With smooth selling, sales strategy can be broken down into eight strategic components:
Strategic Component One: Target Markets and Customer Segmentation
A first course of action is to identify those groups of customers that are of the most value to the business. These are the groups that predictably buy more and at better prices (higher margins). Knowing this will help drive selling costs down and enable your company to focus its product and service development efforts.
Strategic Component Two: Buying Personas and Influences
Identify those individuals by function within an organization that are likely to influence a purchase decision for the company’s products or services. This includes the four key buying-influence roles: (1) economic, (2) technical, (3) user, and (4) coach. Covering your bases by interacting with these four buying influences will increase the probability of making a sale and making the sale at higher margins.
Strategic Component Three: Channel Strategy
Should the channel strategy be direct, indirect, or digital? Channel strategy drives selling costs down, drives revenues up, and potentially extends the market reach of a company. A company must determine the sales channels that can reach the target markets and customers most effectively. Some of the factors to weigh:
- Direct versus indirect versus digital sales team
- Hunter versus farmer sales team
- Inside versus outside sales team
- Complex solution versus transactional sales environment
- Salary heavy versus incentive heavy compensation plans
- Customized versus packaged products/services
Strategic Component Four: Sales/Customer Buying Process
In simple terms, a sales process is a systematic approach (a repeatable process) involving a series of steps that enables a sales force to close well as revenues. There are many reasons why this is important. Process increases lead conversion rates, shortens the sales cycle, increases the average dollar sale, improves profit margins, increases the productivity of the sales force, and drives selling costs down.
Strategic Component Five: Sales Message and Your Value Proposition
Your sales message is the unique message that the sales force delivers to target customers. This message is what sets your company apart from your competition. The message should be simple, presented from your customer’s point of-view, as well as memorable, and differentiating. Effectively communicating your company’s uniqueness/value increases conversion rates, shortens the sales cycle, eliminates the competition, increases the average dollar sale, improves profit margins, and increases the productivity of your sales team.
Strategic Component Six: 5 x 5 Revenue Growth Strategies
Like any good investment portfolio, a business needs to diversify its sales growth investments. The five ways that any business can increase its revenues and gross profits are to:
- increase the number of sales leads coming into the business;
- improve the lead-to-close conversion rate;
- increase the number of annual customer transactions;
- increase the average dollar sale per transaction; and,
- improve gross profit margins.
By increasing performance by just 10 percent in each of these five areas, a business will increase revenues by 46 percent and gross profits by a massive 61 percent. It pays to do the math.
Strategic Component Seven: Performance Metrics
Performance metrics are the quantitative and qualitative measurements a business uses to measure the success or failure of its sales operations. These metrics should include both results- and activity-based measurements. What gets measured gets done, as the old adage goes. Performance metrics ensure that a business is using its sales resources efficiently to drive selling costs down and revenues up.
Strategic Component Eight: Sales Compensation
Proper sales compensation ensures that a business can recruit and retain the most qualified sales talent as well as drive the desired sales behavior expected from members of the sales team. Five methods should be considered when a business decides how it will financially compensate the members of the sales team for their role in generating sales:
- Salary only
- Commission only
- Salary plus commission
- Salary plus bonus
To do this right requires an assessment by an accomplished sales leader due to the number of variables involved. Done incorrectly, there will be unintended consequences.
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Smooth Selling Forever enables small and mid-size business leaders to generate significant, predictable, and sustainable sales growth. Based in the science of selling, when applied correctly and managed vigilantly, smooth selling produces revenue results in a systematic fashion.