Sales Channel Strategy for Business Success Pt 1

Capture and Use Detailed Market Information

A broad and deep understanding of the market is critical to the creation of a sustainable market position. Winning marketers have developed a ‘map’ of their market, including the most actionable segment definition, profit potential, buying behaviours and decision processes, size, outlook, needs, expectations, competitive dynamics and sourcing preferences. The market map provides an objective context for internal discussions regarding strategy alternatives and resource allocation decisions.

Accelerate the Planning Process

Markets are changing faster than ever before and so must your planning process. You cannot get caught in the never ending cycle of analysis planning that is characteristic of many organizations today. The planning process of the future is one that is decision centric, rather than analysis centric. The planning process should be designed to use the existing body of knowledge of your organization. Senior managers should be more involved, and involved earlier, in your annual planning process.

Rather than a management meeting to culminate a lengthy analysis conducted by several layers of the organization, the plan should be initiated by senior management. Use the senior management meeting to kick off the planning process and define the strategy, then let the organization validate the assumptions. The result will be a quicker developed plan, much more reflective of current market reality, and one in which senior managers are much more invested.

Streamline Your Organization for Speed and Flexibility

Effective market management will require speed in decision making and flexibility in action. An organizational structure that supports this will consolidate channel management under one group within the organization.  In addition, consolidating all products, programs, and channel relationships will serve to enhance your market power.

Regain the Power of Your Brand

One of the most vital tools you have to retain customer relationships and power in the marketplace is your brand. Therefore, you will be well served to reinvest in establishing brand value. This will be done by clearly articulating the value your brand stands for and consistently delivering against this value. Brand value will be a powerful tool to secure your market presence.

Win at the Local Level

A local market management philosophy may be the single biggest factor that separates the winners today. Customers have a wider range of channel choices than ever before. Information is more widely available. Customer segments are using these choices and information to evolve their buying behaviours in different ways and at different rates. The result is that the ‘map’ of local markets is likely to vary widely, and the most appropriate channel strategy is likely to vary significantly from market to market. The successful marketer will recognize these differences. Local market managers will be given the autonomy and flexibility to customize the local channel strategy to local conditions.

Corporate policies serve as a set of guidelines and programs serve as a menu from which the local manager designs the unique channel mix to optimize share and profitability. Winning marketers have recognized that it often requires different skill sets and compensation for the local market manager operating under this model versus a traditional sales capacity.

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Boost Profits In Four Simple Steps

One of the most common mistakes companies make when they are trying to boost their profits is to try and get new customers. Typically this behaviour is a reflection of their history. When they were new, they probably had zero or just a few customers. To survive, they had to get more. Getting new customers made sense.For companies that are out of survival mode, and are instead trying to boost their profitability, acquiring new customers is not the best strategy.

Studies by Cap Gemini and Gartner Group have shown that depending on the industry, it costs 3-7 times more money to acquire a new customer than to get an existing customer to make a new purchase.The best profit boosting opportunities lie in optimising the relationships you have with your existing customers. Here are four simple steps to do just that.

Find and Strengthen Your Pillars

Do you know which five of your customers contribute the most to your bottom line each year? Can you name them off the top of your head? Can all the employees in your company name them? If not, that is a problem to be addressed, and addressed quickly.

Depending on the size of the organisation, a loss of any of the top five customers can range from serious to catastrophic. These clients are the pillars supporting your company. Think of your business as a structure sitting in the middle of shark infested waters. Five pillars are arranged in a circle and your business balances on top of them. What happens if one or two of those pillars shrink. What happens if one of them goes away completely?

Part of the key to optimising profits is securing your pillars. If you look at the amount of time your organisation spends on customer service, and break it down by customer, would you find that your “pillars” are the five customers who get the most service?Most likely they do not. “Problem” customers usually command the most attention, followed closely by efforts to get new customers. Change that. Focus a proportionate amount of attention to customers based on how critical they are to your business.

Take the resources being applied to the problem customers and focus them on the pillars. Task those people with making your relationship with the pillars so strong, that they will never crumble. Challenge them to find ways to help the pillars be successful. Be a pillar to your pillars. 

Inventory Your Offerings

Starting with your pillar customers, take an inventory of all the products and services that you currently provide. Rank them in order of profitability. When all the offerings have been identified, categorise them from one to five. Ones should be the twenty percent of the offerings that are most profitable. Twos will be the next twenty percent, on down to five, which will be those products and services that are in the bottom 20% in terms of profitability.

Now comes the interesting part. Create a grid with clients across the top, and offerings down the left side. Arrange the clients in order of how much they impact your bottom line. The client with the most impact should be the first one, and the least impact client should be the last. For the offerings, which are on the left side of the grid, keep them in order of most profitable to least profitable.When you have finished creating the grid, go through and for each client put check marks on the products and services you provide for them. This is your profitability map.

Attack the Gaps

Look at your pillars. How are you doing in terms of providing your full suite of offerings to them? Any boxes without checks represent an opportunity for you to solidify your relationship. Start with the offerings that are ranked low and not being used by your pillars, and focus on getting those blanks filled in.Now look at the rest of your map. Where are the check marks? Where are the gaps?

Every gap represents an opportunity to boost your profits. Start with the more profitable clients, and try to fill in all the ones and twos. Educate those customers about the additional products and services you offer. Find out what needs they have and identify ways you can fill them. These efforts will not only strengthen your relationship, but it will also make them more profitable clients for you.

Learn From your “Lovers”

As you are implementing the above step, take another look at your graph. Find the five customers who use the greatest percentage of your products and services. These are the customers who just love what you do. They represent a tremendous learning opportunity.There is some reason or group of reasons that these customers love you so much. If you can find out those reasons, you can apply that knowledge to the way you interact with the rest of your customers.  

Perhaps a particular salesperson has figured out something that is really working. Maybe the account representative or customer service contact is particularly good. Whatever the reason is, you need to know.Interview those “lovers” and learn from them. If they say it is because of a particular person in your company, interview that person and find out what they do that is working so well.

Within those interviews lies profit boosting information. Gather it and then apply the learning to the way you interact with your other customers. Again, start with the pillars and then work your way across the customer list.Most organisations acquire customers by filling a single particular need. The key to boosting profits is not to go out and get more of those customers. Find and strengthen your pillars so that your organisation is well supported, inventory your offerings, fill the gaps, and learn from your “lovers”.

These four steps are the way, to boost your profits and to ensure business success.

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http://business-success22.blogspot.com