Sales strategy
The term sales strategy describes a long-term, planned design of the sales function as part of a marketing plan . The main objects of the design are (1) the selection and structure of the target customers including the definition of the type of customer relationships , (2) the definition of the desired competitive advantages , (3) the definition of the sales channels and the sales process including the relationships with sales partners and (4) the specification of Framework for the conditions and pricing policy . In addition, there is (5) the selection and development of the sales skills of the sales staff.
Importance of sales strategy
According to Robert Kaplan and David Norton, falling margins, price competition and cost pressure are mostly the result of a lack of strategic alignment in sales. This is shown by numerous empirical studies. For example, building trusting customer relationships or developing sales skills takes several years. However, if the “right” customers or segments are not selected in good time, contradictions and wrong decisions are almost inevitable in the operative business. The same thing happens if the customer relationship strategy, the personnel strategy and the customer selection are not coordinated. As a result, the “wrong” salespeople visit the “wrong” customers with “wrong” consulting services or skills more and more frequently. The entire sales process cannot function smoothly. That is why the authors recommend a long-term customer selection, acquisition and relationship strategy based on corresponding key figures as the basis of every sales strategy.
Customer selection as part of the sales strategy
When selecting customers as part of the sales strategy, several criteria must be observed (see customer value ). The focus is on aspects such as the size of the order, price sensitivity, expected contribution margin, costs of customer care and future customer growth. Certain customer behaviors come into question as a further selection criterion. Michael Hutt and Thomas Speh differentiate between (1) “Programmed buyers” who are not very price-conscious, do not attach great importance to advice and view purchasing as a routine activity. The next group are (2) "Relationship buyers"; they value good relationships, are very well informed, but do not put too much pressure on prices and services. In contrast, the (3) “transaction buyers” are very price-conscious and know the market and the competitive offers very well. As a rule, the price is just as important to them as the service and advice because they have sufficient in-house know-how. The last group includes the (4) "Bargain hunters" or "Bargain hunters". They mostly buy in bulk and are extremely price conscious.
Buying situations are another criterion for aligning the sales strategy. This includes the “new task buying situation”, which involves developing innovative problem solutions for and with customers. A product that does not yet exist or a solution to a strategic or organizational problem facing the customer, on which experts from both companies work together over a long period of time, is “sold”. Example: Construction of an oil production system or implementation of business software. Another typical situation is the “straight rebuy”. In this case, the provider and the customer have extensive experience in the cooperation area and continuously improve their cooperation. Finally, the “modified rebuy situation” should be mentioned. As a rule, the customer has a system for evaluating the performance of suppliers (see supplier evaluation ) and decides on a case-by-case basis for the supplier, based on given criteria such as price-performance ratio, error rate, delivery reliability, service quality , Flexibility and willingness to cooperate are rated best.
Strategic classification of customer relationships
The general rule of thumb, according to which it is about ten times more expensive to acquire a new customer than to keep a regular customer, illustrates the importance of the management of customer relationships and customer loyalty as the basis of the sales strategy. A distinction is made between financial, social, individual, structural and emotional ties. With financial ties, the customer remains loyal to the company because they have clear financial advantages. This includes price and cost advantages as well as favorable delivery and payment terms . The social bond is essentially based on personal contacts that are characterized by friendliness, reliability, competence and courtesy. The most important characteristics of the individual bond are intensive advice and adaptation of the offer to the wishes of the customer. In the structural relationship, the customer and the provider are linked through joint projects, investments, the use of systems and an intensive exchange of experience and information. With good experiences, mutual benefits and smooth cooperation, trust emerges as the basis of an emotional bond.
Design of customer relationships as part of the sales strategy
According to an empirical study by Robert Palmatier, in which 446 transactions and data from 2,554 customers were evaluated, companies with above-average customer relationships achieve a return that is 2.5 times higher than the average. The return is defined as sales multiplied by the contribution margin . A study by John Fleming and co-authors, in which 1,900 companies were examined, came to similar results. This study found that companies with above-average customer and employee satisfaction achieve sales growth and profitability that is 3.4 times higher than other companies. The definition of satisfaction included a rational and emotional aspect. These empirical studies impressively illustrate the strategic importance of good customer relationships and appropriately qualified employees as essential elements of the sales strategy.
The design of customer relationships requires a systematic diagnosis - for example with the help of a customer survey. Palmatier differentiates between three dimensions of the customer relationship (see adjacent graphic): relationship quality, contact density and contact authority. Important characteristics of the relationship quality are the interest in the relationship, the existence of a basis of trust, reciprocity and little effort in maintaining the relationship. The contact density measures the number of contacts that are necessary to know and understand the customer's processes. This also includes the knowledge of decision-makers as well as the exchange of information and knowledge transfer. The contact authority should provide information about the contact persons. Typical questions are: What decision-making powers do these people have? Do they provide access to key decision-makers? What financial and human resources do you have? Can you initiate initiatives? What can you learn about the further development of the company or future challenges etc.? The creation of customer relationships is only possible in the long term and is therefore an essential part of the sales strategy.
Conclusion
The central task and responsibility of sales is to generate sales with a certain contribution margin. The - often overlooked - principle applies that today's turnover is the result of decisions (actions or omissions) that were made three to five years ago. This applies above all to the selection of customers according to strategic criteria, the establishment of trusting relationships, the organization of the sales process and the appropriate qualification of the sales staff. In the short term, such failures can hardly be remedied. As a result, the greater the uncertainty about the sales strategy, the more difficult a sustainable increase in sales is. In other words: the sales strategy is the most important prerequisite for sales success, as the empirical studies outlined above also show. Only on the basis of a clear and communicated sales strategy should one decide on the competitive advantages to be strived for , the design of the sales process , the development of sales skills and the other aspects of sales policy (previously known as distribution policy).
literature
- Hofbauer, Günter / Hellwig, Claudia: Professional sales management , 2nd edition, Erlangen 2009, ISBN 978-3-89578-328-9 .
- Homburg, Christian u. a .: Sales Excellence , 4th edition, Wiesbaden 2006, ISBN 3-8349-0015-X .
- Pufahl, Mario u. a .: Sales strategies for medium-sized companies , Wiesbaden 2006, ISBN 3-8349-0036-2 .
- Winkelmann, Peter: Sales conception and sales control , 4th edition, Munich 2008, ISBN 978-3-8006-3538-2 .
- Witt, Jürgen: Process-oriented sales management , Wiesbaden 1996, ISBN 3-409-13567-7 .
Individual evidence
- ↑ Christian Homburg a. a .: Sales Excellence. 4th edition, Wiesbaden 2006, pp. 27 ff. And Christian Belz: Sales Competence. 2nd edition, Vienna 1999, p. 59 ff.
- ^ Robert Kaplan & Davin Norton: Customer Management. In: Harvard Business Review , May – June 2003
- ↑ Michael Hutt & Thomas Speh: Business Marketing Management: B2B , 10th edition, Cengage Learning, 2010
- ^ Waldemar Pelz: Strategisches und Operatives Marketing , Wiesbaden 2004
- ↑ James Anderson et al .: Business Market Management , Prentice Hall, 2009
- ↑ Robert Palmatier: Inter Firm Relational Drivers of Customer Value. In: Journal of Marketing , Vol. 72 (2008)
- ↑ John Fleming et al. a .: Manage your human sigma. In: Harvard Business Review , July – August 2005