious focus can counteract a “dispersal” of sales.
Systematic approach
Without a structured plan and defined priorities, even experienced sales staff find their work difficult. Instead, clear role assignments and guidelines aligned with corporate goals help.
In addition, strategic planning should take into account that changing purchasing behavior or trends such as digitization and more price transparency require flexible adjustments over time and a strategy must be kept up-to-date accordingly.
Starting points for strategy development and implementation
Step 1: Target group segmentation
The next step is to develop the segment-specific sales strategy for the markets selected in the first analysis phase.
For this purpose, relevant target groups and customer needs should be systematically evaluated in the respective market. Here, it is important which groups offer the greatest economic potential, but also in which cases particularly long-term and stable customer relationships are possible and how easily the needs of the customer groups can be addressed. Big Data can be an insightful source when it comes to better understanding customers and their buying behavior.
Step 2: Choice of distribution channels
The selected customer groups are now to be reached in the best possible way, so consciously deciding on specific sales channels is another important element of the sales strategy
- Are the products distributed via a traditional sales force?
- What role should electronic distribution channels (marketplaces, “affiliates,” webshop, etc.) play?
- Are all products and services offered through all sales channels?
- What is the best channel for acquiring new customers?
In doing so, the channel mix should definitely be tailored to the individual company requirements and customer needs and should by no means just follow trends and buzzwords such as multi- and omni-channel. Instead of simply presenting identical offers on different platforms, each additional sales channel should add value, such as increased efficiency or reaching new customers.
Step 3: Differentiated goal setting
Now that relevant markets, customers and channels have been defined, the next step is to set differentiated targets for each segment. Depending on the respective goals to be achieved, suitable KPIs should be selected in order to quantify the achievement of the goals. The focus can be on sales, earnings or pure market share targets.
Implementation success
Once these central steps have been taken, further adjustments, for example to pricing and the conditions system, can promote the success of the sales strategy.
In any case, the developed strategy should be translated into a process with concrete steps and measures.
Finally, it is important not to forget to continuously measure the implementation success of this process and to track its development. This is the only way to make adjustments if necessary and to respond flexibly to internal or external changes. A clear presentation of the most important defined key figures in a dashboard facilitates the systematic review of the sales strategy.
Experience from our consulting projects
Roll & Pastuch has years of project experience in the development of a successful sales strategy:
- Development of the sales strategy including business plan
- Quantification of a previously predominantly qualitative strategy
- Establishing an omni-channel sales strategy
- Support in setting up an e-commerce unit
- Systematic evaluation of market attractiveness
- Market segmentation and prioritization
For more information read a practical example: “Topline Growth” – Sales strategy.
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