Are you vertical, horizontal, or something else?

In the book “The Discipline of Market Leaders”, written just over 20 years ago by Michael Treacy and Fred Wiersema where they looked at competitive business strategies, the overarching conclusion was that a business needed to;

Choose your Customers, Narrow your focus and then Dominate your market.

A key reason for doing this is to make best use of your sales and marketing resources.  This requires a focus around a well-defined market or in most cases a logical subset of the wider market.  Deciding how best to do this is a common topic of debate with our customers and the most common dimensions considered are; vertical, horizontal, geographic and e-location.

Vertical refers to a market consisting of businesses in a particular sector where the product or service addresses issues particular to that type of business; insurance brokers, engineers, logistics companies, etc.

Horizontal applies to a market where the product or service satisfies a need that is common across a wide range of businesses regardless of sector.  For example; a software product that produces invoices, calculates vat and automatically produces the vat return would be of interest to any business.

Geographic; this model is common with; taxi companies, decorators, service engineers and in fact any business that needs to travel to get to and service its customers.  This is also a very common model with bricks and mortar retailers who know they need a physical presence in the locations where their customers will want to shop.

e-location; the arrival of the on-line environment has to some extent removed the need for a geographic dimension but the vertical and horizontal dimensions are in many cases even more important.  It is now all too easy for someone to ‘wander by’ your website; just browsing, and in the process they may trigger you to respond but if your on-line presence is too general many enquiries could be a waste of time for you.

These dimensions are important when you are planning how and where to focus your outbound sales and marketing effort but they are also important, as mentioned under “e-location”, to focus the nature and volume of in-bound enquiries that you receive.

Blending various combinations of the four dimensions is also common and this can help to further refine the focus of your efforts and a typical mix will see a geographic component with one of the others.  There are also many other parameters that can be used to further refine a target market including; business size, private rather than publicly quoted and demographics such as age, lifestyle and interests.

Matching your market strategy to your product/service

Defining a business’ marketing strategy as being ‘vertically focused’ has become very popular in recent years.  If you do actually have a vertical offering and you adopt a vertical go-to-market strategy then you and your customers will benefit hugely.  However, I see various companies that have adopted a vertical go-to-market strategy when their product or service actually provides a horizontal proposition.

I recall an example of a company that provided IT support services that considered itself to have a vertical offering for the utilities sector.  It is true that around 40% of revenue did come from contracts with utility companies and this spurred them on to approach other utility companies with the message “we are a supplier to the utility sector”.  As a result they gained an appointment with the CIO of a large electricity company and during the meeting he asked the supplier what they knew about smart metering systems.  The answer was actually very little.

It is said that perception is truth.  The CIO believed that someone claiming to have utilities experience would know about the business issues specific to a utility whereas the supplier only knew about the technical issues of the IT systems.

This example illustrates very well that doing a lot of work in a particular vertical market does not mean you have a vertical offering.

The experience the supplier had with that CIO proved to be invaluable as they re-evaluated their offering and realised they had a horizontal proposition.  Their knowledge and expertise was focused on the IT issues around processing very large volumes of batch data; they had developed experience in tuning systems to optimise performance.  Their market focus thus became any company needing to process large volumes of data; utilities, insurance companies, membership organisations and many others.

Points to consider when deciding on your go-to-market strategy

  • If your products or services directly address specific business issues of companies in a vertical sector then you have a vertical offering.  If your offering solves issues of; infrastructure, processes, systems or methods that are common in many different types of businesses, what you have is a horizontal offering.

Once you have a clear view of your proposition measured against the two dimensions of vertical and horizontal you can now overlay other parameters such as location or company size to further refine the definition of your preferred target market.

The above will feed into creating appropriate sales and marketing messages specifically aimed at your target market.  The messages can be accurately framed to appeal to the needs of your target customers and specific individuals with relevant responsibilities; financial director, production manager, HR manager, quality manager, etc.

  • Next to consider is how your proposition addresses the question “why you?”  Unless you have something truly unique your prospective customers will be able to buy it somewhere else so why would they choose you?  Although propositions are rarely unique the way a company delivers it may be and hence the ‘how’ will provide fertile ground for creating your unique proposition.

