Strategic Planning

Sales Planning Strategies and Resource

Management
Prepared by Larry Podgorny

Why Plan?
Alice: Which way should I go?
Cheshire Cat: That depends on where you are going.
Alice: I dont know where I am going.
Cheshire Cat: Then it doesnt matter which way you go!!

Lewis Carroll
1872
Through the LookingGlass

The Plan

In the beginning was the plan.

And then came the assumptions.
And the assumptions were with out form.
And the plan was completely without substance.
And darkness was upon the face of the workers.

Definition of Strategy/Strategic
A careful plan or method
The art of devising or employing plans or stratagems
toward a goal
Of great importance within an integrated whole or to
a planned effect
Necessary to or important in the initiation, conduct, or
completion of a strategic plan

What Strategic Planning is Not

Strategic planning is not forecasting
Strategic planning is not the simple application of
quantitative techniques to business planning.
Strategic planning is concerned with making
decisions today that will affect the organization
(product line) and its future.
Strategic planning does not eliminate risk, it helps
managers access the risks they must take by gaining
a better understanding of the parameters involved in
their decisions.

Simplified Process of Strategic

Planning
The process of strategic planning is a step-by-step
approach three key questions that lie at the heart of
any business strategy:
What are you going to sell?
Who are your target customers?
How can you beat or avoid your competition?
If you can answer these three questions well, you have
a strategy.

Simplified Process of Strategic

Planning (Cont.)
Theres no denying that a simplified process involves
complex issues.
The process involves digesting a lot of information
and requires some fairly difficult analysis.
Good strategic planning should be simplified not
simplistic.
Good intentions alone does not get the job done.

Simplified Process of Strategic

Planning (Cont.)
You need to see it big at first. Start at a high level.
Sift through all of the noise to get to the important
details
The next step is do the things that matter very well.
Occasionally, go back up to the high level to make
sure everything is still on course.

Simplified Process Of Strategic

Planning- Start By Studying The
Way It Is Now
You need to gather basic information and facts
without making any judgments.
Based on this information you build some
assumptions, again without making judgments.
This process is the central part of the planning
process and needs to be reviewed in detail because
this information is the foundation for all further
strategy discussions and decisions.

1.
2.
3.

Data
External Situation
Internal Situation
Capabilities and
competencies

1.

Analysis
1.

Strategic assessment
Strategic Issues

6.

1.

1.
2.
3.

Direction
Strategies

Commitment
Mission Statement
Goals
Objectives

Implementation
Action Plans
Budgets
Schedules

Ideas
Assumptions

Simplified Process of Strategic

Planning- How it Works
Planning
Gather Information
Assess Capabilities
Make Assumptions
Make Strategic Assessments
Formulate Strategy
Establish Goals and Objectives
Formulate Tentative Action Plans
Finalize Action Plans

Monitor Developments
and
Progress

Execution

Total Organizational Planning

Strategic Planning

Marketing Information

Long Term Business Plan

Market Plan
Shorter Term Business Plan
Sales Plan

Key
Account Strategy

Target
Account Strategy

Maintenance
Account Strategy

Why Bother
Account Strategy
Strategic

Territory Plans

Key and Target Account Plans

Action Plans

Control & Evaluation

Tactical

Start by Studying the Way It Is

Now
The course to your vision, like all navigation, starts with
a known position.
What markets should you pursue
Who are your competitors
Where is your competitive advantage
What are your strengths
What are your weaknesses
Figuring out point A is the first essential step to charting
a course to get to point B. So get your bearings!
Where are you today?

P
O
S
I
T
I
O
N
I
N
G

Which segments /
customers will we
concentrate on ?

CUSTOMER
TARGETS

Whom will we
challenge for these
customers?

COMPETITOR
TARGETS

What incentives will we

provide to get them to
buy from us rather
than from competitors?

CORE
STRATEGY

DEFINING AND SELECTING KEY/TARGET

ACCOUNTS
Weak

Strong
High

ACCOUNT
ATTRACTIVENESS

Size
Growth
Profitability
Location
Purchasing criteria
and processes
Current suppliers
Status of customer
(prestige)

Low

Invest / Grow

Selectively
Invest

Maintain

Manage for
Cash /
Withdraw

BUSINESS STRENGTHS

Product range
Product efficacy (the power to produce an
effect )
Service quality (inc. distribution)
Price
Associated services (e.g. Tech advice)
Reputation/image
Past experience
Quality of sales staff

ACCOUNT PORTFOLIO ANALYSIS

High

Account
Opportunity

Low

Weak

Strength of Position

Strong
KEY

TARGET

Attractiveness:
Accounts are very attractive since they
offer high opportunity and sales
organization has strong position.

