Sales strategy and its importance
Kirjoittanut: Lucas Pääkkönen Alvim - tiimistä SYNTRE.
Sales strategy and it’s importance
Writen by: Lucas Alvim, Aman Kumar and Ariel Cohen
Sales strategy refers to a carefully designed plan of action that outlines the approach a business will take to sell its products or services to its target market. A well-crafted sales strategy is critical for the success of any business as it can help to differentiate a business from its competitors, increase sales revenue, and ultimately lead to sustained profitability. This academic essay aims to define sales strategy and highlight its importance in the context of modern business practices.
Understanding the market
Identifying the target market and understanding their needs and wants Analyzing competitors and their sales strategies conducting market research to gather relevant data Selling any product or service is not easy at all and sales are a very important part of any business. Your entire business depends on sales. That’s why you need to make strategies to increase your sales continuously and also need to update those strategies from time to time.
Strategies: To increase the sales of the business, the first thing is to make a strategy (Strategies to Increase Sales). But while making a strategy, some questions must be included in your strategies. First of all, what kind of customer problems does your product or service solve? Or how does your product or service help the customer? These are some of the questions that you should find answers to first.
Know Your Customer: It is most important to know the pulse of the customer. If you do not know your customer, then believe me, no number of strategies can save your business model from getting on the ground. Knowing the language of the customer and his interest is also very important for your business. So, identify the customer and prepare your strategies accordingly.
Give training to the team: Your team plays an important role in taking the business to a higher level. The backbone of any business is a team of good employees. Therefore, in order to increase the sales of the business, you will also have to give continuous training to your team. Each of your employees should know about your product or service in detail. If you bring a new product or service for the customer, then it is important to give detailed information about that product to your team as well. All these things will definitely help in increasing your sales.
A target market is a group of people with certain shared characteristics that a company has identified as potential customers for its products. Target market identification informs the decision-making process as a company designs, packages and markets its product.
Target markets can be broadly classified on the basis of age range, location, income and lifestyle. Many other demographics can be considered. The stage of their life, their hobbies, interests, and career can all be considered. In simple words, not all products can be consumed by all the customers and each product has a different set of consumers who want to buy the product. To attract a particular segment of the market, the company from time to time modifies the product accordingly. Creating a target market involves conceptualizing the product, understanding the need for the product in the market, studying its target audience, etc. Target marketing will revolve around deploying marketing techniques to a particular segment of the markets which can be the key to attract new customers, expand the business. To expand distribution network to widen the opportunity and reach across geographies.
It is a group of people with certain shared characteristics that a company has identified as potential customers for its products. Target market identification informs the decision-making process as a company designs, packages and markets its product. A target market can be broadly classified on the basis of age range, location, income and lifestyle. Many other demographics can be considered. The stage of their life, their hobbies, interests, and career can all be considered.
In simple words, not all products can be consumed by all the customers and each product has a different set of consumers who want to buy the product. To attract a particular segment of the market, the company from time to time modifies the product accordingly. Creating a target market involves conceptualizing the product, understanding the need for the product in the market, studying its target audience, etc. Target marketing will revolve around deploying marketing techniques to a particular segment of the markets which can be the key to attract new customers, expand the business. To expand distribution network to widen the opportunity and reach across geographies.
In order to be in the market in the long run you need to target your market so you can get a group of potential customers that you identify to sell products or services to and keep on flow. Each group can be divided into smaller segments. Segments are generally grouped on the basis of age, location, income and lifestyle.
Setting sale’s goals
Establishing clear and measurable sales goals
Sales are a main part of every business. To have the best sales possible you have to keep your salespeople working well. A good way of maximizing your teams sales potential is to set goals for the team and for individuals.
Goals help leaders to transmit to the rest of the team, what is expected from them, so that there everyone is in the same page. If everyone hits their goal, you can assume that the company is ongoing on the writhe direction. Goals increase productivity, as when a salesperson has a goal, they know that is what they should be focused on, making them avoid spending to much time in tasks that are not bringing the closer to achieving their goal, if the salesperson is not sure what to do, they can think of the goal and what could help them to work towards it. Goals are a great motivator, even more if tied with rewards that can come in various ways like bonuses, promotions or acknowledgement of the good work. The goals are a good way to evaluate the salesperson’s performance as it is quantitative, so you can keep track on it. If a seller is motivated to overcome their challenges and meet their goals, they will be more open to innovate as they want to superette their difficulties. Even if the goal is not meet, it is a great learning opportunity as you can see how close where you of achieving it and what did you miss, and what should you have done better to conquer it.
