Sales Strategies

In every sales engagement, you can take a variety of different approaches but in general they can be categorized as Direct, Indirect, Divisional, and Containment. Understanding the differences and when to use them will increase your win ratio dramatically.

The most common strategy is the Direct Strategy. It's the easiest because you simply try to overpower your competition by a 3 to 1 ratio, such as, product superiority, reputation, current customer base, etc. The crux with this strategy is that you need to objectively ask yourself, "Is my product clearly superior and if so, can I sustain its superiority?" Often times what you might think as superior is not the case in the eyes of the customer. The key is to understand that the customer's thoughts, ideas, perceptions of your product are what is critical, not yours. Typically, this is a features-based sales opportunity.

An Indirect Strategy is about changing the ground rules of the decision-making process and altering the buying criteria. A great way of using an Indirect Strategy is to get the customer to focus on the long-term not just on the immediate short-term. If you can broaden your customer's perspective on the scope of their needs and engage with the right decision makers, you'll win. An example is to not compare your product and the competition's one to one. If you do this, you are taking a Direct Strategy and unless you have a clear 3 to 1 advantage from your customer's perspective, you'll probably lose on price alone. With an Indirect Strategy you need to change the ground rules by demonstrating the importance of other things like training, technical support, financial stability, anything that gets the customer to think, "Yeah, that is important, I should have thought about that, I think I'm going to add that in." The more creative  differentiation you can create, the better.

The third strategy is the Divisional Strategy. It's the old, "Divide and Conquer," mentality. Just get your foot in the door and build from there. The key with this strategy is to accept that you are not trying to completely displace the competition. You simply want to peacefully co-exists with them by providing the customer with something that the competition cannot. It you deliver on that little something, you'll earn trust and credibility to grow the account. For some companies, this strategy is about becoming a niche player, having a narrow focus and excelling at it. When you think about Root Beer, you probably think about A&W Root Beer. A&W competes in the soda market against Coke and Pepsi, which represent the bulk of the market share. A&W is a small player in the soda market but they are #1 in the root beer niche. They will never come out with a competing cola product because that's a Direct Strategy and they do not have a clear 3:1 advantage. They cannot change the ground rules with an Indirect Strategy since soda is soda. With a Divisional Strategy, A&W captured a toe hold in the soda market and expanded their presence with a Cream Soda and Squirt, two other soda drinks that Coke and Pepsi do not focus on.

The fourth strategy is the Containment Strategy. The objective is to gain a "no decision" from the customer. A no decision is a win because you keep the competition from winning. Again, it's all about postponing a decision, not changing the buying decision as in the Indirect Strategy. Microsoft is one of the best at containment with their products. They will have a huge announcement stating that a newer operating system or a newer product with advanced capabilities will be launched in the future...normally in about 12-18 months. Their goal is to generate buzz, market awareness, and ultimately stale the customer from doing anything until they see the newer version or newer product. Microsoft Vista, Longhorn, even the XBOX 360 sound familiar?

Knowing when and how to maneuver a sales cycle with these four sales strategies is key. Adapting and being able to quickly change from one strategy to another is also important. Throughout the entire sales cycle be cognizant of your current standing, the competitive landscape, and if you are talking to the decision makers.

An excellent read is "The Art of War" by Sun Tzu.

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Thanks,
David Chao
The Web Conferencing Expert

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Comments

[Nick Moreno]

Enjoyed the post and always enjoy looking at things a new way.
Well done!
Nick

[antonio thornton]

That was a really good post. It helped me to make sense of some of the issues with the subject. There is another good blog on the same topic that I was reading a while ago.

[law of attraction]

Thanks for sharing your thoughts in that last post. You have a talent for making a hard subject clear to others. I enjoy reading the posts from a guy who has the same flair for explaining things.

[Serena Donovan]

Thanks for posting this, David. It is very helpful and concise. I hear a lot of people talk about presenting value but the points you have enumerated here really dig into different types of value. You are truly a sales maestro. Keep up the good work!