What Is a Sales Strategy? How to Build an Effective Sales Strategy

Vũ Khôi

Author at Wotech Electronics Blog

Nowadays the market is highly competitive, so businesses need an effective, sound sales strategy to gain a competitive edge and increase revenue. However, not every strategy will work for your business. That is why in this article, SimERP will introduce you to the sales strategies rated best today, which are easy to apply across every product category.

What Is a Sales Strategy?

A sales strategy is a part of the overall business strategy that helps a business determine questions such as what products to sell, whom to sell to, which distribution channels to use, what selling skills, and so on — and to devise plans to solve those issues and increase the company's revenue.

The sales strategy is the guiding star for sellers, giving them the best approach to and persuasion of customers, thereby increasing the company's sales. Building a sales strategy aims to promote and introduce new products, win market share, and increase revenue. In today's competitive market, having an effective sales strategy gives the business many more advantages.

Benefits of building a sales strategy

Understand and satisfy customers

A sales strategy is drawn up based on research into the business's customers. Building and executing an effective strategy helps the business understand customers' behavior and desires in each stage of the purchase process even better.

If there are any changes, the business will record and analyze them to adjust the strategy to best fit. Sales staff will build sales scripts and approach each customer effectively. As a result, customers will be more satisfied when buying from the business. In turn, they will want to buy more and support your business more. The more orders, the higher the revenue.

Limit future risks

Sales strategies are always built on the results of analyzing data related to the market, customers, and competitors. In addition, businesses must also weigh future opportunities and risks when devising strategy. The company will therefore avoid risks that could harm the business and make its operations more sustainable.

Gain a competitive advantage

An effective strategy will naturally bring competitive advantages to the business. You will have talented human resources, find it easier to reach and persuade customers to buy, and maintain good relationships with them. These are things every business wants, but not many achieve. So if you possess these advantages, your business will find it easier to beat many rivals in the industry.

Steps to Plan a Sales Strategy

Assess your business resources

The first step in building any plan or strategy is assessing your business's resources — manpower, technology, network of relationships, and most importantly, finances.

The scale of the resources equals the scale of the sales strategy. If the business has strong resources, you can absolutely build a big strategy and even take a few slightly riskier directions. However, with limited resources, it's best to make careful, safe moves.

Analyze the market

When analyzing the market, you need to assess three main issues: customers, competitors, and the business environment. For customers, you need to clarify whether there have been changes in their consumer psychology and behavior, differences in the shopping habits of each target segment, and their needs when buying. As for competitors, the business should research the influential ones in depth, track their situation, and learn from the strategies they set. Many businesses have made a few mistakes, so you should study and find ways to avoid repeating those errors.

In addition, the business environment is very important. There will be changes in your market, such as new decrees and laws issued by the state, new infrastructure, and new technology. You should also track the industry's growth rate, trends, distribution channels, and so on, to devise correct strategies that adapt to and fit the environment.

Set the goals to achieve

Advice for businesses is to break goals down, with the time to achieve them kept short — around 1 to just over a year, or even half a year. This way, the business will find it easier to pursue and control its goals.

Businesses can apply the SMART model to set goals effectively, where:

• S – Specific: what your goal is

• M – Measurable: capable of being measured

• A – Achievable: attainable within your own capabilities

• R – Realistic: must be realistic

• T – Time bound: the time allowed to achieve the goal

>> Read more: What Is the SMART Model? The Meaning of the SMART Model in Marketing

Build and execute the strategy

Once you have identified your goals and resources, the business can get to work building the sales strategy. You need to prepare the following:

Financial resources

Specify things like the investment capital, analyze investment ratios, the break-even point, and plan how to divide the funds across the strategy's activities, with a usage plan for each fund.

Supply sources

The business needs to be careful in the purchasing stage because it directly affects your sales. Check which partners are reputable through online information, reviews from buyers, or by asking former partners directly. Today there are suppliers who use deceptive tricks to make you transfer money as they demand, or who ship poor-quality goods.

The advice is to choose a secure payment method, and report fraudulent behavior to the payment system when detected so you can recover your money. In addition, you should visit the production site to inspect their goods, buy in small quantities, and keep samples to compare against the next shipment. If the next batch is of lower quality than the last, you can file a complaint with them and request compensation.

Human resources

Employees play a very important role in every business. Even if the business sets a good, effective strategy, if staff are weak in skills and expertise, the strategy cannot succeed.

The business will train skills and expertise for its sales staff. From there, employees will understand customer psychology, know the customer-approach scripts, and have the negotiation and persuasion skills that get customers to buy.

Pricing and sales channels

For pricing, it's best to survey the market and ask competitors' prices to set the most reasonable level. Avoid pricing so high that customers don't want to buy, or so low that you don't earn much profit.

