Strategy = Execution

The 10 main principles governing sales

The 10 main principles governing sales

In paragraaf, 5.1 over bouwsteen 5 (MUST HAVE), schrijven wij dat elke organisatie voor elk vraagstuk een aanpak en expertise op maat moet kiezen. Voor de meest voorkomende typen vraagstukken hebben wij per type de tien belangrijkste principes die in de praktijk keer op keer belangrijk blijken, op een rij gezet. Dat hebben wij gedaan voor respectievelijk verkoopvraagstukken, Lean, postfusie-integratie- en holdingsynergievraagstukken, structuur- en besturingsvraagstukken en cultuur- en gedragsvraagstukken.

  1. Know Your Sales Division’s Basic Facts

    1. Main Structure, ‘Cut’:
      1. What is your market share?
      2. What market position are you aiming for?
      3. How deep is your market penetration?
      4. What are the market dynamics, what have they been historically and how are they likely to develop in the future? Is there significant fluctuation, and if so, why?
    2. Competition
      1. Who are your main competitors? What is their market share?
      2. What is their strategy?
    3. Consumer Behavior
      1. What are the main drivers behind your sales?
      2. Who influences the decision to buy? How does this influence manifest itself?
      3. Is there a lot of fluctuation in your customer base and are you losing customers (attrition)? If so, why?
    4. KPIs
      1. Sales per product category (or per customer segment)
      2. Gross margin and net margin, if available
      3. What is your credit note to order ratio?
      4. What is your quote to order conversion rate?
      5. What is your delivery to stock/delivery to project ratio?
      6. How many complaints are received per month?
      7. How many clients a day does an individual salesperson visit?
      8. How many salespeople work as inside sales reps?
      9. How many of your people work as outside sales reps?
    5. Organization
      1. How is your sales division structured?
      2. How are the roles divided between inside and outside sales?
      3. What are your people’s sales pitches generally aiming to achieve?
      4. What outbound sales services does your inside sales force perform?
      5. How much time (in percentage of total work time) do your inside and outside sales teams devote to prospects, existing customers and other parties in the sales chain?
  1. Set Clear, Sharply-Defined Goals

Your goal is to create a smarter, more professional organization that
runs on enthusiasm and drive.

    1. Restructure your sales division so it:
      1. best serves your most important customers;
      2. serves customers who contribute little or nothing to your results as cost-efficiently as possible (or not at all);
      3. identifies, selects and optimally serves prospects.
    2. Identify sales opportunities in your existing customer base in order to:
      1. leverage all cross-selling potential;
      2. leverage all opportunities in specific customer segments.
    3. Optimize your processes and divisional structure to make it as effective and efficient as possible.
    4. Create a simple, clear management structure.
    5. Foster enthusiasm and professionalism on your sales team(s) and make sure your salespeople:
      1. take ownership of the project and deliverables;
      2. understand and apply the new way of working and know how to explain it to their co-workers;
      3. learn from the project and are able to professionalize further under their own steam;
      4. enjoy their work more and feel more successful.
  1. Identify the Breakthrough

      1. Breakthrough potential should be the core of your sales process.
      2. Here are the areas where you can typically find a breakthrough and increase your productivity or profit.
      3. Effective sales time: just 30% of all your activity is sales. The other 70% makes no direct contribution to sales.
      4. Order processing: order/contract processing is too time consuming.
      5. Alignment: effective collaboration between roles and departments requires too much time and effort.
      6. Reactive thinking: a lack of proactiveness creates too few opportunities.
      7. Customer focus: account managers spend too much time on the wrong customers.
      8. Conversion: offer to contract ratio is too low.
      9. Pareto principle: 20% of your customers generate 80% of your sales turnover.
      10. Segmentation: different customer segments are lumped together in the same system.
  2. Analyze and Restructure Your Entire Sales Model, From Strategy to Performance

    1. Sales Strategy
      1. Mission, vision and core values
      2. Market definition, market share and positioning
      3. Strategic goals and horizon
      4. Competition strategy
      5. Segmentation and differentiated service concepts
      6. Portfolio and proposition
      7. Revenue model and pricing
      8. Multi-channel mix
      9. Service level differentiation
      10. Strategy substantiation and operationalization
      11. Linkage to company strategy
    2. Sales Process
      1. Customer focus
      2. Process differentiation, standardization and optimization
      3. Added value
      4. Collaboration with other departments
    3. Structure and Governance
      1. Marketing and sales force: size, roles and responsibilities
      2. Planning and performance management (including forecasting, territory/ account planning, lead management, partner management)
      3. Sales and margin results and development per customer, segment, channel and product or product category
      4. Customer satisfaction, retention and acquisition
      5. Sales funnel dynamics (conversion into activities and lead time)
      6. Target-setting variables and commission / bonus return
      7. Predictability and stability, cash flow
      8. Realizing positioning potential
      9. Effectiveness of lead generation tools
    4. HRM
      1. Coaching / mentoring
      2. Leadership
      3. Bonus / commission tables
      4. Profiles
      5. Development
      6. Effectiveness of sales team
    5. Technology and resources
      1. Account management methodology
      2. Sales performance management methodology
      3. IT use, business alignment and integration
      4. Standardized formats
      5. Customer and market data (business intelligence and KPI dashboards and reports)
    6. Knowledge & data
      1. Product and services knowledge
      2. Social selling knowledge
      3. Corporate knowledge
  1. Make Digital Sales and Marketing the Spearhead of Your Sales Strategy

Customer-oriented processes

Digitalization heightens the customer’s total value perception. That’s the main reason why digitization is necessary. This has an impact on every process in your organization. Every digitizable process should be digitalized. While increasing customer value perception, digital technology and tools have another, distinct advantage: they increase the speed and efficiency of every process in the value chain.

