When done right, a sales strategy is the driving force that keeps your sales team on track for success.
Surpassing your sales targets doesn’t happen by accident. It happens when you’ve strategically targeted your ideal customers and perfected the messaging of your product or service. Without an effective sales strategy, you risk missing sales targets and losing valuable team members because of overall disjointed sales processes.
My approach to building an effective sales strategy wasn’t built randomly. I’ve been developing my sales training and helping companies fix their sales strategies for many years, and I found one thing in common with all successful sales teams. When salespeople are aligned on a solid sales strategy and stick to strategic ongoing sales practices, that’s when I’ve seen the most success.
The 7 Essential Steps to Building An Effective Sales Strategy
One of the most important decisions a sales leader needs to determine their company's overall sales strategy. Without an overarching strategy, any go-to-market plan will not be nearly as effective, inhibiting your results when different salespeople choose different and conflicting strategies.
There are a few critical metrics you need before starting a new sales strategy. The first metric you need is your revenue and profitability goals. Your strategy has to deliver these goals. You must also have a number that represents the average deal size that would allow you to reach those goals. It's also critical that you have metrics on the total addressable market, ensuring your strategy will ensure you can reach your goals.
During my time working with sales leaders, I have found that most companies have not communicated their primary go-to-market strategy, leaving the sales force without the direction they need, and making the processes and methodologies less valuable, especially when they conflict with what the company wants.
When a new client comes through my Sales Accelerator program, the first thing I check on is if they have a sales strategy. Most have not been provided with the choice of the three basic strategies of "lowest price," "best product," or "customer intimacy."
Let’s break down the seven essential steps you need to build an effective sales strategy today, so you can bring in more revenue.
Evaluate Your Overall Goals
Creating realistic goals based on accurate data is crucial for starting your strategy off strong. This should include revenue projections based on your team’s capabilities, recurring revenue, new service launches, pricing considerations, etc., anything that would affect your end-of-year goals.
Look at any Salesforce.com, and you will find a dashboard of metrics, all useful. However, there are a few metrics you have to monitor and manage that are more important than most others. The first metric you need is your revenue and/or profit projections. These goals allow you to measure weekly results against your plan.
The formula for growth is simple: Recurring Revenue - Churn (lost revenue) + New revenue. You will want to manage these metrics to gain clarity on the effectiveness of your strategy and your team. To make this exercise easy, you need to capture the number and value of new opportunities. Some of these opportunities will come from acquiring new clients, and some will be generated by selling more to your existing clients.
Another critical sales metric is your overall win rate and each individual's win rate. This is a measure of your success, but it is also a way to gauge your team's overall effectiveness.
The final metric is the sales cycle time. A lot of sales organizations spend too much time trying to compress the sales cycle, something that might have made sense at a different time. No matter your strategy, it's more important to win new opportunities than to do it a week or two earlier. Salespeople who try to speed up the process lose deals by going faster than their clients can make decisions. The sales cycle mostly provides an understanding of how many opportunities you can obtain in a certain period.
Refine Your Demographic Targeting
One factor that contributes to any successful sales strategy is an understanding of the buyer's roles, responsibilities, their problems and challenges, and their areas that matter most to them. A well-developed buyer persona allows the sales force to have a better understanding of their prospective client, and the areas where they are likely to need help with some important result.
There are still more sales organizations that operate with no real targeting, wasting their time and energy on people and companies that don't need what they buy. Providing a buyer's persona with titles, areas of concern, and the challenges that harm their results helps to make the salesperson instantly relevant and credible, without having to use a tired, outdated sales approach with the salesperson talking about their company in early conversations.
Any help from marketing should be directed at speaking directly to the targeted buyer's personas, helping them to understand why they need to change and how they can achieve the strategic outcomes they create.
Complete Competitive Analyses
More often than not, you will find your team competing for a client's business. Your strategy needs to include direction on how to win these contests, especially the ones where losing means you are not likely to compete for the client's business for several years. While approaches like SWOT (strengths, weaknesses, opportunities, and threats) and Michael Porter's Five Forces and PESTLE can all help you better understand your client, the best way to do a competitive analysis is to look at the differentiation in your model compared to your competitor. Something we call a "differentiation chart."
