S9 - SALES STRATEGY Flashcards
(14 cards)
What are the main takeaways of How to Sell New Products by Thomas Steenburgh and Michael Ahearne?
- Long-term vision
- Success in selling new products requires patience and a focus on building relationships and learning—not just hitting short-term sales targets. - Switching cost vs features
- Even if a new product has better features, clients weigh the risks and disruptions of switching heavily. Sales efforts must address those perceived costs. - Adaptability beyond requirements to internal organization
- Salespeople must understand not just client needs, but how the product fits within their internal structures, processes, and politics.
What are companies’ most important strategic challenges?
- growth
- expansion of revenue
- increase market shares with new customers
What are 4 strategic options to achieve growth?
- Market Penetration
- existing markets and existing products - Market development
- new markets and existing products - Product Development
- existing markets and new products - Diversification
- new markets & new products
What are the basics of strategies? What is important about them?
- Company purpose
- mission, vision, values - Business plan
- objectives, resources, resource distribution, areas of development - Deployment strategies for each of the main functions
- marketing, DA and sales, IT, HR, etc.
They must be aligned and big picture oriented: Consistency, relevance and links between sales and other departments are essential.
When corporate strategy includes co-creating value with customers:
- Strong link with marketing
- Creation of multidisciplinary teams (people with different specialties)
What are different sales strategies?
- Customer segmentation
- Development of a customer typology (that allows for the identification of individual customers within each target market) - Customer prioritization & targeting
- Ranking of customers according to their economic or strategic value to the firm and allocating selling efforts and resources them - Relationship Objectives & Selling Model
- Using different relationship objectives and selling models (from pure transactional exchanges to collaborative exchanges) to reach customers - Use of Multiple Sales Channels
- Systematic usage of multiple sales channels (ex.: sales force, distributors, internet) to conduct the sales, distribution, and service activites
What needs to be aligned for success?
- Target customers/segment
- Capabilities and resources
- Offering
What must firms take into account when organizing the sales effort? 2 types of organization?
Chaos and bottlenecks (trafic jams)!
- Horizontal organization divides selling activities among the sales force
- Vertical organization assigns authority for specific sales management activities
What are the pros and cons of a larger span of control?
Pros
- Greater control / responsiveness due to fewer management layers
- Lower admin cost
Cons
- Reduced one-to-one communication due to larger number of subordinates
- Management may be less effective, negating cost savings
What does proper sales planning do?
- Leads to good sales forecasts
- Helps to establish meaningful sales quota
What are subjective vs objective forecasting methods?
Subjective methods:
- User expectation
- Sales force composite
- Jury of executive opinion
- Delphi technique
Objective methods:
- Market Test
- Time-series analysis (moving averages, exponential smoothing, decomposition)
- Statistical demand analysis
What to consider when choosing a forecasting methods?
- No methods remains superior under all conditions
- Apply multiple forecasting methods to a problem
- Scenario planning prepares “what-if” questions and produces possible outcomes
What are sales quota?
- Goals assigned to salespeople
- Apply to specific periods
- Tool for planning and controlling field selling activities and results
- Benchmark for evaluating sales effectiveness
They help manager plan and should motivate salespeople (incentives).
Evaluate salespeople’s performance.
How to create a reasonable quota? What are aspects to consider?
Good quota characteristics
- Attainable
- Easy to understand
- Complete
- Timely
Process for setting quotas
- Identify types of quota to be used
- Select level of each type of quota (sales volume, activity, or financial)
Quota level considerations
- Territory available potential
- Quota’s impact on motivation
- Long-term company objectives
- Short-term profitability impact
What are the three main takeaways on how psychological resourcefulness increases performance?
- Psychological resourcefulness boosts sales
- Optimism and resilience enhance customer-oriented behaviors, which in turn improve sales performance and customer satisfaction - Customer orientation is key
- Salespeople who focus on understanding and addressing customer needs perform better and build stronger relationships - Resilience and optimism can be trained or hired
- Since these traits can be developed or assessed during recruitment, managers can proactively build stronger sales teams
