Part Two: Component Elements of Sales Strategy II
The two functions that perfect the Business and form the basis of the Strategy are Production and Sales, all the others must be subordinated to these.
The basic management approach of any enterprise or company cannot depart from the consideration of this premise.
(Considerations taken from the book: "The STRATEGOS and the Sales Strategy. How to propose and execute the Strategy for the fight in the Market")
The Organization can keep everything else in order, but if it does not produce and sell satisfactorily the rest is irrelevant. From the smallest undertaking to the largest of Corporations, there is a fundamental fact: they are all supported by a Business.
When organizations grow healthy, they are forced to incorporate support tasks into their structures, from the most basic Accounting, through administrative tasks to sophisticated commercial tasks. These support functions are part of the Support Structures and are understood and justified only because the Business needs them.
The ONLY two functions of the Business are Production and Sales, they allow the essential meaning of the Business to be perfected, that is, to support “an activity that generates utility, interest or profit for those who put it into practice”.
As it is logical to suppose that nobody will do business producing what cannot be sold, the function of SALES predominates over that of Production and thus constitutes the fundamental task of the Business. If it is not sold there is no need to produce and all the support tasks are not important.
For a Business or a Company to effectively manage their Sales tasks, they need to focus all organizational resources on this objective. Furthermore, since Sales tasks essentially involve Market Action and interaction with competitors, they cannot be “anchored to laboratory interests” or established prerogatives in environments far from the point of contact, and usually related to planning efforts. Sales are daily tasks closely linked to Action.
The Entrepreneur, like the Manager of the large company, must always maintain a clear mental focus towards Sales. This is the best guarantee of good management and obtaining results! Everything else fits easily when this requirement has been met.
A Sales Strategy involves at least the following:
- Approach of Major Purposes related to Sales. Establishment of Sales Objectives. Determination of HOW TO SELL (Strategic Routes, Strategic Approach, Individual Strategies). Market Evaluation. Identification, Evaluation, Positioning and Movement of Strategic Resources.
A summary of points 2 and 3 is as follows:
Setting Sales Goals and HOW to Sell Considerations
All Sales Strategy begins with the fact that the SALES OBJECTIVES are conditioned by four factors that must be carefully evaluated and resolved because they affect the QUALITY of them:
- Desires.- These do not have a direct technical correlation with Possibilities and Needs. As such they can affect the foundation of a Basic Strategic Principle: The balance between means and ends. On the other hand, Desires are an indispensable element in the formulation of objectives and their existence cannot be, much less, unknown. Expectations.- They have more technical foundations than Desires but they also generate an important bias. They can affect the Strategic Principle of balance between means and ends. Longings.- Particularly they have more power between people and in their social aggregate, but they constitute one of the least favorable elements for the technical-rational establishment of objectives. Dreams.- The gravitation that dreams have on the general progress of men can be explained philosophically, but for the purposes of setting goals and the need that they be achieved, they constitute one of the least favorable conditions on the quality of goals.
Taking care that the Sales Objectives are not conditioned by these factors, the process continues defining answers to the following questions:
THAN?
What do we want to sell?
- a) The Sales Strategy defines the Organization's efforts to manage ONE SINGLE BUSINESS, that is, a homogeneous operation of the Production and Sales functions. If the operation is not homogeneous in terms of these two functions, then it is likely that it is not a single Business and therefore you are required to define MORE THAN ONE Sales Strategy.
The What do we want to sell? You must narrow this down precisely.
- b) A second variable that is incorporated to address the question of What do we want to sell ?, is the manifest intention of many organizations to sell “something more” than what the product is physically proposing. In these cases, the intention is to sell rather a "specific function" or "added value" that the product can provide. It should not be forgotten that selling drills is not the same as selling “holes” and this distinction must be clarified in the answer to the question.
WHY?
Why do we want to sell this?
The production and sales functions improve the Business but do not explain it.
Every Business must support a Principle or a Sense for the activities it carries out. Probably this one has a simply mercantile or speculative orientation, but from then on it already constitutes a principle or a meaning that it seeks to make prevail in the Market.
No Sales Objective can be managed apart from a clear, precise and forceful answer to this Why.
HOW MUCH?
How much do we want to sell?
How Much Can We Sell?
How Much Should We Sell?
The answer to these questions must pursue the necessary Quantification of sales efforts. On very few occasions the answer is the same for all three questions. There are more frequent cases in which you cannot sell what you want or you MUST sell a certain level to protect fundamental interests.
WHEN?
When do we want the Sales Objectives to be reached?
The fulfillment of the objectives is a function of the volume that they have and of the time in which it is intended to achieve them. Based on the “quantity”, it will be necessary to evaluate later if the time is enough to meet the objectives.
WHERE?
Where do we want to sell?
A Business can be defined as such, that is to say as ONE in particular, when it is perfected through the Production and Sales functions in a geographically homogeneous market or one that constitutes a specific Geographic Unit. If this premise is not fulfilled, it can be argued that there is more than one Business, which in fact makes the Organization a Corporation rather than an Organic entity. In this case, a Geographically Diversified Corporation.
TO WHO?
Who do we want to sell to?
The Sales Strategy is very importantly conditioned by the definition of the individuals or groups of individuals to whom the strategic efforts are directed.
