Kerry Start-Up 101: Strategic Sales Plans and Courses of Action
Start-Up Sales Strategies
Revenue generation obviously depends on sales. Boosting your sales performance will require focus and action across several dimensions. If you are not thinking scientifically about sales; you need to be. The considerations outlined below reference a sales team, but if you are a start-up, these principles are also 100% relevant to a sales team of one.
Decisive Leadership – Define Boundaries, Collaborate, Plan, Execute
Sales management structures and processes must be unambiguously defined and never subverted. Clear boundaries must be drawn around the responsibilities of each person involved. There is a need to get the entire sales staff together on a regular cadence in order to collaborate on all issues surrounding team operations and solutions to sales challenges. The established members of the sales team will bring a wealth of historical knowledge and it is an opportunity for strategic inclusion, team and morale building and achieving buy-in. Following on from these collaboration events, decisive management is required to establish, communicate and execute a fit-for-purpose strategic sales plan. Essentially the plan must focus on improving profitability from sales activities by increasing sales volume of higher margin offerings and constantly controlling costs.
Systematically Understanding the Market Needs
Seeking sales by trawling legacy databases counts as nothing more than a poor effort. The needs and wants of the market must be thoroughly understood in order to succeed. You have to fully understand the problems that your customers (potential or existing) are facing, the benefits they seek or the buying criteria they value. Cost reduction is one standard consideration for your customers, but deeper intelligence gathering is required in order to fully understand the opportunities which you can target. A deep-dive into the features and pricing of competing products and services available on the market is also critically important in order to understand the state of the market and how you compare.
Establish and Agree Your Differentiation
In a market environment where prices are often similar, you must clearly define your unique value proposition in order to mitigate commodification and provide superior value. Your best and brightest staff and advisors/mentors must be mobilized to participate in this activity (Kotler et al. 2006). In the current market conditions, it may be important to highlight the cost reduction and cash flow enablement opportunities that you can provide to your customer. Differentiation options in this regard include superior product feature-set, unique capabilities, subscription billing, bundling and value-add ancillary services (Reinartz and Ulaga 2008). While your immediate focus may be on product sales, your organisation must explore professional services and other spin-off opportunities in terms of revenue generation and how they can provide a unique value proposition for you into the future.
Once the market is understood, decomposition and segmentation, ‘the pillar of any well-conceived sales and marketing strategy’ (Cuevas, Donaldson 2016) must be performed to thoroughly understand the various sales opportunities in the region and how best to exploit them. Many options exist in terms of market segmentation (e.g. by sales potential, company size, industry domain etc.) but the segmentation decisions must align with the way your salesforce is organised.
Organisation of Your Sales Forces
Agreement must be reached regarding the way the sales team is best organised. Opportunities must be sought to maximise the effectiveness of the team by organising them in such a way as to play to their strengths. Is geography a constraint? In the absence of territorial boundaries, the addressable customer market must be carefully divided between sales reps in order to enable them to achieve/exceed their sales targets without cannibalising each other’s sales opportunities. In addition to market intelligence sources, lead generation should also involve dimensions such as (a) referrals from existing customers, (b) seeking to win back old customers and (c) close collaboration with your marketing function to generate new leads (via an agreed, multi-dimensional marketing strategy).
For both new and existing accounts, a scientific account and relationship strategy must be actioned (Cuevas, Donaldson 2016) to foster trust by demonstrating concern and commitment to customers. With this relationship marketing mindset, your sales reps must strive to firmly embed your organisation within the customer organisation and continuously alleviate potential post purchase dissonance.
As previously touched upon, it is recommended that a solution sales approach be utilized which would further deepen the product stickiness factor in customer organisations.
The sales strategy must always focus on realizing profitable business opportunities at the least possible cost. Consideration must also be given to biasing sales effort towards onboarding customers who will provide ongoing strategic and high life-time values. Existing customer advocacy is recognised as a key element in generating new business as is the ‘halo effect’ in terms of company and product promotion.
Designing Objectives, Compensation and Controls
Individual objectives must be assigned to each of your sales reps which align with this overall objective to increase market share.
S.M.A.R.T. objectives for maintaining and increasing market share for existing accounts must involve (a) retaining current revenues, (b) re-negotiating more profitable contract and trade terms, (c) up-selling/cross-selling the most recent and profitable solutions and (d) customer satisfaction & Net Promoter Score (NPS).
Objectives for new business must focus on (a) solution selling of profitable products, (b) selling software subscription upgrades, (c) selling professional services (installation and on-going support, maintenance and operations) and (d) customer satisfaction & NPS.
Each rep must have an individually tailored compensation plan based on their objectives and targets. These plans must be in line with their personal capabilities. Compensation must be designed to motivate your sales team and must be designed such that the team members have a realistic chance of achieving their desired levels of income.
Closer monitoring and control of your sales team is also recommended. Formalised weekly one-to-one meetings with each sales rep is necessary. Shortening the measurement cycle will reveal deviations from the plan on a more granular level and will give you a greater sense of what is happening on the ground allowing you to correct any problems as soon as they arise. This meeting will also give you the opportunity to assess the individual sales reps concerns in private, acknowledge their efforts, motivate them and offer support. The use of technology to enhance real-time sales progress reporting should also be investigated to further lessen the reporting cycle.
The key components of an effective strategy to boost the sales performance include demonstrating decisive leadership, systematically defining the market needs, establishing your unique value proposition(s), performing effective market segmentation and appropriate structuring of the sales team objectives, accounts, compensation and controls.
A coherent sales manual must be developed to enable the sales team to unambiguously understand their role and empower them to achieve their mandated objectives within the approved guidelines. A training strategy must be put in place in order to provide the sales team with the precise Knowledge, Skills and Abilities (KSAs) required to effectively perform their roles and achieve their objectives. Regular auditing of the sales team performance and adherence to procedures must be carried out.
If you haven’t thought deeply about sales you’ll have found this a tough read but a necessary one..
Cuevas, Donaldson, L. (2016) Sales Management.
Kotler, P., Rackham, N., Krishnaswamy, S. (2006) ‘Ending the war between sales & marketing’, Harvard Business Review.
Reinartz, W., Ulaga, W. (2008) ‘How to Sell Services More Profitably How to Sell Services More Profitably The Idea in Brief The Idea in Practice’, Harvard Business Review.