Attractiveness:
Accounts are potentially attractive
since they offer high opportunity, but
sales organization currently has weak
position with accounts.

Sales call strategy:

Accounts should receive a high level of
sales calls since they are the sales
organizations most attractive
accounts.

Sales call strategy:

Selected accounts should receive a
high level of sales calls to strengthen
the sales organizations position.

MAINTENANCE

WHY BOTHER

Attractiveness:
Accounts are somewhat attractive since
sales organization has strong position,
but future opportunity is limited.

Attractiveness:
Accounts are very unattractive since
they offer low opportunity and sales
organization has weak position.

Sales call strategy:

Accounts should receive a moderate
level of sales calls to maintain the
current strength of the sales
organizations position. And, efforts
should be made to replace field sales
calls with telephone sales.

Sales call strategy:

Accounts should receive no field sales
calls and a minimum of inside sales
resources.

ACCOUNT SEGMENTATION AND PRIORITIZATION

High

KEY ACCOUNTS

TARGET ACCOUNTS

ACCOUNT ATTRACTIVENESS

(Your competitions Key Accounts)

10-20% of your account base

Gets very little attention

80% of your GP$

Receives less than 50% of
your resources

MAINTENANCE ACCOUNTS

WHY BOTHER? ACCOUNTS

40-45% of your account base

30-40% of your account base

10-15% of your GP$

Receives 30-40% of your
resources

Low
Strong

Less than 5% of your GP$

Receives 20-30% of your
resources
Creates 90% of your
headaches

YOUR STRENGTH OF POSITION

Weak

Strong

Sales Team and Selling Effort

Sales Channel:
Major Account
PROGRAMS

KEY

Sales Channel:
Selling Effort:

Field Selling and

Inside Sales

Sales Channel: Direct Marketing,

Teleselling, and Field
Selling
Selling Effort:

Heavy

MAINTENANCE

Heavy (best prospects)

Low (other prospects)

WHY BOTHER

Sales Channel:

Inside Sales
Field Selling and
Teleselling

Sales Channel: Teleselling,

Direct Marketing,
and Some Inside

Selling Effort:

Moderate

Selling Effort:

Low

Weak

ACCOUNT
OPPORTUNITY

Selling Effort:
Heavy by Specialist

TARGET

Strong

COMPETITIVE POSITION

Weak

Changing Business
Environment

The
Selling
Ballgame

Leads to
Changing Selling
Environment

Resulting in
Harder to Get and
Hold Customers and
It Costs More!

Implications

Better Understanding of
Customers Needs

Better Selectivity

Better Selling Strategies

Better Time & Territory

Management

PRIORITIES
Time Management

Your Scarcest Resource

TOTAL BUSINESS DAYS 2002
252
Less:
Vacation
10
Holidays
10
Personal absences 5
WORKING DAYS AVAILABLE IN YEAR
Less:
Meetings, Trade Shows, etc.
Training
Customer unavailability
Miscellaneous
TOTAL

25
227

Acct.
Service/
Coordinatio
Administratio
n
n
13%

16%

Travel
17%

2001

Face-to-Face
Selling
29%

Phone
Selling
25%

HOW
SALESPEOPLE
SPEND THEIR
TIME
Acct. Service/
Coordination
11%
Administratio

n
16%

Travel
18%

2000

Face-to-Face
Selling
30%

Phone
Selling
25%

The Contemporary Marketing

Concept

Customer Orientation

The purpose of a business is to satisfy the needs of customers.

Products and services are important only to the extent that they satisfy
these needsthey are means rather than ends. Therefore, marketing
starts with the determination of customer needs and ends with the
repeated satisfaction of those needs.

Profit Orientation
A business must satisfy the needs of its customers at an acceptable
level of profitability. Therefore, the purpose of marketing is not simply
to generate sales or achieve a certain market share, but rather to
produce profitable sales and a profitable market share.

Integrated Effort
All activities or a business should be integrated and coordinated so as
to satisfy customer needs at a satisfactory rate of profitability.
Marketing must be coordinated with finance, production, personnel
administration, engineering, and research and development. Moreover,
all marketing activities must be effectively integrated and coordinated
in order to achieve market impact.

I. Customer Change Drivers

Raw material shortages

Regulatory agencies

Environmental

Global competition

Trade agreements (NAFTA, GATT)

Mergers/acquisitions

Automation/technology

Reduction in cycle time

Price

Quality

Down sizing

Customer Change Drivers (contd.)

Reengineering

Out-sourcing

Systems versus products

Out-sourcing of engineering and R&D to vendors

Long term contracts (5 years)

Sharing of warranty costs by suppliers

EDI

Vendor reduction

II. Purchasing Behavior/Buying

Relationships

Manage supply channel

strategic alliances
partnering
customer linked strategies
integrated supply

National account programs

Single source
product breadth
product depth

EDI

Removal / reduction in any redundancy

Vendor reduction

seamless order and delivery

automation
paperless

Purchasing Behavior/Buying Relationships

(contd.)

