Chapter 8 Selling With a Strategy Strategy Defined A strategy is a to assemble your resources Skills Knowledge Energy Time People and decide how to use themto accomplish your objectives. In selling, an effective strategy requires you to: Understand your customer and your Assemble the product benefits and service that meet customer needs better than anyone else Decide how to use your support team Evaluate the competition Then -- call on your accounts. No matter how complex or how simple your sales strategy is, it should always done with thought and planning. Strategy should contain the following elements: A clear link to your company s marketing efforts An analysis of your local market An understanding of what customers Strategy Includes: Identification of key customer Specific sales goals, if possible for each segment An analysis of your competitive strengths and weaknesses with each group of customers A written plan describing how you will achieve your objectives Sales strategies begin with a very broad, long-term plan called a territory strategy Then the plan become more refined or drilled down to specific key account strategies and eventually to a call strategy for a specific call on a specific customer. Territory Strategy Your territory is the generate sales. area or group of customers from which you are expected to A territory strategy is based on: Your personal analysis of all customers needs Your local market dynamics Your competitive situation based on your opportunities and barriers Fit With Corporate Strategy? Each salesperson s territory strategy should be part of the company s larger strategy There is usually a basic set of company marketing strategies that serve as a foundation for regional and territory selling strategy Consistent implementation of marketing strategies by salespeople helps the company
Spend its dollars more efficiently Ensures that customers are treated fairly and equitably Reinforces a consistent message Companies expect the cooperation of their salespeople in implementing corporate strategies Sales people are expected work with each buyer in a highly individualized way but always consistent with the company-wide marketing Company marketing strategy can really help the salesperson Here Are Some Things You Need To Know Products and : Which products or services should be emphasized? Which products or services will be phased out? Which products or services are most profitable Place (distribution): Who is my primary customer or segment? Do I also pursue customers above or below my target level? To what extent do I sell direct versus helping reseller efforts? Pricing: Are prices set, or can I? If I negotiate, what are my guidelines? In what situations should I adjust price? What are the gross margin objectives? How do we get paid for services? Promotion: What is the theme of our marketing program? What promotion program will we offer? How can I use our promotion programs? What advertisements will run locally? How should I follow up on them? Is there any customer database information I can use? Who can I call on for help in selling? People: What should I have? What training or development should I work on? New salespeople also need to make sure they understand what customer segments the company has selected as their highest. Ask the following questions... Which types of customers do we want? How do I identify these customers? What are their needs? What special advantages do we offer these customers? Developing A Territory Plan:
A recommended approach is for the salesperson to develop a ( ) territory strategy This process works - it generates increased selling success and is well worth the effort 1. Analyze Your Local Market A basic local market analysis includes at least three elements: Local dynamics Customer needs Competitor activities and trends 2. Confirm Sales Goals Setting sales goals helps you prioritize your time and should relate directly to company strategy They often include: Sales goals Profit goals Product goals Penetration goals - the proportion of all potential customers you are selling to Concentration goals - the proportion of each customer s business that you have Sales Volume Goals Sales volume goals are by far the most common and most of all sales goals Can be measured as... Dollars Units Market Share Profit Goals Profit goals can be measured as... Gross margin dollars ---- Total Sales less the cost of the product Net profit dollars Gross margin dollars less expenses Profit goals encourage salespeople to focus on sales rather than only the level of Product Goals Product goals are established To encourage the salesperson to sell more of a specific To emphasize specific products that are the focus of the company s product strategy Important: This does customer s best interests mean that you promote products that are not in the Penetration Goals Market penetration describes the within your sales territory of all customers that you are selling to Penetration goals are designed encourage the salesperson to contact all potential customer
Examples Sell 35% of all customers in the market Sell 50% of all customers in the over $1 million segment Concentration Goals Market concentration refers to the proportion of business you are doing with each customer Retention goals describe the percent of customers you lose each year Sample concentration goals might include: Increase the average percent of each customer s business by 10 percent Customer concentration average of 39% Key Customer Segments A segment is a group of customers who are similar in the way they make decisions or who have a similar set of If you can identify and target the most profitable segments you can allocate your time more effectively Segments in Your Territory The company marketing strategy may have defined and prioritized segments Demographic segments Product Usage segments segments Relationship buyers Economic buyers Business Buyers Salespeople further segment their market by identifying specific customers that fall into targeted segments This helps you determine: Where your efforts will pay off Who is likely to appreciate your products and services What value bundle you need to create to get their business Prioritizing Segments Your goal is to select or on getting their business. the most productive segment(s) and focus your efforts Even if your company has not clearly communicated their priority segments it is still highly useful for a salesperson to segment and prioritize customer groups on their own. If you concentrate your selling efforts in a more precise manner and utilize resources more effectively you will get much better results. When you evaluate your customer segments, target one or two as top segments - worth more of your attention and time. Top or target customer segment(s) should: Be contributing significantly toward your sales goals Be to sell to (Now or potentially) Have needs that match your products and services
Be measurable - identify specific customers in this segment by name, and estimate sales potential It is common for the 80-20 rule to apply: (80% of your come from 20% of your customers) to Understand Value for Key Segments It is critical to identify and understand the value structure of targeted segments and how they differed from others Tangible Value Tangible value is value the customer can measure. Absolute product Relative or competitive performance Service quality Output quantity Output quality Price Intangible Value Intangible value is value that comes from less measurable Reduced time or hassle Ease of doing business Increased flexibility Problem-solving expertise Dependability Relative Value To understand how the value of your product/service offer competition, you must return to understanding what the customer values against the It is decided by real customers who decide to buy one product rather than another To decide how you stack up to the competition: Talk to your top customers and to people you d like to have as customers about their needs for products and services Ask them how important some of the benefits are Ask them who is their best supplier. Ask them who is their worst supplier. Building Competitive Selling Strategies Lead with your If after your competitive analysis, that you are strong on a factor that customers value, make sure customers know about it! Capitalize on the strengths you have. Set the standard that others must meet. If you choose to set the quality standard in an area you can perform more effectively or more efficiently than your competition, you may be able to maintain a competitive advantage for much longer.
Building Competitive Selling Strategies If you can t fix it, it. If you have a weakness on a factor important to customers, don t simply ignore it Re-arrange your business around it and sell the value of a new way to serve customers. Summary A strategy is a plan to assemble your resources and decide how to use them. You need to know your company s strategies in key areas. your local market. Your analysis should result in a clear understanding of your customer s business and production environment, and needs. Once you understand those needs, begin to develop a differential advantage. Differential advantage, along with company goals, will lead you to realistic, achievable territory goals. When you have identified your most important segment of accounts, analyze what they value and your competitive strength for that segment.