Incidentally, not many prospects will actually ask “why you” but naturally they will be thinking it so you need to ensure your sales and marketing messages proactively answer this question.

  • The previous points  help you to build a profile of the industries, business sectors and specific companies that are most likely to be interested in what you provide which in turn enables you to better focus your sales and marketing efforts.  However; what you have so far is a well formed but possibly ill informed picture as you have formulated your opinions primarily from internal reference points.

Before you can consider this part of the job as finished you need to take account of what your potential customers might think.  Unless you do this there is a risk you will be telling your prospects what you want them to hear rather than what they need to know.

To ensure you have a complete picture you need to gather external inputs from customers past and present plus a range of external stakeholders such as; your suppliers, relevant trade bodies and publications, government legislation, general media commentary and if justified specific market research.

  • The final task is the process of deciding which routes to market you will use and how they will blend together to form a complete go-to-market solution.  The previous steps will provide valuable inputs to the decisions that need to be made on the routes to market and how the mix should work to satisfy your needs for new business generation.  During the conversation with past and present customers you should ask how they actually found you and their preferences in terms of marketing environments they prefer to use when looking for products or services such as yours.

None of this is especially difficult but it can be time consuming which can be frustrating when all you want to do is get out there and make some more sales.  However, you will find this structured approach will pay you back handsomely as the key result is to make your sales, selling and marketing effort more focused which in turn will give better return in terms of conversion ratios leading to more orders won and therefore more revenue to bank.

 

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Courtesy of Microsoft & Bing

21st Century Sales – don’t let the myths stifle your success

Courtesy of Microsoft & BingThe overarching myth is that selling in the 21st century is in some significant way different to the approaches of earlier times. You only have to consider the many cold calls made to your home phone or the PPI/accident compensation texts to your mobile to realise the worst techniques of the past are still alive and kicking albeit under a different disguise.

Then there are the “new” approaches to selling that you might find under titles such as; Modern Selling, The Challenger Sale and Sales Enablement. When you explore these ‘new’ phenomena you will probably find they simply describe how professional selling has always been conducted. Current technology has certainly provided new tools but we question whether technology enables you to be more effective and productive, and if it always make doing business easier?

This post will help anyone struggling with questions such as; “is the B2B sales person a dying breed?”, “is the cold call dead?”, “what is best in 2015; in-bound or outbound marketing?”, and “can technology solve all of my marketing and sales issues?

Myth One – buyers have changed significantly

We have written on a number of occasions about the savvy well informed buyers that many consider a significant feature of the commercial landscape of the 21st century. You know them; they are 57% of the way through the buying journey before engaging with suppliers. Belief in this fact has led to a ‘self-fulfilling prophecy’; if your sales people don’t put in the effort to engage early then of course the buyer has no choice but to make the journey towards a decision on their own. When the buyer eventually needs to contact suppliers they will have made many decisions for themselves leaving the suppliers in a position that all they can do is react and comply.

However, the evidence is that sales people who do engage early in the buyer’s journey, or better still before it commences, are seen as a valuable resource to the buyer and they will get a bigger share of the business that is going to be on offer.

Debunking this myth is the foundation to dealing with the others.

Myth Two – B2B sales people are a dying breed

They certainly are if your go-to-market strategy is based on the assumption that the buyer will come to you when they are ready. In this case all you will need are good sales order clerks empowered to give discount and offer special terms to secure the business. However if you take into account the fact that 75% of the orders for new business go to companies who engage early then you need well equipped B2B sales people who will be out hunting for you if you don’t wish to be left scrapping over the remaining 25%.

To make sure you are out there fighting for all 100% of the business you need sales people who are able to engage early and ideally before the prospect even realises they have a problem to solve. Sales people need to be equipped to help the prospect through the awareness stage which includes the vital process of education; when the prospect needs to learn about the various solutions that might be appropriate.

Fresh off the press research from SiriusDecisions states that B2B buyers want to interact with sales people at every stage of the buying journey. The findings “challenge the common industry view that b-to-b sales representatives’ roles and importance are declining due to a disintermediation by digital buying behaviors.”

