6 Levers of a Sales Strategy

What comes to mind when you think of the term “sales strategy”?

For many, the term conjures up images of boardroom discussions and long PowerPoint presentations. In truth, a progressive bulletproof sales strategy is far more practical than that. There are a variety of critical components to be considered when crafting a sales strategy. Think of these various components as levers.

Each of these levers represents a choice. A company may choose to pull one, a few, or all of the levers in order to get the desired results it is seeking. The sum of these choices represents the company’s sales strategy.

Pulling a lever requires time, money, and energy. Most companies cannot pull each lever in equal measure. That is, even if a company chooses to focus on several levers, it can rarely devote equal resources to each. A company succeeds when it pulls the right levers to the right degree at the right time.

However, there is no universally “right” set of levers. What works for one company doesn’t work for another. Getting it right means making decisions that align with the company’s corporate strategy and long-term organizational plan. These decisions are not to be made in a vacuum by sales leadership. The C-suite must align behind and support decisions to pull these levers, as each lever has an impact that will be felt by all. Particular attention must be paid to alignment across sales, marketing, and product leadership to ensure that these functions are in lockstep as they address the market.

Here, we demystify the mechanics of a sales strategy. We provide an overview of these six levers in no particular order. We look at how they work and what they mean. By understanding each, a company can develop its sales strategy with an informed approach.

Lever 1: Organizational Structure

The organizational structure must align with the profile of the company’s products or services. For example, large, complex solutions likely necessitate an outside sales team and perhaps even opportunity pursuit teams. In contrast, an inside sales team is likely best suited to position simple, lower-price-point products or services.

Additionally, if a company is segmenting its target customers by size, spend, industry, or geography, a company may choose to develop enterprise teams, mid-market teams, or vertical teams. In some cases, an indirect route to market through channel partners or brokers makes sense.

Regardless of the organizational structure selected, it is imperative that there is a clear connection to corporate strategy. Goals and roles must be clearly defined, and the skills and competencies required to be successful in these roles must be identified and enhanced.

Lever 2: Compensation Plan Design

Think of your compensation plan as a behavior plan. What are the activities, behaviors, and outcomes required for your organization to achieve its corporate goals?

These plans vary by role within the sales organization. Your compensation plan can favor the growth of existing relationships over new logos, new products over legacy products, or new regions or segments over existing segments and regions. You can see how this lever creates a ripple effect across the organization.

Leaders can expect new customer growth to slow if the compensation prioritizes existing accounts. Similarly, they can expect new products to flounder if the payout is equal between a legacy product and a new product.

The question is not which balance is correct. Instead, the question must ask if the compensation plan is congruent with the corporate strategy.

There is also balance required between the number of compensation plans designed, compensation plan complexity, and the ability to administer the plans effectively.

Sales professionals will adjust their behaviors to maximize their compensation. Therefore, the compensation design is the clearest statement of leaders’ intentions.

Lever 3: Territory Design

Territory design means getting specific about your audience. Leaders must clearly segment the market when determining the total addressable market.

Segmentation can be done in a variety of ways, but the most common are revenue, category spend, geography, industry, client vs. prospective customer, and number of employees.

Territory design is an example of how pulling one lever can impact another. For example, territory design will have implications to organizational structure (inside reps, outside reps, geo reps, vertical reps). This is a critical area of focus. Research from ZS Associates shows that an optimal territory design can increase sales by two to seven percent.

Lever 4: Productivity

Productivity is viewed as a perennial driver of improvement, as sales efficiency has come into clear view for CEOs, CFOs, and investors alike.

A common top-level metric here is revenue or profit per sales professional, but there are several more granular ways to measure productivity. Productivity is about improving sales execution and sales processes, which can result in higher win rates, shorter sales cycles, a higher average deal size, and an increased margin contribution.

Productive sales organizations devote more time to customer-facing selling activities rather than administrative activities. This enhanced efficiency in the sales organization also drives profitability. By doing more with the same overall investment, we can increase our margin contribution.

Leaders can pursue productivity independent of the other levers listed here. Technology investments also play an important role in supporting a productivity improvement plan. CRM systems, data providers, artificial intelligence tools, and even back-office systems come into play.

Productivity also has onboarding implications. If we can effectively onboard and ramp our reps to full productivity faster, we are capturing a higher return on investment and beating revenue targets that may have made longer ramp expectations.

Lever 5: Talent Management

Leaders must be able to identify and attract the best talent to their organizations. Talent management begins before the sales professional is recruited or hired.

This starts with having an ideal candidate profile developed for each role in the sales organization. More than a job description, this candidate profile must include clear definitions around experience level, skills, competencies, and knowledge of the market, industry, and audience being addressed.

While hiring for “day one” readiness, leaders must also create a learning ecosystem that includes onboarding, assessments, and ongoing training and management coaching for their team member to help them flourish.

Given the increasing complexity of business issues, products, and solutions, ramping new reps to full productivity can take 12 months or longer. These issues are well recognized and are the driving factors behind the rapid growth of the sales enablement function, which acts as a bridge between sales leadership, sales operations, and human resources.

Lever 6: Sales Execution

Sales execution has everything to do with your sales process. Meeting preparation, meeting execution, nurturing strategies, demo execution, proposal development, contracting, and more fall under sales execution. These elements form the day-to-day of selling.

A focus on sales execution can dramatically improve your revenue. It represents your sales methodology and creates a predictable and repeatable process that can then be measured and improved over time.

Pulling this lever has implications for all areas of the business. Examples include sales assets that marketing must create, CRM system enhancements, metrics, and sales tools and technology.

Sales execution sits at the intersection of operations and enablement. While not always the most glamorous part of the sales strategy, sales execution is table stakes in some industries and the crux of the win in others. If you are not focused on the details and the process, your results will be highly variable, and it will be difficult to pinpoint what is working well and where the areas of improvement lie.

As Peter Drucker famously said, “Management is doing things right; leadership is doing the right things.” A world-class sales strategy is based on these two principals. First, executive leadership must develop a crisp, clearly defined strategy and corporate objectives, which will help identify the right things to do. Then, sales leaders can work collaboratively to determine which levers to pull and with what amount of force in order to do things right to meet those corporate objectives.