There are a lot of different ways of setting sales goals, for different individual and teams. There is the most regular goal that is focused on the number of sales closed or the biggest sale in quantity, encouraging salespeople to try to close a lot of sales or close fewer ones but bigger in size. Also the goal can be a percentual one, as in that way you can focus the goal on the improvement of each employee and in this way the new salespeople don’t have to compete with the veterans. To encourage teamwork and cooperations you can set a goal for the whole team, increasing mutual accountability and diminishing the stress put in each individual. Do not hesitate on adjusting your team´s goals if some unpredictable event happens as for example an recession, as it is important for the goal to be achievable to keep the team motivated. (Jaureguy, 2022)
A sales forecast is an estimation of future sales for a specific period based on industry averages, historical data, market trends, current state of sales pipeline and other relevant data. Many companies have inaccurate sales forecasts as they are not based on numbers like previous sales, season, historical industry averages and economic situation and are instead based on intuition and personal knowledge. A proper sales forecast can be of great benefit for a leader, as it can help them to set goals for sales for individuals and for the team, as it predicts how much should each person sale and the whole team, also it helps to budget for example marketing campaigns as the forecast can predict an increase for sales opportunity in the end of the year, or even the whole companies cash flow, as if the forecast predicts a slow down in sales, the company can already prepare before hand for it.
Here is a five step sales forecast method for a data-driven prediction.
Step1- What are you trying to achieve with this forecast. Different companies have different goals for their forecasting, a older company may want to set targets for a specific product, while a startup wants to demonstrate new sales for possible investors.
Step2- How did your sales look in the last year. The easiest way to start forecasting is to assume that your growth rate will remain the same. But factors as market conditions and time of the year can have a huge affect in the reality, so you will have to adjust your forecast.
Step3- Select a sales forecasting methodology, there are a few different ones, and it is important that the one that you chose fits well with your company and with what do you want to archive with this forecast.
Step4- Do the forecast, leaders will ask salespeople to do their personal forecasts, and after taking them all, the leaders can make their own for the whole team basing it on the individuals.
Step5- Monitor the accuracy of you forecast, track the forecast in relation to the actual numbers and evaluate its accuracy over time, take note of where they differ, and after comparing them take the discrepancies into notice and try to make a better job in the next forecast. (Zalani, 2023)
Aligning sales goals with the overall business objectives
Aligning sales goals with business goals is crucial for a company´s long term success. To achieve this, every short-term goal must contribute to the larger long-term objective, and the company must have a well-planned strategy to prevent devastating short-term sacrifices. This can be achieved by understanding the core offering, using data to identify patterns, aligning individual goals with the company´s goals, learning from losses, and effectively communicating the company´s culture. By implementing these strategies, a company can maintain focus and ensure that every action contributes towards achieving its long-term goals. (Expert Panel, 2020)
Developing Sales Tactics
Designing a sales funnel to guide the customer journey
A sales funnel is a strategic framework used by marketing and sales teams to convert potential buyers into customers. It involves a series of stages that the customer goes throw from the initial stage pf awareness to the final stage of retention. There are six stages in the sales funnel, awareness, interest, evaluation, engagement, action and retention. For a successful sales funnel, companies have to understand where their prospects are in the customer journey. The sales funnel will help to personalize the sales strategy and build lasting relationships with the customers.
Awareness. In the first stage of the sales funnel is where the business makes its prospect aware of its existence, this can be done by various number of different methods like for example advertisement, cold calling, or word of mouth. It is important to know who your ideal customer is, as the chances of them buying is bigger than some random person and like that you know who to focus your efforts on.
Interest. In this second stage is where the potential customer shows interest on what you have to offer, and this is when the business should thrive to create a positive customer experience.
Evaluation. In the third stage of the sales funnel is when the salesperson asks the lead some qualifying questions to see if the product/service would be a good fit with the potential customer, and if the funnel hasn’t worked and the lead is not a fit, it is the salesperson´s job to let the lead know it.
Engagement. The fourth stage is when the lead is provided with more information about the product/service so that they can make an informed purchasing decision.
Action. In the fifth stage is when the lead takes action and makes the purchase.
Retention. In this final stage of the sales funnel, the business is going to focus its efforts on trying to build a lasting relation with the customer, throw great customer service, special offers, and personalized service.
Having a sales funnel helps to provide a better customer journey, understand the customers better and build lasting relationships whit the customers. It is important to understand at which stage the prospects are in the customer journey, so that an effective sales funnel can be created. The better the sales funnel, the easier to close the sale. Following the six stages and personalizing the experience to each prospect, businesses can convert more leads into sales, increasing their conversion rates. (Rensburg, 2022)
Effective value proposition
An effective value proposition is very important for any business, as it makes it clear what need their product/service fulfills and how it differentiates from their competitors. The value proposition is a statement that communicates what your business does and how it stands out in comparison to its competition. When creating a value proposition is important to include what benefits customers can expect by choosing your product/service over your competitors. (Cote, 2020)
The “jobs to be done” is a great way of understanding value proposition. This theory emphasizes that customers “hire” products/services to fulfill specific needs, rather than just buying them based on features or attributes. By knowing what the need of the customer is, the company can create a value proposition that addresses that need in a unique way. (Christenses, 2023)
To create a clear value proposition, the company should think about what they are offering, what job the customer is hiring them to do, who the competitors are, and what sets them apart. The value proposition should be short and easily understandable. A well-done value proposition can help customers, investors, and other stakeholders to remember the brands’ value and what it offers. And it can be used on the company´s website, on sales pitches, or while answering to people about what you company do.
