Less is more when it comes to sales planning and market segmentation
Monday, October 29, 2018/
Less is more when it comes to doing good strategy, sales planning and market segmentation.
As Michael Porter, Professor at Harvard Business School and ‘father’ of competitive strategy, says:
- “The essence of good strategy is choosing what not to do”;
- “The essence of strategy is that you must set limits on what you are trying to accomplish”; and
- “Strategy 101 is about choices. You cannot be all things to all people. It’s about making choices, trade-offs. It’s about being deliberately different”.
This is the essence of good strategy, yet time and time again we see many sales teams experiencing FOMO (fear of missing out) when it comes to developing a targeted sales strategy for the next year or two. When asked to put a targeted sales plan together, focusing on those key target markets that are deemed to be the most relevant to go after, we hear many salespeople saying things like ‘oh but what about this market or that one?’, or ‘we can’t leave them out’, and so on.
In scrambling for leads, trying to cover every area and reach everyone and not wanting to miss anything, many sales teams are trying to be all things to all people, yet end up doing nothing particularly well.
When it comes to good strategy, and effective sales planning and market segmentation, sales teams need to go laser.
A case study
Take this example from 2015-16.
Background: the end of the mining boom in 2015 meant many businesses selling into and servicing this sector were facing very tough times. A lot of sales opportunities appeared to have dried up. People were trying all sorts of things including lots of heavy discounting, but even that wasn’t working.
In August 2015, we were approached by a company that sold quality consumables and capital equipment in the mining sector. They were looking for sales training. Long story short, I asked them if there was “gold still in them thar hills”, to which they replied, “we are not sure, and if there is we don’t know where to start”.
There is no point in training anyone in sales if we do not know where we are going.
As Henry Kissinger said: “If you don’t know where you are going, every road will lead you nowhere”.
The sales team was not large, about six or seven salespeople in the field. So they had to think strategically about how they were going to deploy their sales efforts. Going splat, spraying at everything was not an option (by the way, it is never a good option to go splat).
So the number one task was not training. The number one task was to undertake a thorough analysis of their markets and segments, and their sales strategy. If there was an opportunity to be had in these markets then where was it? What did it look like? What did they need to offer?
We had to examine each market segment, sub-segment and micro-segment in detail from a range of perspectives. This ‘3D’ view of market segments uncovered and highlighted key information that allowed this business to build a detailed sales strategy and go-to-market sales plans per segment.
This highly targeted plan for each segment clearly guided and specifically directed the efforts of the sales team to find a profitable and sustainable business. For example, in exploration and production drilling they narrowed their focus to certain types of businesses only.
The second priority was to enlist the support of the customer service and field teams — technical managers, site supervisors and customer service people who were in direct client facing roles — and let them know about the new sales strategy and plan and how they could contribute. The client brought everyone onto the tailored sales training program, along with the sales teams. They equipped them with the knowledge about the new strategy, the sales market segments and specific businesses they wanted to target, as well as the skills and processes to deliver the results needed to thrive as a business.
Without hiring a single salesperson they, in effect, doubled the size of the sales team by getting everyone in client-facing roles on board.
Within eight months this business and its team were able to significantly turn around its sales results by taking a laser-like, disciplined approach to prospecting and selling.
They went from being severely in the red and behind budget, to being 16% ahead of budget in less than a year. They proved less is more, focussing on those parts of their market they had identified, and having the whole business concentrating their efforts on the opportunities there.
By taking this laser-like approach to planning and selling, this sales team (salespeople, technical managers, site supervisors and customer service team) found and won a number of large profitable sales even in declining, highly competitive, commoditised market segments and started to win the share of mind battle with their clients and prospects because they had done the strategy work and understood where they needed to target their efforts and how to execute their sales plan with precision.
So the lesson is: don’t go splat, go laser.
Remember everybody lives by selling something.