A sales strategy focused on new customers requires freeing up salespeople’s time to find them and recalculating the sales plan for the period before payments come in from the first deals. If the previous monthly sales plan stays in place and bonuses are based only on payments that come in quickly, the team will return to existing buyers: working with future customers will mean losing bonus pay this very month.

The owner sees this return and decides that the team has not accepted their idea. But what interests me here is something else: who exactly is sending salespeople back to their previous work? If the head of sales requires salespeople to secure repeat orders urgently, they are following their leader’s instructions. The head of sales has to answer for missing the old sales plan now. For the lack of future customers, later.

This creates an unpleasant situation. At a team meeting, the owner chooses where the company will go. Between meetings, the head of sales chooses what will get the team through this month. Both decisions make sense on their own, but the same hours of salespeople’s time are spent twice.

Explaining the prospects of the new market to employees again is pointless here. First, the company will have to decide which current earnings it is willing to postpone for the sake of future ones, who will continue serving existing buyers and how the transition will be paid for. Otherwise, an entirely ordinary request to deal with an urgent order cancels the new strategy every day.

What types of sales strategy are there?

Sales strategies can be divided into four types by source of growth: attracting new customers, repeat sales, increasing purchases by existing customers and entering a new segment or region. The choice should depend on what work the team can repeat and what additional work the company is willing to pay for.

Attract new customers of a familiar type. The company already sells to a certain type of buyer and wants to find more like them. There is an important distinction here: did the team bring in the existing customers, or did the owner do it personally? If all the initial agreements depended on the owner’s personal contacts, the salesperson was given an established customer base to look after. Asking them to find more buyers like these adds work they have not done before. First, they need a repeatable way of making contact with a buyer, then a sales plan for repeating it.

Secure repeat orders. The basis is a need that comes round again: stock runs out, servicing is due, the next project starts. But having an existing customer base does not solve anything by itself. If the salesperson waits for an incoming enquiry, the company makes its money from customers who remember it themselves. The work changes when the salesperson knows when the buyer will next need something and contacts them before they place an order with another supplier. This strategy does not suit a product bought only once, with no further need.

Sell more to an existing customer. This means an additional product, a service or a more complete package to meet their needs. It seems like the shortest route: the buyer knows us. However, the employee you know at the customer’s company does not necessarily control the budget for the new purchase. If they simply pass the catalogue to another department, the salesperson still has to find someone else involved in the decision. Increasing the number of proposals sent is easy. Reaching the person who needs them is a separate job.

Enter a new segment or region. More than the contact list changes here. Different buyers have their own requirements for the product, timescales, documents and purchasing method. Before starting, it is important to separate what the company already knows how to do from what it still needs to find out. Expanding the team before you know how these sales will work means paying both to find the answer and to employ the people who need that answer to do their jobs.

Active selling, incoming enquiries, dealers and partners are ways of reaching the chosen buyer. They can be combined with different strategies. A repeat order, for example, can come directly or through a dealer; this does not change the task of keeping the customer, but it changes who stays in touch with them.

Price, how quickly you fulfil orders and specialisation explain why a buyer will choose you. A specific decision is needed here too. If the team sells on the strength of completing orders quickly, it has confirmed timescales and available capacity. If it sells on low prices, its costs allow the order to make money. A sales script cannot replace either of these conditions.

Business sales strategy: how much money is left after a change of direction

A business sales strategy is chosen based on the extra money left after the costs of the new area and the losses from doing less of the previous work. You cannot count all the expected revenue from the new area as company growth if the same salespeople will stop looking after some existing customers to bring it in.

Counting only the cost of attracting new buyers is convenient: there is an advertising bill and the salesperson’s commission is known. But the work that had to be put off does not send a separate bill. Its cost will show up later — in a missed repeat purchase or a buyer whose proposal was not prepared in time. On paper, the new area has already paid for itself, while the company as a whole has earned less than expected.

To compare two options, you need the same period. From each option’s revenue, subtract the costs of fulfilling orders, commissions paid to salespeople and new launch costs. Then subtract the earnings from existing sales that will no longer be supported. Costs that are the same in both options do not need to be subtracted again: they have not changed because of the decision.

Suppose that, over a quarter, new orders will bring in 600 thousand roubles after paying for fulfilment and salespeople’s commissions. Attracting buyers will cost another 150 thousand. Moving a salesperson to this area will reduce earnings from current sales by 200 thousand. The result is:

  • 600 thousand roubles — earnings from new orders before the costs of attracting customers;
  • 150 thousand roubles — costs of attracting customers;
  • 200 thousand roubles — earnings from the previous area that the company will lose;
  • 600 − 150 − 200 = 250 thousand roubles — the extra money for the company over the quarter.

If you leave out the third line, the result is 450 thousand. With a goal of earning an extra 300 thousand, one calculation supports starting, while the other shows a shortfall of 50 thousand. This is now the owner’s decision about the cost of the transition. Increasing the salesperson’s sales plan to make the figures add up is pointless: the work that brought in money has already been taken out of their day.

