Every head of sales asks this question: Is my sales strategy a problem? If you are exceeding your revenue growth number each year, then the short answer is no. But if you have inconsistent revenue growth, then you probably need a modification.
Let’s first define what a sales strategy is. A sales strategy is the operating plan for your sales force. It defines what you do; how you do it; and whom you do it with to make your number. It covers three major areas: sales planning, engagement, and sales support.
A sales strategy focuses primarily on sales execution. That’s why it must be part of a common Revenue Growth Methodology that looks across the corporate, product, and marketing strategies to sustain aggressive revenue growth. This is where the best executives blend strategy and execution masterfully. Is Your Sales Strategy a Problem? Could be. Here are common warning signs:
- Your industry or competitors are growing faster than you are.
- You have received a sizeable increase in your annual number without a head count increase.
- Traditional routes to market are not as effective as they used to be.
- Revenue performance varies greatly from representative to representative and from region to region. If you see one or more of these issues in your business, it might be wise to take a fresh look at your sales strategy.
It’s difficult to grow revenue faster than your industry’s growth rate and faster than your competitors. Leverage the How to Make Your Number in 2018 to access a revenue growth methodology to hit your number quarter after quarter, and year after year.
What Is the Solution to a Sales Strategy Problem?
It is important to start by framing your problem correctly and challenging your current assumptions. That approach will help determine whether you need to make modifications to your current sales strategy or improve execution. The following framework will help you make this distinction. It encompasses three steps that define your sales strategy, including respective phases within each step.
Step 1: Sales Planning
Sales planning is composed of three phases: markets, accounts, and buyers.
Phase 1: Markets.
Know the playing field completely. Growing revenues is difficult, and your intuition will not be enough. Instead, you must have a deep understanding of where your growth is coming from in order to make informed resource decisions.
Phase 2: Accounts.
Determine which accounts are going to spend this year and which are not. All accounts are not created equally. If you cannot rank your accounts from best to worst based on revenue potential and propensity to buy, you will miss your number.
Phase 3: Buyers.
Understand how executives make purchase decisions. Buyers are changing constantly. Ultimately, failure to understand how executives are buying will prevent you from growing revenue.
Step 2: Engagement
Engagement is composed of eight phases: prospecting, sales process, organizational design, people plan, channel optimization, territory alignment, quota setting, and compensation planning.
Phase 1: Prospecting.
Fill the funnel with real sales opportunities. Your reps need to generate roughly 70 percent of sales opportunities. The pipeline varies too much from one representative to the next when there is no standard prospecting process.
Phase 2: Sales process.
Win more big deals, faster. One-size-fits-all sales methodologies do not work. A custom sales process will increase deal sizes, improve win rates, and shorten sales cycles.
Phase 3: Organizational design.
Dive into determining the right number, and what type of sales representatives you need to make that number. Too few reps will cause you to miss the number. Too many reps will destroy profits.
Phase 4: People plan.
People are critical to any sales strategy. “A-Player” sales representatives typically generate five times more revenue than “B-Players” and 10 times more revenue than “C-Players.” Recruiting, developing, and retaining great people mean you no longer have to rely on the heroic efforts of a select few.
Phase 5: Channel optimization.
Cover the market completely with direct and indirect sales channels. Consider coverage model decisions carefully—they have never been this complicated, now that we live in the omni-channel era.
Phase 6: Territory alignment.
Grow revenues through territory alignment that balances customer requirements, revenue expectations, and sales representative workloads.
Phase 7: Quota Setting.
Link the company objective to sales representative targets.
Phase 8: Compensation planning.
Incentivize the sales team with compensation plans that get you to your revenue goal.
Step 3: Sales Support
Sales support comprises four phases: sales operations, sales enablement, systems, and back-office support.
Phase 1: Sales operations.
Improves the efficiency of the sales team. Too often, the sales operations team gets assigned all the work no one else wants. Instead, sales operations must be the most strategic sales function in the company. You’ll miss your revenue goal if you are starving this key department.
Phase 2: Sales enablement.
It’s all about effectiveness. Drive revenue per sales head up and time to productivity for new sales hires down.
Phase 3: Systems.
Improve productivity rates of your sales teams with the right systems support (customer relationship management, marketing automation, and so forth).
Phase 4: Back-office support.
Don’t skimp on back-office support that allows your company to be easy to buy from and sell for.
We have looked at different areas and components of a sales strategy. Now it’s time for you to dive in. Our 10th annual workbook, How to Make Your Number in 2017 . . . and Every Year Thereafter, provides a comprehensive set of questions to keep your sales strategy discussions on track.
Go through the questions in each area and phase of the sales strategy by market segment, product, and sales channel. Each question is categorized as an emerging best practice, best practice, or standard operating procedure. Your ability to answer those questions will indicate where your sales strategy lies on this scale. Remember, only 10 percent of sales organizations have emerging best practices in play. But those sales teams grow faster than their industry and their competitors.
Have expectations gone up and left you wondering if you can make your number? Here is an interactive tool that will help you understand if you have a chance at success. Take the Revenue Growth Diagnostic test and rate yourself against SBI’s sales and marketing strategy to find out if:
- Your revenue goal is realistic
- You will earn your bonus
- You will keep your job
Make Your Number in 2017 - Special Strategic Planning Issue
Discover how the world’s top sales and marketing leaders meet aggressive revenue growth goals using our 10th annual workbook.