Sales Strategy Development

Advanced Sales Management Workshop

June 23-24, 2010
David J. Fritz
President
Growth Solutions, LLC
Naperville, IL
fritz@growthsolutionsinc.com

© 2010 The Sales Management Association. All Rights Reserved.

Sales Strategy
Where does it fit within the Sales Management Process?
• Understand your • Determine optimal
opportunities and size and
target the most deployment of the
attractive sales force

I. Right II. Right

Focus Coverage

IV. Right III. Right

Support People

• Train, motivate, • Select the

provide tools, and appropriate
manage salespeople

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
2 Management Association. All rights reserved.
Session Overview
Agenda and Discussion Guide

• What is a good selling strategy?

• Framework for sales strategy development
• Analytical tools to support sales strategy development

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
3 Management Association. All rights reserved.
What is a good sales strategy?
Characteristics of a well defined sales strategy

• It can be executed by the sales force

Syncs with our value proposition and ability to deliver on the promise

Underlying goals are achievable given market potential, sales cycle,
and the selling resources deployed

Readily cascaded down to individual salespeople in ways that they
easily understand and care about (e.g., the comp plan)
• When executed value is created for:

The company

Customers

Channel partners

The sales force

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
4 Management Association. All rights reserved.
What is a good sales strategy?
Sales Strategy Defined

What will be sold, to What goals are essential

whom, in what quantities, for the SF to accomplish?
and how?

A Plan of Action To Achieve A Sales Goal

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
5 Management Association. All rights reserved.
What is a good sales strategy?
Common Sales Goals

• Revenue - Absolute $, $ Growth, % Growth

• Volume – Units, Market Share, # Accounts, etc.
• Profit – GM $ or %, NM $ or %, Product Mix, Price, etc.

Most sales strategies today aim to accomplish multiple sales

goals (e.g., profitable revenue growth). The specific type of goals
selected are industry and sales force dependent. A good goal has
(1) “line of sight” with what the sales force can influence on a
daily basis, and (2) is an allocation of the business plan – the sum
of individual sales goals adds up to the corporate goal.

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
6 Management Association. All rights reserved.
Sales Strategy Framework
What Will Be Sold, To Whom, and How
Sales Strategy Pyramid

Acquisition =
Retention =
Prospects Expansion =

Accounts
Customers

Existing New & Additional

Existing
Products
A well articulated strategy defines what will be sold, to which customer and
prospect segments, how much we anticipate selling to each segment, and how
we will cover the addressable market opportunity.

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
7 Management Association. All rights reserved.
Sales Strategy Framework
Prerequisites to Sales Strategy Development

• Have a value proposition

• Understand your sales potential
• Segment - know with whom you want to do business

Sales strategy ultimately involves making choices and defining a

sales focus (e.g., knowing what to pursue and not to pursue). To
make good choices, it is essential to know for which customer
segments our value proposition will resonate and the
corresponding sales potential within these segments.

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
8 Management Association. All rights reserved.
Sales Strategy Framework
Value Proposition

Sales
Execution
Value
Fulfillment

A good value proposition is:

• Unique
• Compelling
• Honest

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
9 Management Association. All rights reserved.
Sales Strategy Framework
Sales Potential Estimation

Total Potential – the aggregate spend if all potential

customers purchased the offering

Currently Served Potential – the current dollars spent

by purchasers of the offering

Addressable Potential – the dollars spent by

purchasers where the organization has a value
proposition and could effectively compete

Winnable Potential – the dollars spent by

purchasers that the organization could
realistically cover and win

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
10 Management Association. All rights reserved.
Sales Strategy Framework
Sales Potential Estimation - Illustration

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
11 Management Association. All rights reserved.
Sales Strategy Framework
Segmentation

Account Segmentation Buyer Segmentation

Decision
Maker

Influencer
High
Potential
Gatekeeper
Mid Potential

Low Potential

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
12 Management Association. All rights reserved.
Sales Strategy Framework
Segmentation - Illustration

New Sales Opportunity Retention Opportunity

Accounts New % of Total Retention % of Total

167 $36,688,317 17.8% $0 0.0%

405 $39,054,236 18.9% $0 0.0%

2,508 $93,234,536 45.2% $0 0.0%

270 $19,360,665 9.4% $43,511,676 49.6%

348 $9,573,218 4.6% $24,320,277 27.7%

666 $8,407,936 4.1% $19,924,337 22.7%

4,364 $206,318,909 100.0% $87,756,290 100.0%

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
13 Management Association. All rights reserved.
Sales Strategy – ARE Tool
Looking to the Past to Define the Future
Sales Strategy Pyramid

Prospects

Accounts
Customers

Existing New & Additional

Existing
Products
Acquisition – Getting new customers
Retention – Retaining existing customers
Expansion – Selling new products/services to existing customers

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
14 Management Association. All rights reserved.
Sales Strategy – ARE Tool
Looking to the Past to Define the Future
Norm: 100% 85% 15% 15% 5% 105%

Best in Class: 100% 95% 5% 30% 15% 140%

+
- +

Last Retention Churn Expansion Acquisition This

Year’s Base Year’s Sales

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
15 Management Association. All rights reserved.
ARE Tool - Illustration
What Can You Conclude About This Territory?

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
16 Management Association. All rights reserved.
ARE Tool - Illustration
How Is This Territory Different From the First?

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
17 Management Association. All rights reserved.
Concluding Thoughts
If Nothing Else, Please Remember:

1. To define/seek to understand the company selling strategy –

visual frameworks help
2. To cascade the selling strategy to your area of responsibility
and individual salespeople
3. To utilize analytics … seek the help of Sales Ops
4. Simple strategy well executed trumps sophisticated strategy
that’s not executed

David Fritz
fritz@growthsolutionsinc.com

Copyright © 2010 Growth Solutions, LLC, used with permission by The Sales
18 Management Association. All rights reserved.
Discussion