Broader offering of true value added services

Proof of performancevendor score cards

provided by vendors

Vendor as a business consultant to account

Problem solving vendors will be chosen

Reduction of in-house expertise by customers

Require modular / systems, global vendors with

total quality

Purchase packages of integrated components

(systems) versus single components

Better P.O.P. merchandising

III. Role of the Sales Team

Increased speed of response

Technical value-added sales calls
Greater knowledge of customer, competition and sellers
company
Ability to make decisions (empowerment)
Relationship selling at higher levelsell the whole
customer
Empathy for the customer
Functional sellers
sales teams/sellers focused on opening accounts
through selling creative solutions to problems
account managers on accounts to service

IV.

Sales Force Issues / Problems

Willingness to change
Different organizational structure, e.g., Hunters and
Farmers
New skills
Sales force automation
Accountability / evaluation / compensation
More specialized sellers requiredcurrently generalists
Total company will become a selling teamcultural
change
Shift paradigm from products to integrated solution
systems
More research at the account level
Sharing of customer information

V.

Change Areas

International, national account perspectives

Better technical skills

Better research skills

Understanding

Customer specialized sales forces

Why Do Sales Organizations Become Obsolete?

Growth Evolution

II

III

IV

Any business is
good!

All Business
is good!

What business
is good?

Certain business
is good!

One product
One market

One product
One big market

Old/new
products many
markets

Redefine
customer
segment selling

Sell to
survive

Sell volume to
lower costs

Sell volume to
hold share

Optimize to get
best returns

Start-up

Volume
growth

Market share

Optimization

THE
PURPOSE
SALES FORCE TIME & EFFORT
Customer Resource Allocation
Decisions

Product Resource Allocation

Decisions

Activity Resource
Allocation Decisions

What segment(s) to call on

New vs. existing products

Hunting vs. farming

What volume segments to call

on:

High volume vs. low volume products

Selling vs. servicing

Easy to sell vs. hard to sell products

High volume vs. low

Familiar vs. unfamiliar products

Relationship expert
vs. product expert vs.
industry expert vs.
customer expert

volume

National accounts vs. smaller

accounts
What profitability segments to
call on: highly profitable vs. less
profitable
New vs. existing accounts
High penetration vs. low
penetration accounts

Products with high short-term

impact and low carryovers vs.
products with low short-term
impact and high
carryover
High-tech products vs. low -tech
products

What geography to focus on

Long selling cycle vs. short

selling cycle

Headquarters vs. field calls

Differentiated vs.
nondifferentiated
Highly competitive vs.
noncompetitive

SELLING PROCESSES

EVOLUTION OF
BUYING PROCESS

Where buyers experience

the greatest challenges

Selling organizations get involved at

different stages in the customers
buying process

Planning
1

Recognizing Searching
2
3

Evaluating
4

Selecting
5

Committing Implementing Tracking

6
7
8

VENDOR
Present-Handle Objections-Close

SUPPLIER
Searching through implementing

ADDED VALUE PARTNER

Entire process: Planning through tracking results

Where
Sellers
Focus
Efforts

Sellers Boundary Role

Communication

Selling
Organization

Communication

REP

Buying
Organization

Marketing Strategy

Procurement Strategy

policies
procedures
programs

policies
procedures
programs

Transactions and Relationships

Transaction Selling

Relationship Creation

1. Selling dominates learning

1. Learning about the customer

is intense and dominates
selling

2. Talking dominates listening

2. Listening dominates talking

3. Persuading the customer is

product driven and benefits
focused

3. Teaching the customer is

need driven and problem
focused

4. The goal is to build buyers

and sales through
persuasion, price, presence
and terms

4. The goal is to build

relationships through
credibility, responsiveness,
and trust

TYPICAL
PROCESS
Recognition
of Needs

Help
customers
recognize
and define
problems
and needs
in a new or
different
way.

Evaluation
of Options

Show
superior
solutions,
options, and
approaches
that
customers
may not have
understood
or
considered.

Resolution
of Concerns

Purchase

Help
customers
overcome
and remove
obstacles to
acquisition.

Make
purchase
painless,
convenient,
and hasslefree.

Implementstation

Show
customers
how to install
and use
product.

ADDING VALUE TO A TRANSACTIONAL

SALE
Recognition
of Needs

Evaluation
of Options

Resolution
of Concerns

Customer
has already
defined
needs and
problems
completely.

Customer
already
understands
alternative
solutions.

Customer
has few
issues or
concerns.

