Go-To-Market - Elements of an effective sales strategy
A primer on B2B sales strategy and process
This is the third and final article of the GTM series. In my last two articles, we outlined the key elements of an effective GTM plan as follows -
Target audience
Buying center
Buyer persona
Buyer’s journey
Marketing Plan
Acquisition channels
Pricing and payment models
Value matrix
Message testing
Brand awareness and Demand generation
Content marketing
Sales Strategy
Choosing the right sales strategy
Analyze and optimize the pipeline
Tapping into the existing customer base
In the first article, we covered the first core elements of GTM - “Target users.” We discussed three critical tools (Buying center, Buyer persona, and Buyer’s journey) that can help us identify our target customers.
The second article covered the key components of a GTM marketing plan. We discussed the acquisition channels and briefly touched upon the pricing and payment models, value matrix, messaging and positioning, how to generate brand awareness, and discussed various content marketing aspects.
In this article, we will cover the last core element of a GTM plan - sales strategy. We will cover the different sales strategies that you can choose for your product, the importance of analyzing and optimizing the sales pipeline, and how we can tap into the existing customer base for up-selling and cross-selling complementary products.
Let’s jump in.
Choosing the right sales strategy
Typically, your sales strategy will depend upon various factors - complexity of the product, average ticket size, sales volume, and sales cycle.
There are four widely known and used sales strategies: catering to a different product and business model.
1. The self-service model
As its name suggests, in a self-service model, buyers purchase products on their own. You don’t need any sales team as such for this model. Such a model works well for low complexity products with low price points and high volume sales.
Typically B2C products fall in this category. Think about - Netflix or Amazon.
While you won’t need a sales team, the customer acquisition will predominantly depend upon the marketing team to drive traffic and conversions to your site. Your marketing team should consist of growth marketing, performance marketing, and content marketing.
2. The inside sales model
The inside sales model is used when a prospect needs to be nurtured by a sales rep to convert into a deal. This type of model works well with a product of medium complexity and price.
Inside sales reps often sell remotely, typically from within an office, while the outside sales reps travel, brokering face-to-face deals.
In the inside sale model, the sales cycle ranges between a few weeks and a few months.
This model can be very profitable and is relatively easy to build and scale as you hire more team members. The sales team in this model comprises a sales manager that supervises a handful of reps.
3. The field sales model
The field sales model is required when you need an organized sales team to close large enterprise deals. These models typically fit complex enterprise products with high ticket size and low sales volume, which means there’s typically a low volume of deals with a long sales cycle.
This model is easy to build but difficult to scale because it takes time and money to hire and train a full sales organization.
4. The channel model
Finally, in the channel model, you tie up with an outside agency or partner to sell products on your behalf. This is a very effective model when you don’t have a lot of budget for the designated sales team.
This model works well when a product matches a partner’s interest or inline with their business startegy. This typically enables companies to opt for a sell-through model.
All these strategies can be mixed and matched based on the product, competition, and market. The key is to figure out what works best for your company and product.
Analyze and optimize the pipeline
Choosing the right sales strategy is not enough in order to achieve sustainable growth. You need to monitor your sales pipeline and optimize wherever possible continuously.
The best way to go about it is to set up KPIs and measure them continuously. The typical KPIs for a sales team are sales volume, conversion rate, and time.
Credits - hubstpot.com
You need to measure how deals enter into the top of the funnel, then track how many closed/won deals come out of the bottom of the funnel. Conversion rate is usually the metric used for this.
You should measure the conversion rate between various stages of the pipeline and identify which stage the opportunities fall out and why. You can also measure this performance by each sales reps to identify personal coaching and enablement opportunities.
Credits - hubstpot.com
Another critical goal of your sales team is to shorten the sales cycle as much as possible. For that, you need to track the amount of time it takes for an opportunity to enter the sales funnel and get converted to a closed/won deal.
Your goal should be to optimize and shorten the conversation between stages. This can be done by identifying common bottlenecks (and iterating ways to eliminate them before they happen), doing ongoing lead nurturing, and brainstorming ways to find the best-fit customers.
Tapping into your existing customer base
A very efficient yet underrated way to earn revenue is to tap into the existing customer base for renewals, cross-selling, and up-selling. A common adage in the industry is that it costs seven times more to acquire a new customer than to do business with an existing customer.
That's because if you're providing a great buying experience, existing customers already recognize, like, and trust you. Building the initial relationship is way more difficult than nurturing the relationship once you have already established credibility.
Once you have customers, you know their needs, goals, and preferences. Also, your customers act as the advocate of your product. This strengthens the connection between their company and yours.
Additionally, when you are expanding the account with complementary products, you are essentially making it difficult for your clients the switch to another vendor and thus improving the overall retention of your product.
Conclusion
Great if you have reached this far. We discussed common sales strategies, the need to analyze and optimize the sales pipeline, and the importance of renewals, upselling, and cross-selling complementary products.
This also concludes the discussions we started on the Go to market. In this three-part series, we covered the key elements of an effective GTM plan and discussed how to devise them. Before I wrap this up, here are the links to the three articles of the GTM series -
Sincerely,
Arkapravo
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