The most debatable figure here is 200 thousand. You cannot set it as a percentage of the customer base just to be on the safe side. The head of sales shows exactly which sales require the involvement of the employee being moved and who will take them over. If a buyer places orders without assistance, their entire purchase does not become a loss because their salesperson changes. If another employee takes over the work, the calculation will include the additional costs and whatever that employee will now give up.

This creates a choice: give the existing customer base to someone else, simplify the handling of repeat orders or accept a temporary reduction in their volume. Each decision has its own cost. The comparison is only complete once you have identified the work that will actually stop, or paid for it to continue.

There is also the timing of payments. An area with a good quarterly result can leave the company without funds for current payments if buyers pay later than orders have to be fulfilled. Before starting, the owner sees a separate figure for the costs before the first payment, and where that money will come from. Growth in orders will also require confirmation from those who fulfil them — this gap is examined in the article about sales that outpace the business’s capacity.

A strong head of sales does not remove this choice. They can organise sales and show the consequences of different options. Authorising the company to spend money on the transition, change the terms on which a product is offered or give up some of today’s earnings is the owner’s decision.

Company sales strategy: what changes in the sales team’s work

A company’s sales strategy starts to be put into practice when salespeople have time for the chosen customers and the head of sales protects that time when urgent enquiries come in from other areas. To do this, the head of sales needs agreed priorities, an achievable sales plan for the transition and pay terms under which an employee does not lose money for carrying out the new task.

Look, freeing up hours in the calendar is not enough. If a regular buyer writes to their previous salesperson out of habit, and the new person responsible does not yet know the terms, the enquiry will go back. Formally, the customer has been handed over. In practice, the previous employee continues to look after them and also explains everything to their replacement. Until this work is finished, the free time exists only in the calculation.

There is an observable sign that the handover is complete: the new person responsible answers the buyer independently, knows the current terms and takes the enquiry through to a resolution. Any time the previous salesperson still spends helping is counted as occupied. This gives the owner a basis for changing the workload without having to monitor every message personally.

The next conflict is pay. Suppose repeat orders brought the salesperson 40 thousand roubles in bonus pay each month. Half of the portfolio, contributing an equal share of the bonus, was handed to a colleague — leaving 20 thousand. The first deals in the new area are expected in two months. During this period, the employee loses (40 − 20) × 2 = 40 thousand roubles in variable pay. The company has a sales plan for future growth; the salesperson faces a very real drop in earnings now.

I am not prepared to put this down to a lack of initiative. First, the company decides how it will pay for the transition: what amount it will set aside, for how long, and what standard of completed work it will pay for. The head of sales confirms that the salesperson has actually reached suitable buyers, found out the purchasing terms and completed the agreed actions. A list of calls made is too convenient a basis for this payment: it can be built up by calling people who do not need the product.

This also answers the objection that the team was told to sell, yet is asking for preparation time again. With a familiar buyer and a clear way of selling, you can require the result to be repeated. With a new segment, you first have to establish who the offer suits and how decisions are made there. One task requires discipline in carrying it out; the other still contains unknowns. A shared monthly sales plan erases this difference.

Instead of another presentation of the strategy, a short written record of the transition is useful. It has six fields that connect the owner’s decision to the team’s work:

  • Who we sell to. The buyer’s task, mandatory conditions and signs that an enquiry suits the company.
  • What helps us win. The specific advantage of the offer and confirmation that the company can deliver it.
  • What we take off the salesperson’s hands. The previous work, the new person responsible and the sign that the handover is complete.
  • How we pay for the transition. Costs before the first payments, the acceptable reduction in existing sales and the terms of employees’ pay.
  • What the head of sales can put off. Enquiries and internal tasks that will not be allowed to interrupt work in the chosen area.
  • When we make the next decision. The date, the buyer’s expected action and the spending limit up to that point.

The date depends on the steps involved in the deal. If the buyer decides after testing a sample, the test result is needed by the interim date. If the sample has not even been sent, it is too early to discuss demand: first, you need to look into how the work is being carried out within the team. The situation is different if the test took place and revealed a mandatory requirement the product does not meet. This calls for a decision about the offer. The details of this choice are in the analysis of an attempt to enter a new area without any initial orders.

If the owner personally protects salespeople’s time every day, deals with old customers coming back and reminds the head of sales of agreed decisions, the strategy has already been chosen, but the owner is still running the team. At RENTROP, turnkey sales management allows you to hand over this daily work with the team. The direction of the business, prices and the budget remain the owner’s decisions.

The chosen course will always have a competitor — a familiar buyer who is ready to pay sooner. When the head of sales can serve that buyer in the agreed way while keeping work with new customers going, the strategy has passed its first test in day-to-day work. Until then, the company keeps choosing it all over again with every urgent enquiry.