Myth Three – The cold call is dead!

The truth is, the cold call was never alive. What has changed is that people are now very unwilling to take unsolicited calls, which generates that feeling that the approach is dead. However, even when times were different and most people did accept unsolicited calls, they rarely produced anything of value. This is a classic example of mistaken identity where activity was assumed to equate to progress.

Unsolicited calls are still a very useful tool in the prospecting kit bag but those calls need to be well researched and informed by the facts. When the call is made the caller must demonstrate an understanding of the individual prospect’s business, potential business issues and the state of the prospect’s industry. The caller needs to be able to educate the prospect based on their wider general knowledge of the issues at hand and the potential solutions.

Myth Four – outbound marketing is dead; inbound is the only way

Our view is that some businesses will do better from outbound, others from inbound but most will benefit from a blend.

In a recent conversation with Michael Packman of Nexus B2B he explained how their research had led them to create a blended or, as he calls it, a hybrid solution which provides both outbound and inbound in the appropriate proportions for each customer. Michael runs what I consider to be one of the very best outbound lead generation businesses so I feel very confident in his findings.

When you drill below the surface of this issue, outbound vs. inbound, another issue is exposed. Although people talk about inbound marketing replacing outbound marketing a subtle change occurs in the expectations where “inbound” not only replaces outbound marketing it also replaces the need to sell. If this is what you want then there is no issue but beware of the hidden change that could occur.

So we bust two myths for the price of one; inbound will generally be most effective when blended with outbound marketing, and inbound marketing is not a substitute for selling.

Myth Five – technology can satisfy all my marketing and selling needs

I am no Luddite, in fact I have worked in the IT industry since 1969, and I have made extensive use of technology in my own businesses since I first started in 1980. I was sending e-mails to selected customers from 1982 and commencing in the same year I provided a cloud (wasn’t called that then) service to companies with mobile sales forces.

So, if not a Luddite what am I? Answer; sceptical. Having mainly worked on the supplier side of technology I know only too well that we can get carried away with the claims we sometimes make. Most technology companies are fundamentally genuine in the claims they make but all are commercial businesses who need to make sales to survive and it is this simple commercial fact that sometimes applies a rosy tinted filter to reality.

In the interests of keeping this short; technology can be extremely useful in marketing and fairly useful in selling. In certain circumstances, technology can all but replace the need for human involvement e.g. when you are ordering something on line. However in B2B sales human-to-human engagement is essential and some of the reasons why have been covered earlier.

Don’t be seduced that technology can do it all and don’t be seduced by the cost argument – technology may be cheaper than human beings but when you find the orders are not flowing as expected the outcome might prove very costly.

Myth Six – technology enables my sales people to be more effective

Always? As a result of technology your sales people can access huge amounts of data both internally and externally about your prospective customers and their markets. All very empowering! However, we see a lot of cases where sales people are literally swamped in data.

Before making a call they check; CRM, LinkedIn, Social Media, Google, credit rating agencies, maybe Companies House and they will typically access internal documents such as call reports. After the call they send a meeting invite, populate the calendar, send a confirmation e-mail, prepare some material for the meeting (perhaps a PowerPoint), and check with marketing for case studies and other sales enablement material. Then a further set of activities follow on from the meeting, and so it continues.

All of this activity looks like work but the ultimate test is whether it makes the sales people more effective and productive or just busy.

Technology should be used sparingly to empower the sales people to make better calls and conduct better meetings but ensure the proportions are right. If your sales people are spending more time in front of the screen than they are on the phone or in the customers’ offices the proportion is probably wrong. The other thing to ensure is perfect alignment between the needs of the sales function and what marketing is delivering to support it. All too often sales people have to spend time re-working things to suit their needs.

A myth is defined as something fictional or unproven
– not a great foundation for business success!

Business Planning Tool Box – tools and techniques to plan for a different sort of year

Old thinking won’t work or as Einstein put it “We cannot solve our problems with the same level of thinking that created them”.

