A small business represents a financial investment and to make money lots of things need to go right. Market analysis is the fundamental starting point as without understanding the competitive environment and customers there is no potential profit. Good market analysis will lead to a clear understanding of the customer and their buying patterns. Consequently, this will help to develop clear strategies, including sales strategies to improve your product or service to customers and to increase sales growth and make money.
Comprehensive market analysis will help to determine the opportunity to increase sales growth and what barriers there may especially in the form of other competitors. Market analysis must perform two core goals:
- Define market opportunity in terms of size and customer segment
- Define competitive landscape
Tools such as SWOT analysis and Porter Five Forces model will be useful in this context.
General Sales Strategies
Sales strategies will usually focus on one of three core approaches:
- New – introduction of a completely new product or product design or the latest and greatest version for example cars, electronics, mobile phones, etc.
- Differentiation – establishing a brand that will typically command a higher price for example designer clothes and accessories, premium brand cars, etc.
- Price – low cost or commodity pricing to reach a mass market for example budget airlines, etc.
Business Sales Strategy
To exploit the market opportunity the business needs to select the right sales strategy and try to build on business strengths – things that the business is very good at. For example, a small business may decide that their focus to increase sales should be on building a local brand based on excellent customer service, especially the after sales service. If existing staff are not good at providing this service then they need training to make this strategy work. This service approach would be very different to a stack-them-high-and-sell-them-cheap strategy. A business sales strategy must combine:
- Market opportunity that can be exploited by the business in the face of existing competition
- Business strengths that will reinforce the sales approach
Increase in Sales
The selected sales strategy needs to be targeted at the customer segment and exploit their buying patterns to increase sales growth and make money for example:
- Unique selling point such as a new product with a stylish design, build quality or more exclusive
- Seasonal influences such as greeting card based on time of year or specific anniversaries
- Preferred channels such as retail outlet or internet
- Sales incentives such as promotions, money back guarantees, after sales service
Ideally, feedback from customers will inform the sales strategy to allow the business to increase sales by giving the customer more of what they want.