Every successful Sales Leader knows what “Sales Strategy” means. But this term is sometimes over-used or thrown around in ways that don’t really refer to the correct definition of Sales Strategy. So what is the correct definition of Sales Strategy?
To state simply, it’s an operating plan for the sales department of your company designed to state how the sales force intends to sell its products or services to increase top-line revenue while doing it in a way that is consistent with the bottom-line profitability requirements of the business.
It is a strategically planned and written document that states what your sales department/function will accomplish. It also shows how the sales force will do that – a strategy is a “game plan” so this is how your sales team will work to achieve its annual sales quota target. Your sales strategy also shows how you will plan your Sales Effectiveness & Growth Drivers and allocate all your resources efficiently to grow your sales revenue in a cost-effective way (more on that below).
Naturally, a Sales Strategy is designed to be in alignment with the company’s overall Corporate Strategy (which includes Marketing, Customer Success, Product, etc.). It’s what SBI (Sales Benchmark Index) calls an “interlocked” strategy – all the executives (sales, marketing, product, etc.) work to align and interlock their strategies (and especially Sales & Marketing alignment/interlock). This ensures that the final strategy is cohesive and in full alignment. This means that you need to take inputs from Marketing and Product and others to ensure that my Sales Strategy puts the sales force into a position to succeed and achieve or over-achieve our revenue targets.
Importantly, the Sales Strategy shows how the sales force will produce the intended ROI (Return on Investment) in a cost-effective manner. Note the “cost-effective” part – it is always stated in the context of the unit economics necessary for our company to succeed and the head of Sales will typically collaborate closely with the CEO and the CFO to ensure that your are all in alignment.
Note that a Sales Strategy is not a simple document and is developed with a lot of thought and analysis invested into the process. It is a culmination of many insights gathered from the business externally and internally. Just like any strategy – it is based on tradeoffs (see Michael Porter’s discussion on how tradeoffs are a necessary foundation of a Strategy) – the Sales Strategy implicitly is a function of choices on what decisions, programs and investments you will make and which ones you will not make.
Finally, every sales executive must carefully craft and customize the Sales Strategy for the context of your business. And you should begin the planning process in advance of the oncoming new year (i.e. it’s wise to start your general planning and outlining the key areas starting in August which is way in advance of an upcoming year).
What else? What are some other thoughts on developing a Sales Strategy?