Here we will look at a Business Planning Tool Box; four tools/techniques that will enable a different and fresh approach to the way you look at your business.

The first is Zero-based budgeting. Rather than the historical approach to budgeting which involves small adjustments to expenditure on existing activities, Zero-based budgeting starts from the point that there is no budget for anything. It is rather limiting to view this as just a budgeting approach; it is a very useful business planning discipline. You can read more later…

Then we take a look from a different slant at the 80:20 rule. While in some areas of the business it is quite acceptable that 80% comes from 20% in other areas it is a criminal waste of valuable finite resources. It is not uncommon that 80% of revenue will come from 20% of the customer base; it carries its risks but those risks can be managed and minimised. However, if 80% of your marketing effort produces nothing or 80% of your hard fought for new businesses opportunities are lost due to poor selling technique it could kill the business. You can read more.

The Ansoff Matrix is an interesting tool for looking at your existing and potentially new propositions and how they might map to your current and potential new markets. As 2014 is going to provide many new opportunities it is a good time to consider whether you have become too narrowly focused on your existing markets and whether your existing propositions are just too safe. We look at a controlled approach to evaluating new propositions and markets for your business. More …

Finally the Boston Matrix. The Boston matrix focuses exclusively on your products and propositions and considers them in terms of the return they are making or could make to the business. It visualises a cycle tracing products from the early stage called “Troubled Child” where they are effectively at the level of R&D through the stages of Star, Cash Cow and eventually Dog when little or no profit is being made. Understanding the cycle and how to position your current propositions within it is a very useful planning tool. More …

Zero-based budgeting

Zero-based budgeting effectively asks the question “should we be doing that at all?”.  So, for the moment, ignoring the fact that it will eventually help to produce your budget its real value comes when creating your business plan as it forces you to reconsider every activity measuring it against its value to the business. This is especially valuable at times, such as now, when we expect the plan period to be very different to recent previous periods.

The approach helps to free up thinking which allows new and disruptive ideas to be considered. For example let’s say the marketing manager needs £10,000 for a completely new activity. The typical response will be; what can we cut elsewhere to free up the funds? The problem with this is that the things we rob may be delivering good value but the reduction of funding may have a disproportionately negative impact on what they deliver. It would not be uncommon that the new investment, plus those robbed of funds to pay for it, all suffer and deliver less value to the business. When the focus of budgeting becomes “how little can we spend?” rather than “what value will we gain?” the result is rarely good for the business other than in the very short-term.

Each area of expenditure must be evaluated in terms of the return it will deliver for the business and this must then be measured against the potential cost. The first pass budget can now be created bringing all the areas of cost together matched against the expected income to be generated by the activities. If the figures do not produce the desired outcomes each area of expenditure must be re-considered in terms of the return it was expected to deliver as there is clearly something wrong in the assumptions made. The eventual outcome will be a balanced budget that will consist of funding for the most valuable activities in terms of what they will deliver for the business.

A useful technique to prevent functional protectionism is to have small groups, from mixed disciplines across the business, working on key budget areas. In this way it is more likely that things will be evaluated in terms of true value rather than the prestige they might deliver to the functional manager.

The 80:20 rule

Let’s cut right to the chase; if 80% of your marketing isn’t delivering, stop doing it. If the sales people are losing 80% of the potential deals they work on, look very hard at the deals and the sales people.

In the case of marketing I have heard it said “we know that XX% is working but not which XX%”.  While this may have been acceptable 20 years ago when a significant portion of marketing spend was on advertising it does not wash today. Most marketing people that I know can tell you what return you can expect from a particular investment and they now have plenty of tools to help them monitor and measure the outcomes. One proviso; if the marketing person asks for £10,000 for a particular initiative and you decide to give them only £7,000, don’t expect to get 70% of the promised return; you might but you probably won’t.

Now to those under-performing sales people; this needs some detailed exploration to establish where the real problem can be found. It could be; a weak sales person, a difficult sales territory, excessive competition in a particular area or product line, overpriced products compared to competition, weak lead generation producing poorly qualified leads, inadequate induction and training or poor management and leadership.

