Business Plan Series: Part 7 – Sales and Marketing – Sales Strategy

Last time in Part 6, we discussed how to discuss your marketing strategy with investors. This included your approach, penetration strategy in addition to growth and communication strategies. But what is marketing without sales? Many say sales is marketing with actually asking for the close. I disagree and while they are closely intertwined the skills and goals are completely different.

Marketing strategy deals with broader markets but the sales strategy focuses on the individual..

Sales Strategy is separated into four major areas in the Sales and Marketing section. They are:

1.) Direct Sales Force Strategy
2.) Indirect Sales Channel Strategy
3.) Sales Prospecting Strategy
4.) Sales Campaign Strategy

So let’s talk about the first one, Direct Sales Force Strategy. This is about demonstrating how a direct sales channel is internal and is focused on signing new customers. The advantages to this approach allow a company to focus resources like account managers and bonus them based on achievable and measurable goals. The disadvantage is the overhead entailed with managing a direct sales force and waiting for them to produce. One approach to this strategy is to find more experienced sales managers who have sold in a respective industry and for entry level sales people to be trained and molded to sell your product(s). You also need to discuss compensation which includes possibly a base salary and a bonus based on performance. You should show growth numbers and plans to leverage that increase in staff.

Related to the “Direct” approach is the Indirect Sales Channel Strategy. This is really focused on the various sales channels you can leverage to increase your sales success. For example, this could be resellers, franchise partners and licensed partners. You will want to discuss the type of partners, how many and the regions you will leverage and the growth strategy attached to the revenues you expect these indirect channels will produce.

Once you have defined your sales channels it will be time to craft the proper processes to do prospecting. This Sales Prospecting Strategy will be supported by a direct sales force, indirect sales channels and supported by direct mail, web advertising, and search engine placement. To build our sales prospects to a quality level, one strategy is to offer free access or use to the first group of clients (10 or 100) that sign with you. You should identify how you will create these lists of prospects. Sources include membership directories, trade show lists, Hoovers and even D&B.

Finally, you will connect the dots of how you will utilize your direct sales force, indirect channels and prospecting processes to run campaigns that are effective and meet the numbers set in the financial projections. This Sales Campaign Strategy is designed to layout a clear direction in which to maximize all resources at your disposal with clear campaign ideas, messages and target markets/customer groups.

As you write these subsections always keep in mind how sales leverages marketing and supports the long term goals of the company. We will cover Operations next time in “Part 8-Operations Strategy and Processes”.

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Business Plan Series: Part 6 – Sales and Marketing – Marketing Strategy

Last time in Part 5, we discussed how to evaluate and present the competition in a manner that allows your company to stand out. Now that you have covered who you company is, what it provides and how you stack up against the competition, it is time to show how you market and sell it to the rest of the world.

Part 6 and 7, will cover the Marketing Strategy and Sales Strategy which is usually combined in a business plan. This is to allow sufficient discussion in each area and not make the posts extremely long.

Marketing Strategy is separated into four distinct areas in the Sales and Marketing section. They are:

1.) Market Profile and Approach
2.) Market Penetration Strategy
3.) Market Growth Strategy
4.) Market Communication Strategy

So let’s talk about the first one, Market Profile.
Market Profile is the discussion of the types of customers in your initial markets. This sets the stage for how and why you will market to them in various ways. You should talk about how many potential customers exist that you could sell to. You should discuss how big the market potential is and how much of that you think you can capture. Be sure to be able to back up your numbers and not say things like “1% of a $1 billion market”. That won’t work and no one will take it seriously.

Next up is Market Penetration Strategy and the focus is how you will use your unique value or selling propositions to create a compelling story that sells your customer on your business. The whole point is to discuss how fast and how deep you can get in there and market to acquire new customers.

Once you enter the market, you need to grow our current and future opportunities. This is the Market Growth Strategy and includes both retaining and acquiring customers through various growth strategies. These growth strategies can include expanding product and service offerings, expanding into new verticals or even expansion through new locations or franchising.

As you continue executing your marketing strategy, you will need a solid communications strategy that includes public relations, product marketing, creating tactical selling tools and an online marketing strategy.

As you write these subsections always keep in mind how this ties into an overall selling strategy and we will cover this next time in “Part 7-Sales and Marketing Strategy-Sales Strategy”.

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Business Plan Series: Part 5 – Competitive Landscape

Last time in Part 4, we discussed how to present your products and services. It was important to follow up the problems with your solution but in this part, Part 5, we will attack the competition – the competitive landscape.
This section covers how you are differentiating yourself by describing the competition and why you will stand out from them and beat them in the long run.

There are a few key sections of the competitive landscape in a business plan.

The first is Competitive Analysis Summary. The point of this section is to give some one reading this without diving into the details the top points and reasons that your company is different and beats the competition. Hopefully, this section will be compelling and interesting enough that people will read into it more. Most likely, people will not read to deep into the competition but it is there for review when necessary and is an exercise you must complete.

The second is Competitive Analysis Matrix. This can be done in table format with the main competitive areas and companies on different axis. Many times people will spin the diagram so your company has all the boxes checked. Don’t do this. Be honest and recognize the 800lb gorilla. Don’t fear them, understand how to beat them.

Once you are done the summary you must go into more details regarding competitive advantages and competitive disadvantages. Hopefully, the advantages will out weigh the disadvantages.

Competitive Advantages
are the ways that you stand out from the competition. Examples could be the following:

  • Integrated Payment Processing for Credit Cards and Checks/Wire Transfers
  • Streamlined marketing systems that integrates popular third party data
  • High performance reporting and business intelligence analysis capabilities
  • Ability to market in real time
  • Providing a branded and personalized portal interface for X
  • Building a patented technology to be licensed and integrated with major technology platforms and portals
  • Flexible foundation technology designed to expand into other types of alternative services
  • Providing an outsourced call center to assist companies with customer service requests and after hours client management
  • Ability to leap frog our competitors who have designed their systems on an outdated business model

Competitive Disadvantages are the threats and adversity you must overcome from the competition. Examples could be the following:

  • Segment is extremely fragmented making any type of scale difficult
  • Our market penetration is shallow at this point
  • Our track record and reputation in the industry is unknown
  • Product Development in proof of concept phase behind one competitor
  • Larger competitors could invest lots of money to compete very quickly

Last on in this section is the best way to wrap it up. This are the Barriers to Entry that will make you a real threat to the competition. Examples could be the following:

  • Low cost offering of superior technology to lock in a provider network
  • Patentable technologies for license to other providers
  • Personnel with deep industry knowledge and extensive contacts
  • Current customer inertia from our current network
  • Existing relationships with vendors and providers
  • Deep network of partners and managers

NEXT TIME: MARKETING AND SALES STRATEGY- After you have explained how competitive your products and services are you will need to discuss how you will market and outsell the competition. Since both are so involved, we will separate them into two parts to focus and cover the material the right way.

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