An effective sales strategy will help your business drive revenue while protecting your margins. The four essential components for an effective sales strategy are: revenue targets, industries to pursue, a value proposition, and capable salespeople.
What Is a Sales Strategy?
A sales strategy is a documented plan for positioning and selling a company’s offerings to qualified buyers in a unique way. Qualified buyers are individuals who fit the company’s ideal customer profile.
|Components of a sales strategy|
|Industries to pursue|
|Hiring effective sales talent|
The purpose of a sales strategy is to provide guidelines that define and target sales efforts more effectively. These guidelines are essential for communicating goals and ensuring all salespeople are aligned.
Establishing Revenue Targets
Target revenue refers to the amount of revenue a company wants to hit in a particular period. This is necessary for businesses to produce a budget and accurate forecasts. Revenue targets are calculated based on the profit needed to pursue other opportunities and expand. Revenue targets can be broken down into short-term goals in the form of sales targets.
A sales target is a goal decision-makers set to achieve within a specific time: monthly, quarterly, or annually. Here are the steps on how to define your sales target:
Step #1: Assess Your Close Rate
Look at your company’s current close rate for leads. This will provide you with a good starting point to determine what your sales target should be. To find your close rate, gather the following data:
- Number of leads gathered for the whole year
- Number of leads converted into customers
Once you have these numbers, divide the amount of converted leads by the number of leads gathered for the whole year. The quotient is your close rate.
Step #2: Forecast the Figures You Have To Hit
Your company’s executive team should provide your sales reps with sales figures needed to meet the company’s budget and quota. If they tell you your monthly sales target is 10 closed deals instead of the previous year’s seven, that means you have to increase the number of leads for a higher chance of converting more of them.
Identify Industries To Pursue
A strong market position makes it easier to sell your products and services. To do this, companies must focus on customers who will benefit from their products instead of marketing to everyone. Doing this is more cost-effective because people who benefit from your product are more likely to make a purchase.
You’ll need to work closely with your marketing team when developing a sales strategy because it’s crucial to know your current market position. You can determine your position by conducting a market analysis.
A market analysis is an extensive assessment of a specific industry’s market. It offers you vital insights on:
- Market dynamics
- Potential customer segments
- Buying patterns
Market analysis is simple, but it requires extensive research. While this can be time-consuming, it also offers the information necessary for creating an effective sales strategy. These are the steps to conduct a market analysis:
Step #1: Research the Current State of the Industry
Create a detailed outline of your industry’s current state. Identify relevant data using metrics such as projected growth, trends, and size.
You can also consider running a comparative market analysis. This will help you determine your competitive advantage in your industry.
Step #2: Identify Your Target Customer
Knowing your customers will help you streamline your sales strategy, saving you time by targeting leads with a higher chance of converting. Your market analysis must be able to answer the following questions about your ideal customers:
- Who are they?
- Where do these customers come from?
- What are the factors that influence their buying decisions?
- What are their pain points?
Once you’ve gathered all the data that answers these questions, you should use the results to create a buyer persona. This will serve as a model for your ideal customer when developing a sales strategy.
Step #3: Check the Competition
Checking your competition allows you to reproduce best practices and learn from mistakes. During your market analysis, pay attention to the following aspects of your competitors:
- Market saturation
It’s also helpful to conduct a periodic SWOT analysis of your most threatening competitors. This measurement identifies a company’s internal and external strengths, weaknesses, opportunities, and threats, which show you what to be aware of for your own business.
Step #4: Gather Other Relevant Data
Data collection is a continuous effort. You’ll always have more to learn about the market, your customers, and your competition; so it’s highly recommended to obtain your data and numbers from a reputable source such as:
- The United States Census Bureau
- The Bureau of Labor Statistics
- Trade journals
- Research firms such as Gartner
Your market surveys, questionnaires, and SWOT analyses are also reputable resources.
Step #5: Analyze and Integrate the Data Into Your Sales Strategy
After collecting all the necessary information and verifying its accuracy, you need to analyze the data. You could have tons of information at this point, so it’s recommended you organize it into categories. This will make it easier to understand what the data and numbers say.
Once you’ve translated the data and analysis from your research, put it to work in your sales strategy. Use the information you’ve gathered to create a sales approach tailored to your buyer persona. This increases the chances of closing more sales.