There is no question that the problem needs to be solved but not before the root causes have been thoroughly investigated and the real problems identified. I have seen too many good sales people fail due to poor recruitment practise, inadequate induction and training and poor coaching and support in the field. If there are sales people who are really under-performing, action must be taken but a failure to identify the real issues may lead to good people leaving only to be replaced by another set of people who suffer the same fate. What a waste!

Combining the 80:20 rule with Zero based budgeting will provide a strong and reliable result.

The Ansoff Matrix

An Ansoff matrix provides a disciplined foundation for the process of thinking required to explore options.ansoff

A business can be positioned anywhere on the matrix and may well be in several quadrants at the same time but there are effectively four main strategies, each with its own level of risk. As is typical in life, higher levels of risk align with higher levels of potential reward. Consider the four strategies in the context of risk and reward:

Market penetration using your established offerings into your established markets. On the face of it this is the most predictable and lowest risk strategy. However, doing nothing different brings its own risks such as; growth slowing due to market saturation, commoditisation leading to downward pressure on margins, and the risk from new agile competitors.

Surveys typically show this strategy being the major source of revenue for most companies with the average across all industries and types and sizes of businesses being some 88% of total revenue coming from this source. This percentage typically gets higher during times of economic strife.

If this is where you plan to focus, a rational review and analysis of your current position can be facilitated through the Boston Matrix described later.

Product expansion with a new offering to established markets. This has the obvious benefit that the market is known and the established customers within that market will to some extent be sympathetic towards an established and valued supplier. Hence approaching established markets and customers with a new offering is the least risky option for trying something new. Established customers will be easier to sell to than new prospects and will probably be more forgiving if there are issues with the new offering but may well extract special terms as they are functioning as guinea pigs.

Market expansion; taking your established offering to new markets. As this is your well known offering there is little risk from this side of the equation as you know the current strengths and weaknesses and have plenty of experience of selling and delivering it to your established markets. So, the main risk comes from a potential lack of understanding of the workings of the new market so initial assumptions, goals and targets will need to be reviewed regularly whilst learning the new market and how your offering now fits.

Diversification with a new offering to new markets. The new offering could be the result of you developing something new or by taking on an agency or re-seller arrangement for a new solution. If it is something you have developed then although new in terms of a proposition to market you have the knowledge and experience gained from developing it. If the new offering is something you have taken on then your knowledge of the offering is at its weakest compared to all the other scenarios.

The Boston Matrix

bostonThe top right quadrant is the home for your new and probably troublesome ideas; new products, services and solutions. If you are thinking of using off-shore delivery for the first time, this would be a good candidate for the “Troubled Child” category.

The top left quadrant is, as its name implies, where the really good ideas have evolved into valuable offerings; high value, high margin, little completion and customers just love it. Milk it as long as it lasts because in most cases changing market sentiment and increasing competition will eventually drive your Stars into the Cash Cow quadrant. This is no issue as you should by now have got back all the start-up investment, made a very good surplus return and you now have a robust low maintenance offering that “sells itself”.

The thing to beware of is the move to the final quadrant “Dog”.   The term (no offence intended to dog-lovers) in US business speak, implies the things in this quadrant are no longer of any real value to the business, are producing low returns, may be becoming troublesome to maintain as relevant skills are in short supply and may start to damage your brand reputation.  Time to withdraw the product, or perhaps sell off the division.

The two quadrants that are really of interest are Star and Cash Cow. Troubled Child is the feeder to them and Dog is the exit door so focus your energies on the other two.

Using Ansoff you might find a different market where a Dog or Cash Cow will have a better time. Using the 80:20 rule will help you to expose those products and propositions that might have moved to a different quadrant without you noticing.

Taken together these four tools support a very robust business planning approach which is especially necessary in times of great opportunity such as now.

Business growth

Business Growth

Are you an owner manager or business leader, looking to take the next step?

As your business grows, so too the C level team may need to evolve; focusing more on strategy and less on operations, or delegating specific functions. Sometimes, trying to achieve this on your own can be frustrating and risky, requiring a steep learning curve.