Processes: Customer processes are the customer-perceived value. In digital business processes, the customer journey is the main driver. McKinsey consultants always base their key conclusions on a firm foundation. They prove that you can significantly improve the customer journey by digitalizing processes. Their clients report increases of up to 20% in customer satisfaction. But the best thing is that they also see a 10 to 15% growth in revenue as well as cost reductions of 15 to 20%.

This increase in customer satisfaction is a direct result of new and better ways of fulfilling customers’ needs. The customer journey must drive all processes, but especially when digitalizing those processes. Every process must contribute to the perceived value that customers seek. Well-thought-out and well-executed digital innovation satisfies customers’ deeper needs, builds community and enhances the perceived value.

What’s happening here is fundamental. Customer perception determines your product’s value and hence is the product. The traditional marketing paradigm was all about creating customer loyalty by keeping them within the circle. In essence, this is a negative approach in which the company drives up switching costs, diverts customers’ attention from alternatives and pushes customers towards the needs the company can meet. In the new marketing paradigm, you take a deep breath and accept that customers have, and deserve, the right to switch providers any time they please.

Organizations have to anticipate this as best they can and seize any opportunity they see. But one promising fact is that in the digital era, the number of interactions with customers increases from 3 to 11. The trick is to devise new revenue models that can capitalize on the opportunities this opens up.

Most business processes have been automated. Similarly, digitalization has everything to do with the need for automation. It cuts both ways: if well executed, automation enables you to leverage scaling and efficiency. For example, automation makes it possible to increase efficiency by means of deduplication, data collection at the source of every key process, elimination of errors and the decrease of lead and processing times by straight-through processing.

 

  1. Base Your Analyses on Hypotheses

Time Spent Analyses are comprehensive and time-consuming, but provide many useful insights.

      1. Hard insights Insight into the time every department spends
        1. Time spent per task
        2. Number of tasks
        3. Number of interruptions
        4. Time spent per channel
        5. Time spent per product
        6. Time spent per region
        7. Time spent per type of customer
        8. Insight into how every department communicates
          • Media used
          • Communication per type of customer
      2. Soft insights
        1. Awareness of the time required for each task
        2. Generates a sense of urgency

 

  1. Make Customer Segmentation and Service Concept Differentiation a Main Focus of Your Sales Strategy

Segmentation is based on the generally accepted idea that ‘the more important the customer, the harder you’ll work for them’.

      1. Segmentation is comprised of two elements:
        • Identifying customers’ relative importance
        • Determining the lengths to which you will go for them
      1. Segmentation is meant to utilize your sales resources more
        efficiently and effectively by:
        • giving your sales efforts a clear focus; making clear which sales tools should be used for each type of customer
        • turning strategic choices into executable sales activities

The value-added method is a tangible operationalization of the customer segmentation idea.

      1. A customer’s relative importance is determined by plotting the customer’s current value and future value on the two axes.
      2. Sample categorization of segments:
        • Embrace / care for / build / dismiss, analyze critically
          • Build prospects / analyze prospects critically
        • Decide which customers you want to serve in the same way by subdividing them further:
      3. Segment existing customers based on their current and future value
        • Segment prospects based on their potential value (current value = 0)
        • Using potential value enables a directional customer approach
        • Current and future value result from criteria, based on elementary or Boolean algebra
      4. Link your customer segmentation to service concepts by defining which sales instruments are to be used for each segment. By establishing service concepts, you can estimate the time and money spent on each customer.

 

  1. Check Whether the New Way of Working Enhances Your Two Key Levers: Effectiveness and Efficiency

A Sales Excellence Program increases sales by optimizing sales effectiveness and returns. The formula for sales excellence is:

Sales effectiveness increases profit
+
Return on sales processes, reduction of sales costs
=
Sales Excellence, Improving your sales results

  1. Write Your Business Case

Your business case quantifies the qualitative breakthroughs, sets targets and establishes an outlook for the organization.

  1. Apply the Accelerators in This Book to Your Specific Sales Issues.

Strategy = Execution. Improve, Renew and Innovate Faster

How can organizations make strategy execution their number one priority? And improve, renew and innovate faster? This I describe in my book Strategy = Execution. Strategy = execution is based on the research that Turner started years ago into the success factors of strategy execution and innovation. We interviewed 60 directors and professionals and analyzed more than 75 cases, 300 relevant books and articles.

  • More about Jacques Pijl (author) and Turner Consultancy.
  • The most popular interventions based on Strategy = Execution
  • 24 endorsements from organizational leaders
  • American management book of the year 2021, no. 1 in the category of strategic management, in the top 100 bestseller, seventh edition, translated into: English, German, Spanish, Russian and Bahasa.
  • Selection of the most important management books according to CEOs of innovative organizations (FD New Champions). Included in library of classics (mb.nl).
  • Nominated for Management Book of the Year.
  • Countless articles and interviews in FD, Emerce, Frankwatching and CFO.
  • Numerous Ted Talks and in-company workshops at the top 25-50 organizations, average rating 8.7.
  • More about Jacques Pijl (author) and Turner Consultancy
  • The most popular interventions based on Strategy = Execution
  • 24 endorsements from organizational leaders
  • American management book of the year 2021, no. 1 in the category of strategic management, in the top 100 bestseller, seventh edition, translated into: English, German, Spanish, Russian and Indonesian.
  • Selection of the most important management books according to CEOs of innovative organizations (FD New Champions). Included in library of classics (mb.nl).
  • Nominated for Management Book of the Year.
  • Countless articles and interviews in FD, Emerce, Frankwatching and CFO.
  • Numerous Ted Talks and in-company workshops at the top 25-50 organizations, average rating 8.7.

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