Implementing and Measuring Sales Performance
Analyzing sales performance data to identify strengths and weaknesses
Analyzing sales performance data is crucial for businesses to identify their strengths and weaknesses in order to improve their performance and increase revenue. Sales data can provide insights into a company’s sales patterns, customer behavior, and market trends, allowing businesses to make informed decisions and strategic changes. In this part of the essay discusses about the importance of analyzing sales performance data and how it can be used to identify strengths and weaknesses.
One of the main benefits of analyzing sales performance data is that it enables businesses to identify their strengths. By analyzing sales data, companies can determine which products or services are performing well, which sales channels are effective, and which customer segments are most profitable. This information can be used to optimize marketing campaigns and sales strategies, and to focus on areas where the business is performing well.
For example, a company may find that its online sales are consistently higher than its in-store sales. This indicates that the company’s online marketing strategy is effective, and it may be beneficial to invest more resources into this area. Similarly, a business may discover that a particular product or service is selling exceptionally well, indicating a strength in that area.
In addition to identifying strengths, analyzing sales performance data can also help businesses to identify their weaknesses. By examining sales data, companies can identify areas where they are underperforming, such as low conversion rates or declining sales in a particular product or service. This information can be used to develop strategies to address these weaknesses and improve overall performance.
For instance, a company may find that its sales are declining in a particular region. By examining the data, the business may discover that local competitors have started offering a similar product at a lower price. Armed with this knowledge, the company can develop a pricing strategy to remain competitive in that market.
Based on this information, businesses can adjust their sales strategy by targeting their most profitable customers, optimizing their sales channels, and offering products or services that meet customer needs. (Grant 2016)
So from where to start?
First of all, everything in sales analysis process starts by setting clear objectives. This involves defining the specific questions you want to answer with the data and the areas of the sales process that need improvement. Clear objectives enable businesses to identify the key areas to focus on and ensure that their analysis is targeted and effective. Once clear objectives have been set, collecting relevant data is crucial to performing a thorough analysis. Collecting data on customer demographics, sales activities, conversion rates that how many users completed the desired action (e.g clicked on an ad) and revenue. This data can help identify trends and patterns in sales performance and provide insights into customer behavior, buying habits, and preferences. (Nielsen 2013)
Using data visualization tools like graphs, charts, and tables can help identify patterns and trends in sales data. These tools also aid in communicating findings effectively to relevant stakeholders. Visualization of data makes it easy to interpret the information and helps in spotting anomalies or opportunities. (Efti 2023)
Sales performance metrics or key performance indicators (KPIs) like conversion rates, average deal size, and sales cycle length can help identify areas of improvement in the sales process. It is important to keep track of trends and to measure performance against benchmarks to ensure that the analysis remains accurate. (Efti 2023)
Identifying areas for improvement is an essential part of sales analysis. For instance, if conversion rates are low, the lead nurturing process (process of cultivating leads that are not yet ready to buy) or sales messaging (How the company pitches their product to the customer) can be improved to increase conversion rates. Once the areas for improvement have been identified, it is important to prioritize them based on their potential impact on sales performance. (Oracle, n.d)
By analyzing sales data, businesses can make data-driven decisions to improve their sales performance and achieve their objectives. The process of analyzing sales data is not a one-time event. It needs to be done regularly to keep up with changing market conditions and customer behavior.
In conclusion, analyzing sales performance data is crucial for businesses to identify their strengths and weaknesses. By examining sales data, companies can determine which products or services are performing well, which sales channels are effective, and which customer segments are most profitable. This information can be used to optimize marketing campaigns and sales strategies, and to address areas where the business is underperforming. Ultimately, businesses that make data-driven decisions are better equipped to compete and succeed in today’s dynamic marketplace. (Efti 2023)
Well-designed sales strategy is a crucial element for any business that seeks to achieve its goals and maximize its revenue. It helps to identify and target potential customers, optimize sales processes, and build long-term customer relationships. A strong sales strategy enables businesses to stay ahead of their competitors by providing a clear understanding of the market and identifying opportunities for growth. Moreover, it helps to ensure that sales teams are organized, motivated, and equipped with the right tools to close deals effectively. Therefore, it is vital for businesses to invest time and effort in developing a strong sales strategy that aligns with their goals and objectives. A strong sales strategy is not only beneficial for the short term but also for the long-term success of a business.
This essay was partly done by using ChatGPT as an research tool. It gathered data from multible websites what we combined together. The main sources are shown as intext references and in the reference’s list. Since ChatGPT is only using data that was created before 2021, the biggest issue with this tool was the lack of working sources. Everything needed to be double checked from accessible articles and websites so in the end it took a lot of time.
ChatGPT, personal communication, 2023.
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