Strategic Advantage

In a war, generals don’t send troops into battle without a plan. It would mean certain defeat. Any sales manager who would send the sales team into the field without a plan would be setting them up for failure. But what makes a winning plan? Is it simply a matter of telling salespeople to go out there and sell as much as possible? Of course not.

"The foundation of any sales strategy is based upon three elements: customer knowledge, product knowledge and competitive knowledge. Sales managers and their sales force must develop a base of information to determine the needs of the customers, the strengths and weaknesses of the product or service, and the strengths and weaknesses of the company as opposed to the competition," says Timothy Bednarz, president of Bednarz Business Strategies International Inc. "The design of a sales strategy is, by nature, a strategic activity rather than a tactical one and should be directly related to the strategic and marketing goals of the company. It has major long-range implications and requires the comprehensive use of information for the strategy to be effective."

A strategic selling plan is an offshoot of a company’s marketing plan, which is driven by company-set budgets and goals. It can be an overall assessment of the market in general, or it can get down to micromanaging categories and the efforts of each individual sales rep. The complexity of a sales strategy depends upon what the company sells and who its customers are. It is a road map identifying how to achieve company sales goals.

"I look at strategy from an Old World military strategy viewpoint," says Kevin Neugent, director of Strategic Partners (Michigan) for Lucent Technologies, who says he develops his sales strategies on a per-account basis. "Every year I’m given corporate growth numbers and we determine how these goals are going to play into our client base," he explains. "I sit down with my global account managers and we determine, based on the technology we have, whom we’re going after in the next month, quarter and year.

"Technology changes quickly, and as a global sales manager I can’t affect that change – but I do have to incorporate it into my strategy. That technology isn’t going to universally affect all my clients, and we need to identify whom it can apply to and determine and implement strategies to go after those opportunities. I don’t run the labs. I’m given a number of solutions, and our job is to determine whether there is a fit for our clients."

Neugent and his global account managers work together to construct a sales strategy. "We go through a series of question sets relating to technology and selling opportunity assessments," he says. "First we determine opportunities, from both customer and application perspectives, then go into clients’ profiles, financial conditions and anticipated costs, strengths, weaknesses, political alignments, corporate compatibility…a whole host of areas."

Neugent’s first question set is Where are the opportunities? That drives a subset that includes questions about applications, client profiles, propensity to pay and compelling events.

"The second question set covers customers’ formal decision-making criteria: Will our solution work? What sort of modifications/enhancements need to be made? What sort of resources are we going to have to commit to make this happen? and Does Lucent have a unique business value?

"The third question set includes Can we win? Do we have inside support – mentors, coaches and champions? Do we have executive credibility – access to the appropriate levels that are going to make decisions based on our solutions?"

Neugent says the last set of questions in this exercise centers around whether an application, from a return on investment perspective, is actually worth winning. "In the last set of questions we ask Is it worth winning? What’s the short term revenue impact on us; will it lead to future sales; what type of margin can we make? What’s the degree of risk on our part; what resources are we going to have to zap up after the sale? If we do win it, will it provide us leverage in the market segment, industry setting and corporate setting? Only after we answer all these questions do we start designing specific account-based sales strategies."

Bednarz lists the following logical steps to strategy development. "First, collect information and verify the accuracy of the information. Analyze it, looking for ways to maximize your strengths and minimize your weaknesses against your competition and to position your product or service successfully in the customer’s mind.

"The next step is to develop a sales strategy based on your analysis, test it with friendly customers, revise it based on customer feedback and then roll it out. Above all, execute, execute, execute."

Neugent adds, "Sun-tzu, in The Art of War, states that you’re either in an offensive mode or a defensive mode. If you’re on the offensive, develop your strategy based on your opponent. Don’t think about a frontal attack strategy unless the odds are three to one in your favor. Instead, consider a flanking or a fragment strategy, taking small ‘niblettes’ of the account in an effort to gain the whole.

"If a client is very entrenched with one of our competitors, I probably wouldn’t try a frontal attack to try to get the whole enchilada. It’s a risk that weighs heavily. I’ve tried it before and at times failed, even when I felt I had the clear advantage."

According to Bednarz, developing a sales strategy requires the same components regardless of what industry you’re in or what product or service you sell: "Strategy development is really no different from company to company or industry to industry. The basics are always the same – without the development of adequate information, any strategy will be flawed. Concentrate on the customer, the product and competitive information, and then position yourself based on your analysis."