In such times of change it can be more cost effective to use external resources to provide the particular skills to successfully design and implement the changes as they are likely to be significantly different to the skills required to maintain the new environment.  An interim appointment is often ideal for these circumstances.

We can work with you and your top team to develop strategic and tactical (sales) plans for:

Growth: providing support, advice and guidance for directors and owners who are dealing with the many problems arising from growing a company in today’s tough business environment.

“Performative has helped us to refocus on our current products and also to look at new markets and we are working as a board far more efficiently.” Director, International Mailing company.

“The work done by Performative created a great foundation for what is now a very successful business.” MD, IT Solutions company.

Succession: If business success has been heavily reliant on your involvement, it is natural to be apprehensive when handing the reins to others so you can devote more energy to the future of the business and coaching your successors, or to freeing you for your next business. We identify the profile of your ideal recruit and shortlist appropriate candidates for your final decision.

“In early 2010 we decided to recruit a Commercial Director to take over the management of the sales and marketing function from me and Performative designed and ran the entire recruitment project. The service provided was excellent as it allowed me to spend more of my time on business, both operationally and strategically, while Performative ran the recruitment project.” MD, IT Parts company.

“Having Performative involved in recruitment of crucial sales appointments gave me peace of mind to leave the UK and build our US operation.” CEO, On-line Education Support company.

Structural Change: drawing on a wealth of practical experience to support you in the preparation and execution of strategy for; new market penetration, acquisitions, mergers, outsourcing, floatation or post-acquisition/merger harmonisation.

“Following the successful completion of a Sales Performance Transformation programme, Performative continued to work with us in support of a plan to effect a management buy-out by existing senior executives. Their wealth of business experience and specific knowledge of the M&A market enabled Performative to provide me with real practical help in finding my way through the minefield of the MBO. In particular it helped me to understand what to expect from the accountants, lawyers and banks, and thus prepare for their processes in funding an MBO. Performative also provided invaluable assistance to the members of the MBO team. Without the support of Performative this would have been a much more difficult exercise peppered with pitfalls.” CEO, Communications company.

Exit: providing expert assistance in preparing your company to make it an attractive proposition for trade sale, divestment or MBI/MBO, enabling you to focus on business as usual and retain business value.

“Performative drove the process throughout, without which support either the business would have suffered or the deal would never have completed. Since completion Performative have continued to support us through the early stages of integration. I am extremely happy with the result they have obtained for us.” MD, Media Agency.

Feel free to contact us for a confidential discussion on achieving your growth plans.

Customer engagement for win-win deals

Customer Engagement

If your customers are slow to make decisions and your pipeline forecast is forever moving, we can help you.

If your sales force are submitting bids with a low uptake so you feel you are just providing free consultancy, we can help you.

Markets are changing and customers have more opportunities for research before they buy, consequently the sales force has different challenges in order to engage with customers. Gaining insight into your Customer’s world and thereby understanding how you can deliver greater value than your competitors can be key to how you approach your target market.

We have helped companies in various sectors re-focus their propositions and markets for greater customer engagement, leading to more new and extension business. This also assisted the sales management to obtain more reliable forecasts.

“Working with Performative greatly improved the quality of engagement with potential customers and our ability to forecast outcomes from those.” MD, Mobile Technology company.

Feel free to call us for a confidential discussion.

Sales Strategy

Too often sales is driven by short-term tactics and knee jerk reactions to the latest poor results or other problem.  While it is important that a business maintains its ability to react, it is even more important that there is a solid foundation on which long term plans can be built. Sales strategy must be linked to business strategy and this helps to provide a more reliable and predictable future for the business.

This is a large topic and it is difficult to do justice to it within the constraints of a newsletter.  I hope the following provides enough interest for you to consider your own position and whether your approach to long-term planning for sales and selling activities is fit for your purpose.

Feel free to contact us for a more detailed discussion.

What is a sales strategy and why should you have one?

