Strategic Selling - How to Sell Strategically
by Alan Rigg
Published on this site: January 9th, 2006 - See
more articles from this month
If you want to maximize your sales performance, take a Strategic
approach to selling. After all, wouldn't you agree that "the
80/20 rule" applies to customers, where approximately
20 percent of customers produce approximately 80 percent of
sales?
The starting point for strategic selling is figuring out
a) which customers produce the bulk of your sales, and b)
what they are buying. Armed with this information, you can
strategically plan how to increase sales.
Critical Data Elements
If you want to sell strategically, you need to have access
to specific data elements. Plus, you need to be willing to
perform data analysis.
Which data elements do you need? This list provides a
reasonable starting point:
- Customer Name
- Revenue by Month by Customer
- Gross Margin or Gross Profit by Month by Customer (this
is only necessary if it impacts your performance measurements)
- Product or Service Name (for each product or service
purchased by each customer)
- Product or Service Quantity (for each product or service
purchased by each customer)
- Product or Service Unit Price (for each product or service
purchased by each customer)
- Product or Service Extended Price (quantity x unit price)
This data can be used to analyze the buying habits of
your customers. Sort it in various ways to answer the following
questions:
- Which customers buy the Most from you?
- What is the Trend for each customer's purchases? Are
they buying more or less when you compare the current month
to preceding months? How about when you compare the current
month to the same month in the previous year?
- Which products or services are they buying?
- Are the amounts purchased in line with your expectations
and the commitments that have been made by your customers?
- Which products or services are they not buying?
- Why aren't they buying these other products or services?
Once you have completed the first stage of analysis, consider
this next set of questions:
- How much time should you allocate to each customer in
your territory? (Tip: You should spend 80 percent of your
time with the customers that buy the most and/or offer the
greatest potential for sales growth.)
- What is your plan for increasing sales to each of your
customers? (This includes selling more of what they have
already been buying, and selling other products or services
that they haven't purchased from you previously.)
- Which new prospects should you pursue?
Tip: Which prospects can your existing customers
Refer you to? Which prospects have the greatest potential
to produce significant sales?
It may not be easy for companies to extract the data that
is required to support strategic selling. However, arming
salespeople with this data is the best investment a company
can possibly make. Strategic selling enables salespeople to
maximize their sales, which in turn maximizes the company's
overall sales and profitability.
How frequently should the data be made available to salespeople?
If sales cycles are relatively short, it would be ideal for
the data to be available on demand, with the minimum frequency
being weekly. For longer sales cycles, providing the data
on a monthly basis may be adequate.
Strategic selling begins with data availability. If you are
going to maximize sales, you need to be able to analyze your
customers' buying patterns to determine how to prioritize
your efforts. Which customers should you spend the bulk of
your time with? How much time should you allocate to each
customer? How will you increase sales to specific customers? Which new prospects
should you pursue?
Plan your work, work your plan, and compare your results
frequently against your quota and personal goals. Sell strategically
to maximize your sales, minimize unpleasant surprises, and
maximize your earnings!
Sales performance expert Alan Rigg is the author
of How to Beat the 80/20 Rule in Selling: Why Most Salespeople
Don't Perform and What to Do About It. His company, 80/20
Sales Performance, helps business owners, executives, and
managers double sales by implementing The Right Formula™
for building top-performing sales teams. For more information
and more free sales and sales management tips, visit http://www.8020salesperformance.com
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