Getting Upper Management Buy-In
Rapport with upper management is critical in developing and implementing a successful strategic selling program, says Michael Kornemann, retail sales manager for the Wisconsin State Journal.

"You need to make sure that the goals set by upper management are doable. Don’t be afraid to clarify them and, in a positive way, even challenge them," Kornemann urges. "Upper management has pressure to come in with a certain amount of dollars for investors and stockholders. It’s up to the middle managers to get down to the customer level and see if the strategy will work. "It just takes good old fashioned sales research and that means getting out with your sales reps and talking to clients."

Regardless of what you’re selling, there are common threads in developing a strategic selling strategy. Still, each industry has its nuances. Kornemann’s challenge is working with a customer base that has a frequent buying cycle and encompasses many different categories.

"One of the main considerations in the newspaper business is that the buying cycle is daily, although not for every account," he explains. "Most established customers tend to do the same thing every year and their marketing plans don’t significantly change unless new competition comes into the market, they take on a new product line or they’re planning an expansion or adding a second location."

Having a buying history and data about the advertising expenditures by category almost forces Kornemann and his sales staff to plan selling strategies on a client-by-client basis, tweaking them by category. It also gives the individual salesperson a base on which to build customer trust and increase business.

"We know that the XYZ customer ran 200 inches last April for a certain product or event. That gives the salesperson a history and a reason to get back to them and build a solid customer service relationship," says Kornemann. "The strategy on this level is to build a good relationship so that clients trust our ability to manage their media budget. Then when changes happen in the marketplace we’re in a good position to get those additional promotion and advertising dollars."

Strategizing on a category-by-category basis allows Kornemann to measure progress within each area and capitalize on opportunities or address problems as they arise. "For example, a while back we ran into a wall in our dining category," he recalls. "Lineage was decreasing, so we conducted focus groups and had about 40 interviews. We found that we had a price problem. We came up with a new lower rate, reworked the commission structure and modified our sales strategy for this category. We knew we’d lose a little bit in numbers over an 18 to 24 month period, but we would increase our active advertisers and ad count – and it’s working."

Not only does Kornemann set strategies for traditional newspaper advertising sales, but he also develops sales strategies for new products. "Today newspapers are information vendors, and that encompasses not only our daily, but preprints, direct mail, online advertising and new publications," he points out. "We develop sales strategies that address a ‘synergism of media’ that blends these products together. The staff has to be reprogrammed about the opportunities."

Todd Strumpfer, sales manager at TSU Transworld Systems in Rochester, MN, faces a different challenge in developing a sales strategy. TSU is a collection agency with more than 150 offices and 700 independent contractors throughout the United States. Because of the status of employees, Strumpfer’s sales strategy has to rely more upon the power of persuasion.

"TSU is a company of independent contractors, so our sales strategy is not so much based on pursuing specific categories and developing strategies for those categories as it is focused on strategically increasing overall selling activity," explains Strumpfer. "At our sales meetings, we discuss strategies for selling different categories, such as attorneys or veterinarians, but we encourage our salespeople to take care of the numbers.

"A lot of our people work with vertical markets, and we supply them with information on selling strategies for these specific markets. Our main emphasis is on teaching our salespeople the strategy of setting goals, charting their time and numbers and working from front to back in their sales efforts."

Neugent believes once a sales strategy is put in place, it shouldn’t be changed anytime soon. "Once you establish your sales strategy, don’t be too quick to abandon it if results aren’t immediately forthcoming," he advises. "Stay on top of progress and continuously monitor. If something happens in the marketplace, develop the appropriate response. You can change your tactics, but not your strategy."

Bednarz agrees: "The current sales environment is hyperactive and technology is driving changes at an ever increasing pace. But strategies, by nature, are long-term. I don’t advocate abandoning a sales strategy unless it is an obvious failure. If the information upon which the strategy is based is solid, then the strategy should also be solid."

Neugent adds, "Typically, salespeople don’t take a lot of time thinking about strategy because most of them are action oriented, which is what you want them to be. You need to get them to sit down and think about the complexity of the landscape and force them to consider how they can best deploy the strategy that they originally agreed on. If you don’t, they’ll end up reacting to situations more than implementing the strategy."

"The key to a successful sales strategy is the actual execution of that strategy," concludes Bednarz. "If you execute the strategy well, you’ll succeed. Most sales strategy failures are failures of execution rather than failures of strategy."