STOCK MARKET BSE NSE

The need for a good sales strategy

Especially for start-ups, the sales capability has been a major reason for a company’s success or failure. Thus, building a well-thought-out plan is critical      
 

Published: 21st August 2020 07:33 AM  |   Last Updated: 21st August 2020 07:33 AM   |  A+A-

A successful strategy is when it delivers revenue. (Express Illustrations | Amit Bandre)

Sales builds revenue or value for a company and is the foundation on which a business exists. The sales strategy of each company is different and depends on its proposition. The strategy for an FMCG company selling bulbs will be significantly different than that of one selling perishables like food. Similarly, the sales strategy of a company selling engineering products like air conditioners and ventilators will be dissimilar to that of a services company like engineering services, software services, healthcare services, hospitality, etc.

While each company will build its own unique sales strategy, certain markers remain constant. Revenue projections and the order pipeline are good indicators of  the company’s performance, which also make it easier to attract funding. Therefore, building a well-thought-out sales strategy is critical. Customer needs: To build a sales strategy, it is imperative to know the customer of your product/service and his needs, and map it to your company’s offering that solves these needs. Most salespeople make the error 
of pitching their available product/service without under-standing the customer’s needs.

Even the market fit of a product is often driven by the sales strategy, giving credence to the customer’s budget or ability to pay, or even the functionality of a product/scope of a service. Thus, one of the key elements that should drive the sales strategy is targeting the ‘right’ customer whose needs can be addressed by the offering—else it will result in a “no”. Sales strategy/plan: Building a well-thought-out sales plan can make or break the company.

A complete understanding of your own product/service, delivery capability, after-sales support and positioning of your product is extremely important. It is also imperative that there is a complete understanding of the market—demand/supply, competitors/alternate solutions, the sales strategy of these competitors, strengths and weaknesses, etc., which all go into the pricing strategy There are several sales strategies that can be adopted:

A) Direct sales: Here, the product is directly sold to the customer through shops and door-to-door sales.

It is the “feet on the street” model. Ensuring that your product is displayed at a good, easily accessible and visible position in stores can improve sales considerably. Some companies like Eureka Forbes have excelled in door-to-door sales, while others like Amway have perfected the “home-to-home” model. These strategies have been used for both retail as well as business customers. Online sales through the company’s own website is an oft-used strategy. Direct sales models need to be bolstered by advertisements and ‘word of mouth’ feedback.

B) Indirect sales: Companies can adopt one or a mix of several strategies-

i) Distributors: Companies appoint distributors to market and sell their product. This provides them with a wider reach to the customers, quickly leveraging the customer base already developed by these distributors. They are focused sector-wise or can be exclusive to a company if there is a broad range of products.

ii) Franchising: Service companies, like computer training institutes, restaurants and food outlets have successfully adopted this strategy.

iii) Tie-ups with Amazon, Flipkart, Zomato, Swiggy, etc., that can “sell” on your behalf to the end customer works for many products.

iv) For products with perishable demand, strategies like real-time pricing or offering an upcoming or slow-moving company product as a free sample with a slow-moving product can reduce storage/inventory costs while providing publicity at low cost.    

v) Today, technology tools are leveraged commonly. Businesses like jewellery shops and real estate developers use virtual reality.

The team: Once the sales strategy has been developed, flawless execution is key. Building a strong sales team is key to the successful implementation of the plan. A team with the right experience and high energy levels are some of the hallmarks of a good sales group. It must be trained to understand the market and client expectations to effectively highlight the benefits/strengths of the product/service, while subtly highlighting  the weakness of a competitor.

For start-ups, the sales capability has been a major reason for a company’s success or failure. It cannot be overemphasised how important it is to focus on choosing, training, incentivising and monitoring this team. It is the most critical part of a CEO’s job. In fact, in many start-ups, the CEO/founder has to lead the company’s sales strategy and get on the road himself if required!

A successful strategy is when it delivers revenue. This needs constant monitoring and attention of the CEO and board of the company to ensure that the sales team is able to execute the plan to achieve the projections. A constant eye on revenue and the order book, almost on a daily basis, helps build healthy revenues.

Sales translates to the top line of the company’s P&L. This has to continuously grow so that the bottom line gives a profit. Truly, there is no other way to build a sustainable and growing company without the top line and the bottom line growing, as it is these profits that fuel the growth of the company. And this revenue-led “funding” creates the best value for the company’s shareholders.   

Padmaja Ruparel
Co-founder, Indian Angel Network, and Founding Partner, IAN Fund

(padmaja@indianangelnetwork.com) 
 


TAGS
Sales

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp