A company strategy without a corresponding sales strategy is akin to an acquisition plan without a post-acquisition integration plan. One without the other is sure to disappoint.
Emerging from our research is a framework that companies can use to develop and execute a sales strategy. The framework takes the classic idea of the three C’s (Costs, Competitors, Customers) to sales force execution.
Different companies selling similar products may have a very different cost of sales. Businesses should expect their sales costs to decline systematically, at a rate that can be accurately predicted, as they gain selling experience. The amount of labor that goes into making a sale declines predictably as the number of sales are increased.
You cannot truly understand how your sales force is doing or is likely to do unless you understand exactly how your selling costs compare to your competitors.
The second component of the framework is the growth-share matrix. The growth-share matrix has been a central tool in corporate strategy for decades but its application to sales forces is a new concept.
Some sales territories are growth businesses. These territories automatically compound because of repeat purchases. Some sales territories are stable businesses that throw off cash and maintain their value over time. Some sales territories are declining businesses and should be managed for cash flow. Yet other sales territories are speculative where they pay off or they do not.
A company must be able to compare its territory performance to that of its competitors. Leveraging a growth-share matrix provides a mechanism to do so.
Here, the focus is placed on value creation, i.e. how to sell more. A sales force can break down what they do, from the creation of a lead, to the conversion of a lead into an opportunity, to the closing of a deal, into smaller and smaller pieces, each being judged on its competitiveness.
How does your company’s performance of activity X measure up to your competitor’s in terms of value delivered to the customer? A framing device, such as a sales value chain analysis, can isolate every activity that goes into winning a deal which can be benchmarked against other divisions, sales geographies, other companies, even other industries.