The higher the degree of uniformity of these objectives, the greater the guarantees of effectiveness for the Strategy, because in the end, it will be able to work with sufficient depth among the prospects, favoring actions aimed at dominating the market rather than those aimed at conquering it or establishing presence..
AGAINST WHOM?
Who does it affect or does it seek to affect the fulfillment of its own sales objectives?
When the sales objectives are established, it must also be established who are the competitors with whom the confrontation will take place and how it is intended to affect their interests for their own benefit.
Achieving your own sales objectives should always be understood as a process in which sales are "snatched away" from the competitor. In this sense, there are no considerations such as the one that suggests that own sales are, rather, an effect of market growth or demand for the type of product or service offered. This consideration has a completely neutral sense, because an eventual gap in demand (or unsatisfied demand), will try to be covered by one of the agents that compete in the market. If at a particular moment that is not happening, you are only proceeding to take away from the competitor something that he has “not yet” taken.
HOW?
How will we achieve the sales objectives?
Answering this question starts the final part of the Sales Strategy Implementation Process.
The answer to this question is based on the development of three stages:
1.- Definition of the Route or Path for the development of the Strategy (there are 4 options):
- Focusing efforts on Key Success Factors Taking advantage of any type of Relative Superiority Putting into practice Aggressive Initiatives Making Innovations
2.- Definition of the Strategic Approach or the Grand Strategy (one that in the course of the strategic campaign may involve more than one Individual or Direct Strategy).
3.- Definition of Individual or Direct Strategies.
Strategic Routes
Concentrating efforts on Key Success Factors.- It favors the use of factors that the Organization has determined as its own strengths. The mobilization of these factors gives solidity to the Sales Strategy, even more so if they are directed against competitor weaknesses. The Key Success Factors form a solid foundation on which the Sales Strategy can be developed.
Taking advantage of any type of Relative Superiority.- Taking advantage of any type of relative advantage is a strategic imperative and a constant in the conditioning of action. Taking advantage of the Relative Advantage, unlike the Key Success Factors, can mean a greater investment of effort and time for the Organization. It also demands better operating conditions for the Strategic Resources, which will bear the burden of the task in a greater proportion than that represented by the requirements of the Key Success Factors Route.
Putting Aggressive Initiatives into practice.- Aggressive Initiatives involve more risks, but they also promise greater results.
Aggressive Initiatives are more a matter of timing, and as such strategically useful. They are the strategies that receive the hardest answers on the market. This is something to be aware of and to be prepared for. It is difficult to measure the power of an Aggressive Initiative. Nor is it easy to calculate its scope. For all these reasons it is better to prepare for the greatest number of unwanted effects.
Making Innovations.- Innovations must present "news", "new things". This implies the presence of the Different, and when this is incorporated into the treatment of the Strategic in the business world, it almost always brings success. A different way of being is innovating, is doing new things. The new is always different.
Strategic Approaches
Sequential Strategies.- They are series of successive steps, each one dependent on the previous step, leading to a final objective.
The Approach, which relies on the existence of Sequential Strategies, normally addresses objectives that are difficult to achieve. And for this, it is necessary to mobilize the Organization's Strategic Resources in successive "batches", exactly as the waves of the sea unfold when they touch the beaches: one after the other, with rhythm and order.
Cumulative Strategies.- They are sets of actions, apparently random but actually planned to achieve results that progressively add up to those achieved before. Over time they produce great results.
Unlike the Sequential Strategies in which the strategic actions arrive: one, then another, then another, in the Cumulative Strategies the actions arrive: one more another, more another, more other.
Indirect or Deterrent Strategies.- They use psychological pressure to defeat the enemy, thus avoiding physical contact. These strategies emphasize political, economic, social, and psychological pressures rather than force, trying to throw the enemy off balance before the bulk of resources comes into action. Negotiations, Demonstrations of Force, Apparent Movements, Threats, etc. are very effective in these cases.
Alliance Strategies.- Alliance strategies do not occur frequently, and in all cases involve large movements and commitments of resources, objectives, plans, etc.
Counterbalance Strategies.- In the business world, some typical counterbalance strategies used to neutralize an adversary are found in the challenges of the rival's patents, trademarks, literary property, advertising rights, as well as in the introduction of products into the market. Directly competitive with the enemy fort (classic example of IBM attacking Xerox with the production of its own photocopiers).
Countervalue strategies.- In the business world, countervalue strategic actions are the neutralization of the competitor's main clientele by providing exclusive services to the competitor, or also the neutralization of the raw material producing centers obtaining or controlling their access..
Part Two: Component Elements of Sales Strategy II
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More details, book: “The STRATEGOS and the Sales Strategy. How to propose and execute the Strategy for the fight in the Market "
AUTHOR'S DATA.-
Carlos Eduardo Nava Condarco, a native of Bolivia, lives in the city of Santa Cruz de la Sierra, is a Business Administrator and Entrepreneur. He currently works as Manager of his Company, Business Strategy and Personal Development Consultant, writer and Entrepreneur Coach.
Author of the book: “Entrepreneurship is a way of life. Development of Entrepreneurial Awareness ”
WEB: www.elstrategos.com
Mail: [email protected]
Facebook: Carlos Nava Condarco - The Strategos
Twitter: @NavaCondarco