Four primary categories companies use to create value for their clients and customers. The first is a transactional approach that provides the lowest price, a strategy designed to remove price as an obstacle, but one that makes it impossible to provide the level of service and outcome companies need. The second category is scaled commodity, where the company scales and provides better service and support, charging more to increase the value they create.
The third approach is a solution sale, where the sales organization competes and differentiates on their ability to solve a problem and provide a tangible result. The higher price that accompanies this model allows the company to deliver on their promises. The fourth and final model creates the greatest value and comes with the highest price, the key to delivering greater value.
Each of these business models has advantages and challenges. One key to an effective sales strategy is competing against the other models, the best and most effective way to differentiate your company and your approach from your competition within the sales motion.
Analyze Your Lead Sources
There are a number of considerations in your sales strategy about how to identify, nurture, and pursue your prospective clients and customers. Let's start with the idea of targets and leads. Depending on your sales strategy, you may select the targeted accounts you need your sales force to pursue. Other sales strategies benefit from having a steady flow of leads.
Your sales strategy needs to provide targets or leads or both. Your plan needs to include a method and sources that provide leads. However, all leads are not equal; some leads are much better than others. It's difficult to determine the value of a lead when it comes in through a form on your website. One decision you need to address as part of your overall strategy as to how to manage the leads.
It is a mistake to spend the time and effort acquiring leads if no one follows up on the lead. Once you invest to acquire a lead, that investment is wasted if no one determines where the lead is in their buying decision.
Nail Your Messaging
When developing your overall sales strategy, the one thing often overlooked is how the sales force talks to their prospective clients. From our view, the sales force should be armed with language and an approach that helps the client recognize why they need to change now. They also need to know how to position your company and your model from your competition, differentiating themselves, the company, and the unique way you improve your client's results.
It's important to your results that your sales team is able to communicate effectively as they speak to your prospective clients. It's also important that their language choices prove that they are other-oriented, focused on helping their prospects and clients improve their results. When all the salesperson has to work with is conversations, it's important that their strategy includes the most effective language.
Align On Project Management & Sales Software
Without accurate sales numbers and alignment on sales processes, it’s impossible to precisely plan for future revenue projections and make informed investment decisions; to do this, all of your data should be easily accessible and accurate.
Both sales leaders and salespeople complain about the CRM. Leaders want and need more information, and salespeople believe the CRM is big brother. The CRM is the one source of truth for an organization, and it is also a competitive advantage for the sales force, provided you do a couple of things.
The record of an opportunity and its pursuit is important. However, it isn't as important as the actual pursuit. Your approach to getting everyone on the same page is to use a "minimum viable usage" approach to the CRM. It's less important that the sales force logs each call and more important that track the important conversations that will be important later. Every opportunity and its history needs to be kept up-to-date.
What makes a CRM more valuable for the sales force is capturing several things that provide them with insights. For example, a field that provides a pull-down list of the compelling reason a client is considering change matched up with a field that tracks the competitor provides the salesperson an idea about where their competitors are struggling, allowing them to target that competitor's clients.
Improving compliance here allows you to track your team's performance, troubleshooting problems and challenges. You can't measure your results without accurate data.
Plan For Ongoing Training
No matter what your sales strategy provides, it's important that your continually increase your team's overall effectiveness. While the sales world continues to seek technological solutions to the challenges of selling, those who understand the variables understand that the effectiveness is much more important than efficiency.
Each individual on your team needs a development plan that allows their sales manager to provide them with a personal development plan and the coaching necessary to executing the sales strategy.
Craft Your Sales Strategy With the Sales Accelerator
Much of the time, when a sales organization has a well-developed sales strategy that doesn't provide the results they need, they believe the strategy is lacking. Invariably, the strategy is fine, but the execution is poor. One way the sales organization recognizes something is amiss is when a salesperson works against the strategy, like trying to compete on price when the company's strategy is built on customer intimacy or best product.
The gap we often find is that the salesperson hasn't been taught how to understand and execute the strategy. But what prevents them from executing the sales strategy is that they lack the language to rightly converse with the right people. The good strategy needs to be executed with good language and a playbook.