Create Value Proposition
A sales strategy must include a value proposition. This is a concise statement summarizing the benefits of your products and service.
|Communicates benefits||Improves customer understanding|
|Convinces customers to choose your offerings||Develops long-term relationships with customers|
|Attracts interest||Boosts conversion rates|
An effective value proposition resonates with your target customer. It should answer the following questions:
- What is the main problem that your company solves?
- What are the benefits that you offer?
- How is your solution different from other companies?
Once you have answers to these questions, it’s easy to create a statement that showcases how your solutions benefit your target customers in a unique way.
One of the common pitfalls when creating a value proposition is that the statements are more focused on the features of the products and services instead of the benefits. Although there are cases when features are the benefits, what should be highlighted in the value proposition are the benefits that your company has to offer. By doing this, you are showing readers the results that they will get from buying your offerings.
It’s also highly recommended for you to include measurable proof in your value proposition. This will serve as an evidence to your problem-solution claims. You can include measurable proof in your value proposition by mentioning statistics, case studies, or testimonials.
Lastly, your value proposition must be short and concise. Its main purpose is to give the impression that you have the solutions that your target customers are looking for. It should capture their interest to want to learn more about your offerings.
Hire Capable Salespeople
A sales strategy needs the right people to put it into action and drive success. The right team will also ensure that the tasks are done properly and accurately so that you’ll stay on track with your goals and deadlines.
When hiring a salesperson, pay attention to more than experience and skill set. Since it’s a demanding job, it’s important to take a closer look at their innate traits. The ideal salesperson should have:
- Active listening
Your sales strategy should also include indicators for when to hire more salespeople. These criteria may include:
- An overwhelming workload for existing employees
- Progress from initial sales hires
- Projected growth
Use data such as employee’s Key Performance Indicators (KPIs) when making hiring decisions. This report will tell you whether your employees are struggling with their workload. You could also use your company’s sales playbook. If you are planning on expanding your operations, that would mean more work is about to come in and you’ll need more people.
Hiring capable salespeople is also cost-effective. With a 27% turnover rate, a bad hire can significantly increase the expenses of the company without getting anything in return.
A bad hire also means that you have to wait for a replacement which could take months. During this time, the other team members will need to take on more tasks which can affect their performance quality and overall efficiency.
Tips To Develop a Stellar Sales Strategy
Every business is unique, so there’s no template sales strategy; you’ll have to craft one that fits your company. The most challenging step is determining where to start. To help you begin, here are some useful tips on how to develop a sales strategy.
Set Clear Goals and a Timeline
An effective sales strategy starts with clear goals. Use the SMART framework to help:
Be as detailed as possible about your desired outcomes since they’ll serve as a guideline for your sales efforts. Identify your long-term and short-term goals and what sales initiatives you need to achieve them.
Clear goals are measurable, so you have to define metrics for them. These will tell you whether you’ve achieved your objectives or missed the mark. On an intrinsic level, achieving or exceeding metrics can motivate your sales team to continue to perform well.
An overly ambitious goal is guaranteed to result in disappointment and cause your sales team to burn out. It’s good to push yourself, but make sure the goal remains attainable.
Your goals must also follow a clearly defined timeline. Establish starting and target dates. When you set a target date, give your sales team breathing room to reduce stress and encourage top-notch performance.
The research involved in developing a sales strategy must go beyond market and SWOT analysis. Conduct internal research about your sales process and determine which aspects to improve.
After collecting the necessary data, update it constantly to adapt to fluctuating markets, trends, and customer preferences. It’s best to schedule a period of research for these topics.
Review Your Sales Process
Some sales strategies are too focused on external factors and neglect the organization’s internal processes. To avoid this oversight, you have to review your sales process when developing a sales strategy.
Determine if your goals are realistic given your current sales process. The insights gained from this will reveal if you need to change the internal processes or add tools that will boost productivity and efficiency in your sales department.
It’s not necessary to follow your sales strategy to the letter. You might encounter new data along the way, or the market you’re targeting may adopt a different trend, forcing you to adjust. Make changes based on the new data you receive to achieve your revenue goals.
Do you need help creating a demand generation playbook that resonates with your sales strategy? SalesRoads is here to help. Our team of professional SDRs will help you grow your revenue through data-driven sales development efforts. Contact us today and welcome new opportunities.