A sales strategy is the mechanism for turning theory into practice; it helps you to exploit your good ideas.  It is used to take your business plan and strategy and convert them into something that puts money on the bottom line in a planned and predictable way.  It helps you to realise your dreams, goals and long term objectives.  It is a crucial part of the business road map that tells you; where you are going, when you will get there and what you expect to see along the way.

Without such a strategy in place, you are really taking individual steps rather than following a well planned and executed journey.  Those individual steps are often driven by the need to react to some external force whereas the strategy helps you to stay focused on the long term goal resisting the distractions of the unexpected; helping you to assess their relevance and potential more impartially.

When should you have a sales strategy?

When? Always!

It is not uncommon that companies develop a sales strategy when they are going to do something new or the same thing in a different way.  For example; you may have some market or competitor intelligence which indicates there is potentially a lot of new business for you outside your existing geographic footprint.  It is reasonable to assume that your current go-to-market resources are working to capacity so you need to consider; how will you explore and exploit the new potential opportunity?  To answer this question thoroughly you need to create a sales strategy which should then be documented as a plan of action for everyone and every function required to make the plan happen.

In the above example, the trigger to create the strategy was change.  However, this is not just something to consider during times of growth or other change.  Even if you consider yourself to be in a “steady as she goes” period, you still need a sales strategy to ensure you are the driver and not a passenger on your journey.

What does a sales strategy look like?

The documented strategy provides a complete plan of action for everyone and every function (internal and external to the business) that will be involved in creating and executing the strategy.  This is by no means an exhaustive list but the strategy should, as a minimum, cover the following:

  • Detailed research to further test the original assumption.  A key output from this is a valuation of the new market and how much of it you might reasonably expect to gain.  This also clarifies the sales objectives in terms of volume and value of the targets.
  • Routes to market – how will you access your new market?  Will it all be direct to market or will you use partners or some other indirect channels such as collaborations?
  • Research to identify a long-list of potential target customers both by type and individual companies.
  • What sales and marketing effort do you need to put in place?  Is this more of the same or will you need some new and different skills as well?  This looks at; budget, headcount, recruitment, induction, training and management.
  • What can technology bring to the new initiative?
  • What else is required to support the sales and selling effort?
  • Systems for monitoring progress providing feedback to modify activities and improve the effectiveness of the strategy.

What are the benefits of a sales strategy?

It provides certainty and control.  Any decision involving what, how and where you approach your existing or a new market should be embodied within a sales strategy that you implement, execute and manage.

It helps you run your established business providing a consistent means to monitor performance.  Through the use of a management dashboard you will have early warnings of issues which could affect the business in the future giving you the opportunity to deal with the issue before it really causes a problem.

It helps you exploit new opportunities by identifying what must be done and what resources are required to do it.  If the perceived opportunity is less valuable than anticipated you will find out quickly so that you can take a remedial action or abandon the new initiative altogether.

The published and documented strategy is a statement of intent of the actions you will take to deliver on your business strategy.  It creates a unifying force for all the people involved in delivery and it sends a message to potential customers that you mean business.

What would be the second thing you looked at if you wanted to make more profit?

A recent post on LinkedIn asked “What would you look at first if you wanted to make more profit – sales, product, marketing, staff, overheads, purchasing or something else?”

The answers contained many good suggestions, but all focused on cutting overheads or purchasing costs.  To us it seems highly likely that anyone that has been in business during the past four years has done all the cutting they can.  Cutting fat is of course a good thing, regardless of the economic circumstances, but there is a limit to how far this can go before it damages the business’ ability to grow and it is certainly not a strategy for long-term sustainable growth.

So, after all the cost cutting, what is the second thing to look at?  The answer; strategies to grow the top line.

Become lean by all means, but not skeletal! How can you grow if you're mal-nourished?

Become lean by all means, but not skeletal! How can you grow if you’re mal-nourished?

So, our answer to the question was; cut everything you can, deploy good cost control processes so the fat does not grow back then pay attention to the systematic growth of the top line.  You cannot cost cut your way to success, it is a tactic for surviving not thriving.

