Precision Pricing for Profit in the New World Order - Essay Example

In the business world a company ability to sell its product or services determines its ultimate success. Having a good product that does not reach the marketplace is an unfortunate event that many start up companies face due it inability to formulate the right selling strategy. Companies of all sizes need to develop sales strategies that optimize their use of resources in order to achieve the greatest results. Two factors that companies have traditionally focus on out of their sales team efforts are effectiveness and the overall volume. These two things are important, but the new realities of the 21st century have realigned priorities due to the high levels of competition and the need for a cash flow base to operate a business. The newest trends are all pointing towards speed as being the most important factor in the sales process. This report discusses the concept of sprint selling by illustrating its basic elements and ways companies can implement this innovative sales approach. Sprint selling is a business technique that focuses on speeding up the time to close in order to increase efficiency and achieve better results for a company. To understand speed selling one must comprehend the consequences of going the opposite direction. All companies depend on having a cash flow in order to keep a business going. If it takes a company more than a year to close out its sales leads the firm is operating in a risky environment because overhead and operating expenses may eat up a company budget prior to achieving the sale. In the process of going for a home run customer that can bring high amounts of the revenue the company basic necessities must be met, thus this is where sprint selling comes in to the rescue. Sprint selling is a process that increases the chances of longevity because it ensures a quick sales turnover where a company obtains many closed sales in short periods of time. Spring selling works best a part of integrated plan in which sprint selling is utilized as a combined strategy that involves the creation of a diversified customer portfolio. The responsibility of obtaining sales for a company is shared by the marketing and sales team. The marketing team concentrates of attracting new customers and sales leads, while the sales team has to follow up on those sales leads and are the ones that must close the sale. This means that the salespeople are the ones that have greater influence on the total elapsed time of a sale cycle. The sales team has to incorporate a selection strategy of customer prospects that reduces risks associated with both extremes. Sprint selling works best for smaller accounts that require less hassle implying that a company can not solely survive with these accounts in the long term. Bigger accounts require more time and a sprint selling approach realizes the need of having a balance between smaller and larger customer. The approach does encourage to find ways to shorten the overall closing time for big accounts as part of the company overall strategy. A company’s product offering should stay away from certain product characteristics such as having high switching cost in order to achieve better customer reception. Switching costs are costs incurred when a company changes from one supplier to another (Kotler). Companies may be weary of starting a relationship with such a player because they know than once the relationship starts it limits the companies vender alternatives afterwards. On the other hand for a company with well established reputation and strong branding value switching cost can be utilized to their advantage. Under such a scenario the company high switching enables the firm to retain the customer for longer periods of time as long as they keep a good level of customer satisfaction. Another thing a seller should keep away from no matter what their status or size is offering products are services that required a total integrated system for the buyer. The buyer does not like such an alternative because it creates too big a dependence into one sole supplier. The optimum buyer portfolio mix involves the following priority sequence: fast to close, rapid growth, most influential, and largest players (Sprint Sale to Close Sales Quickly). Rapid growth sales present a unique opportunity that can provide tremendous upside for a company. A rapid growth customer is client whose business is in the growth stage of its product life cycle. These clients are valuable because as their business growth the size of the account will grow as well. When choosing a rapid growth client one must consider the current size of the customer to identify a true opportunity. If a client is only moving a few thousands a months in revenues, then even if the company is growing the ultimate return are not too attractive. The influential clients also play an important role within a sprint sales technique. These clients can be used as important reference samples to land other big deals. The sprint sale technique also works as a catapult to achieve other sales by utilizing the small clients landed as examples in the negotiating process with new prospects. A concept that must be always considered within a sprint selling strategy is value proposition. Value proposition involves selecting client that brings upside to the table. For example innovative companies are the types of client that may not offer as much upside because they are risky business that have a high chance of failure. It is important to select client that can provide a long term income stream for a company. Another scenario of value proposition is small client that has a lot of influence over an industry. The seller can invest more time to land this client because the account has great public relation and marketing value for the company. Good customers to target that provide great value are medium size companies and divisions of larger companies. In the case of divisions they have great purchasing power, while at the same time offer faster closing opportunities because the decisional power is at the unit level. Sprint selling is a new approach that can pay off great dividends for a company. It allows small firms to build up a portfolio of clients in a shorter amount of time as well as helping enterprises achieve a positive cash flow balance. The implementation of this sales approach reduces risk while at the same time eliminating sales team inertia and lack of productivity. This business philosophy can be effective for companies of all sizes and represent a great strategic approach to achieve long term growth. References Kotler, P. (2002). Marketing Management (11th). New Jersey: Prentice Hall. Sprint Sales to Close Sales Quickly. 24 October 2001. Harvard Business School. Read More