All SMEs want to grow sales but the reality is that a high proportion of SMEs do not for a variety of reasons, both internal whether through lack of planning and external because of strong competition and difficulty in accessing growth finance.
“Business schools can help in many ways from mentoring to short courses and workshops, often with external industry experienced sales professionals.”
A BIS report highlighted that almost half of all SMEs don’t plan which is a worrying thought, since an important driver of sales growth is planning that includes importantly building a sales strategy. A recent poll of SMEs attending a Forum hosted by Henley Business School at the University of Reading identified sales growth as a key challenge and that having a sales strategy was considered important to the majority of SMEs.
Recent studies have suggested that SMEs which have sales in the range £2m to £10m find it difficult to break through this range. These SMEs particularly are looking for growth in sales. Of course, in the absence of sales growth life becomes a challenge for SMEs particularly if they have invested in infrastructure in anticipation of growth in sales.
It was Guy Kawasaki, former Apple evangelist and founder of Garage Technology Venture in Silicon Valley, who said that growing sales fixes everything. LendMeYourLiteracy, a company that started less than two years ago, is an example of a small company whose CEO has built and is executing a sales strategy that is driving sales growth and enabling the business to access finance and create jobs.
The building blocks of a successful sales strategy
From my experience of working with SMEs, there are 8 building blocks to a successful sales strategy whether you are just starting out or looking to cross the difficult £10m barrier.
1. A clear business goal and underlying sales growth objectives
The cornerstone of a successful sales strategy is to know the sales goal, or in other words what exactly do you want to achieve, in the short term and long term and be able to answer the question ‘what is the goal of your business’.
The key requirement of a good quality goal is that it needs to be quantifiable and measurable to such a degree that it would be easy to recognise exactly what is wanted and to be able to know if it has in fact been achieved.
2. A deep understanding of the target customer group
This is about knowing who will buy your products and services in other words ‘who is the target customer?’ and what the target customer needs and therefore values.
Choosing the target customer and understanding what is of value to them is an important step in developing a successful sales strategy. Recently Prof Robert Simons wrote in the Harvard Business Review that the strategic choice of the primary customer is crucial to defining the success of the business and describes a simple framework to help companies build successful customer driven strategies.
Once the company knows its primary customer it can concentrate all its efforts in the right direction on the people that will buy and decide how it will approach them and with what sales value proposition. Data analytics is an important tool in uncovering and finding out about customer needs which every SME should have as part of its tool kit in developing a sales strategy.
3. Innovative products and/or services and a powerful sales value proposition
The late Steve Jobs said that ‘put the product first’ and ‘push for perfection’ which pretty much summarises this building block of the sales strategy.
The sales strategy must articulate the sales value proposition. The sale hinges on the strength of it. What is a sales value proposition? It is ‘a statement of benefits that fulfils the needs of the customer and creates value for the customer’.
4. Strong competitive advantages
Now that the company knows who its potential customers are it needs to determine its competitors that are currently or potentially selling to those customers. The question to have the answer to is ‘what are the competitors’ strengths and weaknesses’ that the company will need to sell against and exploit. There will always be competitors and it is naïve to think there are no competitors.
The message here is that the company needs to know its competition and how its products are different and better which is what makes the sales value proposition persuasive.
5. A clear route to the target customer market
How do you reach and sell to your customers? The choices include direct or indirect. If you are going the direct route will this be via a field based sales team, telesales or trade shows/exhibitions and similar events. Going direct is a model used by many manufacturers and of course retailers.
If you are a manufacturer, you might want to sell through an intermediary or channel partner this could be a reseller such as a retailer or local distributor for international markets where you will also benefit by partnering with the UKTI.
The internet and the company website has grown phenomenally as a route to market, seen as a relatively inexpensive route to sell to the customer with social media helping to attract and direct customers to the company website.
Henley Business School at the University of Reading
6. A well defined sales process, solid execution and excellent customer service
The selling process is the collection of activities that bringing about a sale. The selling process has been described in terms of the steps that define the activities from prospecting to closure of the deal.
“Preparation, professional conduct, questioning and listening (a crucial skills in front of customer), presenting your ‘sales value proposition’, closing the deal by skillfully overcoming objections are the competencies every SME should cultivate in its customer facing employees to bring about effective execution.”
An important part of the selling process is the face to face engagement. Russell Ward founder of Silent Edge, former Sales Director of Maid Plc and author of High Performance Sales Strategies says that in business to business (B2B) selling the time in front of the customer, which he refers to as the ‘critical hour’, has to be well executed. Preparation, professional conduct, questioning and listening (a crucial skills in front of customer), presenting your ‘sales value proposition’, closing the deal by skillfully overcoming objections are the competencies every SME should cultivate in its customer facing employees to bring about effective execution. Sadly in my experience few do!
7. Availability of resources, skills and capabilities
The SME needs to deploy resources (people and finance), skills and capabilities (e.g. sales planning and key account management) to sell its products and/or services. People need to be trained to sell and deliver excellent customer service. SME need to have mix of ‘on the job’ and externally provided professional training for its sales people.
8. A robust sales management practice
Some of the key questions that the sales strategy needs to address are in regard to sales management.
How is the sales target set? Sales targets need to be set with guidance from the top and worked bottom up and agreed by discussion.However the sales targets are set, the company needs to decide and communicate sales targets to all staff, which should cover precise performance targets and how these are to be achieved.
How is the sales performance reviewed? This is all about measuring. Tracking the key sales metrics will help deliver sales growth by alerting management to what is working and what is not. What metrics should be used? This is a common question asked by SMEs. There are at least 5 metrics SMEs should track – sales by month, sales by product or service, new versus repeat sales, sales per customer and the often overlooked metric sales per campaign or prior activity.
What can a University based business school do to help SMEs grow sales?
This is a common question that SMEs ask me. The answer is that business schools can help in many ways, from mentoring to short courses and workshops, often with external industry experienced sales professionals. Alumni are often involved in delivering these and are an invaluable resource for SMEs seeking to sell both in the UK and overseas.
The Henley Business School for example has launched a Berkshire Business Accelerator Programme targeting SMEs that covers sales strategy and sales management tools and is about to launch a regular workshop on ‘Winning at Customer Development’.
Why not get in touch with your local business school today to help develop the sales strategy that you need?
Forthcoming event for SMEs interested in learning about building a successful sales strategy
Working with the Thames Valley Berkshire Business Growth Hub and supported by Santander the Henley Business School is staging a speakers’ panel titled ‘Building a Successful Sales Strategy and Winning at Customer Development’. Aimed at SMEs the event features leaders of four rapidly growing SMEs talking about their sales strategy and how they are building sales. The speakers’ panel is to be held at Henley Business School, Whiteknights Campus Reading on Monday, 24 November 2014.
Jurek Sikorski is Business Development Lead and Executive in Residence at Henley Centre for Entrepreneurship at the University of Reading