Little or no
opportunity
to create
sales value.

Little or no
opportunity
to create
sales value.

Little or no
opportunity
to create
sales value.

Purchase

Seller can
help make
purchase
painless,
convenient,
and hasslefree.
Little or no
opportunity
to create
sales value.

Implementstation

Customer
generally
knows
how to use
product.

ADDING VALUE TO A CONSULTATIVE

SALE
Recognition
of Needs

Seller can
create most
value early
in the
process by
helping
customers
define
needs and
solutions.

Evaluation
of Options

Resolution
of Concerns

Consultative
seller can
design
customized
solutions
and help
customers
make
informed
choices.

Consultative
seller can
counsel
customers
and help
resolve
concerns.

Purchase

Implement
-tation

Consultative
seller can
advise and
problem
solve
implementati
on issues.

Sales Call Time

TYPICAL
SALESPEOPLE

KEY ACCOUNT
SALESPEOPLE

5%

Needs Analysis

50%

10%

Problem Solving

30%

35%

F/B. Presentation

15%

50%

Trying to Close

5%

Buying Discipline in Transition

Tactical Purchasing

Strategic Sourcing

Regional Focus

Global Focus

Large Supplier Base

Strategic Partners

Commodity Purchases

Technology Investments

Product Focus

Solution Focus

Buying Parts

Managing Processes

Price Focus

Total Cost / Value

Research Findings

The world of selling is dynamic by customers

changing needs and values.

Customers are more reliant upon sellers for:

information
advice
problem solving

Information technology is having a major

impact on customer / seller relationships.

Total organization win, sustain, and grow

customer relationships.

Implications for Salespeople

Salespeople need to understand how to:

Respond to the needs customers have for

information, advice and problem solving.

Create value beyond their products and

services in a way that differentiates the
selling organization from its competition.

Create and manage the organization-toorganization relationship.

Sales Discipline for the 90s

How you can
Thinking Strategically

Anticipate ways to create

value for customers

Managing Information

Deliver focused, usable

information to customers and
associates

Advancing the Relationship

Increase customers trust in

and commitment to you and
your company

Orchestrating Resources

Form an efficient sales team

and manage it costeffectively

Key ShiftSelling Competencies

NOW
Strategic
Selling

FUTURE

Strategic
Selling

World Class
Work Processes
Systems

Transactional
Selling

Information Flow
Transactional
Selling

Bottom Line
A business can no longer rely
on the uniqueness of their
products to retain customers
or grow new sales revenue.

Customers will align their business with strategic

suppliers who understand their business and
bring a unique offering which adds value
impacts their bottom line through increased
sales revenue or reduced costs

Natural Sales Skills

5%
35%

60%

5% Process the requisite selling skills that

make them stand out
35% Just manage to pay their way
60% Just there for the beer

 Super Salespersons Characteristics

Charisma in sales situation

Sense of humor
Good planning and preparation skills
Physical energy
Tenacity and resilience at rejection

Peak Sales Performers

Study of 1,500 Achievers Over 20 years
Take risks and innovate
Powerful sense of mission
More interested in problem solving
See customers as partners
Rejection is information
Use mental rehearsal

THE SALESPERSON OF TODAY IS

EXPECTED TO:

Do more forecasting of future customer requirements

Spend more time planning calls

Spend more time in group, system, and strategic selling

Improve territory management

Do less driving in the territory

Spend more time in telephone selling
Do more active selling

Prepare more detailed market reports

PROFITS

The Key Challenge

Sales Productivity
Where:

G.M. =
C.O.S. =

G.M.
C.O.S.
Gross Margin Dollars
Cost of Sale in Dollars

Implications
1.

Less discounting.

2.

Selling higher margin products.

3.
Selling more product lines to each customer
(cross-setting).
4.
Being more selective and discriminating in
qualifying potential buyers.
5.

Better use of selling time (deployment).

SALES FORCE PRODUCTIVITY

1st
Effectiveness

Clear priorities in
terms of:

Markets

Customers

Products

Activities
And clear
strategy
To drive the
allocation of

2nd
Efficiency

Managing the
allocation of sales
resources to:

Markets

Customers

Products

Activities
Measure the
"return on
investment"

Productivity

Components of Sales Productivity

PRODUCTIVITY

EFFICIENCY

EFFECTIVENESS

Number of doors
opened

What is done
once in door

SUMMARY
Sales Efficiency

Sales Effectiveness

Defined

Getting in front of
customer at minimum
cost

Using skills and abilities

to maximize sales
potential

Mechanisms
for improving

Working harder:
time management
incentives
call reports
territory design

Working smarter:
coaching
skills training
account strategies

Measures

penetration
call rates
cost / call

success rates
repeat business
sustainable margins