Choose different sales channels depending on the customer segment and the product. For example, with electronics products you must build a direct sales channel through the company's own stores, or sell indirectly through electronics supermarkets. In addition, using e-commerce platforms and building your own online store are also good options to consider, because consumers today tend to shop online.

>> Read more: Online Sales System: How to Build an Effective One

Advertising plan and promotional programs

You should have customer appreciation programs and discount events on special holidays to attract more customers. It will boost your revenue and create good relationships with customers.

In addition, advertising programs are no less important. Businesses should combine online advertising channels with offline ones to increase effectiveness. With offline advertising, businesses usually hold events, join industry fairs, and use posters, flyers, and so on to attract customers. For online advertising, you can use Facebook ads, Google ads, email marketing, SEO, and more.

Manage the activities in the sales strategy

Beyond building and executing the sales strategy, you must also manage the activities within it. Because if you don't manage the activities tightly, you can easily run into adverse problems in business and fail to handle them in time.

Management should be integrated with the use of supporting software to avoid confusion and errors. There are several effective sales management software solutions on the market today for businesses — one of them is SimCRM. With SimCRM, you can easily manage everything from sales and projects to customer and HR management. SimERP is currently offering a free 30-day trial package for businesses.

The Most Effective Sales Strategies Today

Direct sales strategy

The direct sales strategy, also known as personal selling, is used by many businesses. Staff talk and interact with customers directly and persuade them to buy. When using direct sales, the business can prepare scripts for staff in advance, or prepare no scripts at all and instead set up situations for staff to practice and apply when selling. Depending on the strategy, the company can use different methods.

Direct selling has stages such as approaching the customer, persuading the customer, closing the deal, and customer care. For each stage, the business will give its staff the suitable strategies. For example, when approaching the customer, the seller can ask questions to spark interest or give promotional gifts. And when a deal is closed and the sale ends, the seller can let the customer choose a payment method, give a promotion, or warn about future product changes.

Compare risks and opportunities

Many salespeople only introduce and dwell on the advantages and opportunities customers get from buying the product. Customers will feel skeptical about the truthfulness of that information and may refuse to buy.

To solve this problem, it's best for the salesperson to present both the risks and the opportunities of using the product, highlighting the opportunities, offering solutions to the risks, and comparing the two. In addition, you can compare with similar products so customers get a more complete view and form a good impression of your brand.

Product trials

Businesses should offer trial policies so customers can experience your product. Usually most businesses allow trials of 7 days to 1 month, so customers truly understand the product and decide whether to buy it. A few businesses have succeeded with this strategy.

For example, Spotify — a famous online music streaming platform around the world — launched Freemium so customers could experience the product for free, good enough with its basic features. However, users face limitations such as being able to skip only 5 songs per hour, no offline listening, and ads interrupting playback. After using Freemium and liking the app, customers will be willing to spend money on the Premium plan, at a reasonable cost, to completely eliminate the drawbacks above. This is exactly how Spotify attracts so many customers to use its product.

High-price sales strategy

How do you sell at a high price and still have customers want to buy? This is the question of many businesses when building their business strategies. Customers want to spend a moderate amount of money but get as much value and benefit as possible. So add extra value or bundled services to your product. Only then can you sell at a higher price than other competitors.

For example, when selling a customer a product with a base price of 9,000,000 VND, but shipping and delivery fees are 30,000 VND, installation fees convert to about 50,000 VND, plus supporting accessories worth 70,000 VND. Instead of separating out the fees, you can bundle them into a price of around 9,150,000 to 9,170,000 VND, including free shipping and delivery plus installation support and warranty. This way the customer will feel it is more reasonable and may buy from you.

Cross-selling

This is a way to persuade customers to buy additional accompanying products, in order to increase the business's revenue. For example, if you sell a tree but persuade the customer to also buy a pot, planting tools, fertilizer, and so on, that is cross-selling. When selling, staff should show customers the benefits the accompanying products can bring, supporting the main product the customer is buying. Cross-sold products should not be worth the same as or more than the product the customer has already chosen.

Upselling

This is the technique of persuading the customer to buy a product with a higher price and quality than their initial choice. For example, a customer wants to buy a stove manufactured in 2017, but the seller introduces a newer 2020 model with more features and a higher price — that is upselling. To upsell, the seller should point out the drawbacks and shortcomings of the product in question, while introducing the more premium product that solves those problems and meets the customer's requirements.

Conclusion

The sales strategy plays a very important role in helping increase a business's revenue and expand its market share. Planning a sales strategy, executing it, and managing it is by no means easy. Therefore, the business needs to study the internal factors — capital, resources, product — and the external ones — customers, the market, competitors — to come up with the best sales plan.

We hope that through the article above, SimERP has helped you gain useful information about building and executing a sales strategy.

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