What defines a sales strategy, exactly, and what primary sales strategies are today’s companies using to achieve results?
WHAT’S THE DIFFERENCE BETWEEN A STRATEGY AND A TACTIC?
To delve deeper into this question, it’s helpful to first understand the difference between a strategy and a tactic.
“Strategy is the ‘what’ part of the equation and helps you answer the question, ‘What are we trying to accomplish?’ Yet your business design may not be sustainable; you may have trade-offs for how you position your business with customers and competitors,” explains Erica Olsen, author of Strategic Planning Kit For Dummies, 2nd Edition.
“Every business has limited resources and deals with a competitive landscape. The more it does of one thing, the less it can do of another. This concept leads to tactics, or the ‘how’ part of the equation. Your tactics help you answer the question, ‘How are we going to accomplish our goal?’” In other words, Olsen explains that strategy is generally used to describe the high-level approach to reaching an end goal, while tactics are the specific actions undertaken in order to achieve that goal.
The Advertising Educational Foundation (AEF) offers a clear example of how strategy and tactic would differ within the same overall campaign:
- Strategy: “Convince consumers that XYZ candy is the best premium candy by associating with high-end people and entities.”
- Tactics: “Sample XYZ candy in high-end department stores,” and, “Put XYZ candy on the pillows of beds in high-end hotels.”
THREE LEVELS OF SALES STRATEGY
Strategies are, of course, used in myriad ways. There are growth strategies, marketing strategies, and overall business strategies, competitive strategies, and the like. Olsen identifies three levels of strategies employed by many businesses today, including:
- Corporate-level strategy – What does the company aim to achieve overall? Growth? Stability? Expansion into new markets?
- Business unit-level strategy – How will you compete? Top-notch customer relationships? Product or service leadership? Affordability?
- Market-level strategy – How will you grow? Through market penetration, development, diversification, or something else?
TYPES OF SALES STRATEGIES
Now that we’ve differentiated sales strategies from sales tactics, it’s easier to identify the common sales strategies employed by today’s forward-thinking sales organizations. Truthfully, there are a virtually endless number of specific sales strategies that companies can develop and use to drive business forward, but most strategies fall into one of several broader types including:
- Entering new target markets. This sales strategy involves identifying new target audiences and devising tactics designed to reach, engage, and convert those prospects.
- Introducing new products or services. In this type of sales strategy, companies are aiming to increase sales by increasing their product portfolios to either increase sales to the existing customer base (through up-selling or cross-selling) or increase sales to a broader customer base by attracting new prospects with unique solutions (products or services not currently offered).
- Increasing up-sells and cross-sells. While this sales strategy ties into the concept of introducing new products or services, up-selling and cross-selling can also be used as a stand-alone strategy with the existing product/service portfolio, with the goal of increasing the value of each customer by offering greater value in bundled products or services (thus incentivizing customers to make larger purchases).
- Increasing conversions and sales among existing prospects. If your company’s goal is to maintain the current target market and you don’t plan to introduce new products or services (or even offer bundled value packages), your strategy may be to increase sales in this existing market. A variety of tactics can be used to bring this strategy to fruition, such as ramping up customer experience, adding value through education and information, or revamping your value proposition or competitive advantage.
- Boosting repeat business. It’s pretty widely known that there’s a bigger ROI in retaining existing customers than acquiring new customers. Companies with a repeat business model (a subscription model or anything that involves repeat purchases) can boost sales and profits substantially with sales strategies aimed at increasing repeat purchases from the existing customer base. Such strategies may include efforts to reduce customer churn.
After identifying a broad strategy, complete with specific figures and goals (such as the number of customers to be converted in the next quarter or specific revenue generated through repeat business over a specified time frame), the sales strategy is then further refined to identify the specific tactics your sales team will use to achieve these goals.
There are endless tactics companies employ to implement sales strategies, leading to a unique and (hopefully) innovative sales process. Tactics such as price anchoring and product/service bundling, personalized offers and recommendations, and loyal customer discounts are used to further clarify the sales approach and create a clear vision for how your sales team will reach its goals. It’s during this step that the general types of sales strategies are fine-tuned to become the highly focused, meticulously planned roadmaps that lead modern sales organizations to success.