If you have not already started, now is the time to look to your strategy for growing the top line.  We suggest the following multi-facetted approach:

  • Expand your efforts to hunt for new customers in your existing markets with your established offerings
  • Look for new customers in new markets for your established offerings
  • Continually farm existing customers for add-on and new business
  • Devise new products and services to sell to existing markets
  • Once your new offerings are established take them to new markets

There is a danger that during a period of relative inactivity, as is common during a cycle of cost cutting, the organisation loses its “hunting” edge.  So, it is important to devise and deploy different and proactive go-to-market strategies that will drive a program of hunting.

Finally, back to cost control.  Always keep a focus on the costs and if you find you have activities that are no longer core either divest them or outsource them.

Global Mailing

The Outcome:

Performative’s work assisted Global Mailing to define and articulate its market proposition and refine its selling operation to exploit its unique position.

“It has helped us to refocus on our current products and also to look at new markets and we are working as a board far more efficiently.”  Director, Global Mailing

The Challenge

“Global Mailing is a company with an approachable human face that passionately believes in the creation of close working partnerships between customers and suppliers. By maintaining professional and straightforward communication, we continually address customers’ specific requirements, and are able to respond quickly and effectively should any unexpected demands present themselves.”

Global Mailing has a well-established international mailing business, but was promoting low price as its key differentiator.  The company wanted to grow and asked Performative to assist in analysing and addressing the issues that were preventing this from happening.

The Performative Solution

A series of structured steps enabled Performative to help Global Mailing achieve its objectives:

  • A Sales Maturity Assessment (SMA) provided an initial view of sales capability.
  • A Win-Loss review exercise proved a valuable method to uncover Global Mailing’s true differentiation as viewed through the eyes of its customers.
  • A Market Focus Review (MFR) built on the findings of the Win-Loss review which was used to develop the market proposition.
  • Work with the Executive team included business planning around the new proposition and creating a robust forecasting mechanism to enable annual revenue targets to be set.  The work with the Executive team also served to improve the effectiveness of the board and to support the creation of a three year strategy and business plan.
  • The new business plan was mapped into a sales action plan that included:
    • Creation of clearly defined and equally valued territories with an associated re-structuring of the sales team to reduce tension over prospect allocation.
    • Focus on key customer types to build knowledge of customer business to improve service and loyalty.
    • Development and implementation of a Sales Handbook covering all relevant and important sales steps and processes, in particular:
      • Pipeline creation and management.
      • Introduction of the CAPO ratio – Calls : Appointments : Proposals : Orders –  to refine forecasting accuracy and aid sales activity planning.
    • Assistance with sales recruitment to supplement the team.

Arrk

The Outcome:

Transformed sales team structure and composition to reduce reliance on too few customers and on the Managing Director as the focal point for sales, thereby positioning the company better as an acquisition target.

The Challenge

Arrk is a software development company that focuses on helping its customers improve their bottom line through the imaginative use of web and mobile technologies.

Arrk’s challenge was that it had built a strong, but small, customer base and this had become a risk to the business.  The Managing Director (MD) was also heavily involved in the success of these few customers, thereby compounding the over-reliance position.  At the time of Performative’s project, the MD was interested in the possibility of selling Arrk, so needed to ensure a robust selling operation was in place for the benefit of potential buyers.

The Performative Solution

Performative undertook a Sales Performance Transformation exercise in two stages:

  • Performative initially provided an interim Sales Director, who undertook a range of activities to structure and establish a good team.  These included:
    • Evaluating the capabilities and motivations of Arrk’s existing sales and marketing people through one-on-one interviews and psychometric tests
    • Creating a marketing/lead generation capability
    • Designing and delivering a training and development programme for sales, marketing and sales support staff
    • Managing the sales team and undertaking coaching and mentoring as required
  • In parallel to the sales team work, Performative implemented Performative Structured Selling®, which included:
    • Creating an overarching sales and marketing strategy
    • Reviewing Arrk’s current sales and marketing processes including the bidding processes and standard document used for bidding and proposals
    • Amending existing processes as required and blending with Performative Structured Selling ® to produce a complete sales and marketing approach
    • Documenting the complete process as a sales manual.
Fibre Technologies, sales performance improvement, MBO