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Does your team need better ways to sell? Don't miss your sales targets due to misqualified leads or poor sales controls. Extract from our compilation of best sales practices that includes frameworks like dynamic pricing models, prospect qualification, contract lifecycle management, ABC analysis, and more.
How can these sales practices help in improving sales team performance?View answer
These sales practices can help in improving sales team performance by providing a structured approach to selling. Dynamic pricing models allow for flexibility in pricing based on market conditions. Prospect qualification ensures that the sales team is focusing on leads that are most likely to convert. Contract lifecycle management helps in managing the sales process from initiation to completion, ensuring that no steps are missed. ABC analysis helps in identifying the products that bring the most revenue and focusing on selling them. All these practices combined can lead to improved sales performance.
What are the benefits of using a sales strategies toolkit?View answer
The benefits of using a sales strategies toolkit include better ways to sell, avoiding missed sales targets due to misqualified leads or poor sales controls, and the ability to extract from a compilation of best sales practices. This can include frameworks like dynamic pricing models, prospect qualification, contract lifecycle management, ABC analysis, and more.
How can these sales practices help in achieving long-term sales goals?View answer
These sales practices can help in achieving long-term sales goals by ensuring that your team is targeting the right prospects, managing contracts effectively, and pricing products dynamically. The ABC analysis can help prioritize sales efforts on the products that generate the most revenue. Overall, these practices can lead to improved sales performance and sustainability.
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In addition to the tools mentioned above, you can also gain access to AIDA conversion funnels, portfolio analysis, buyer and seller journey maps, value-based pricing and marketing radars. We'll also share how companies like Facebook and TikTok, Ford, and Microsoft use these strategies for their own sales funnels.
How have these sales strategies evolved over time?View answer
Sales strategies have evolved over time due to advancements in technology, changes in consumer behavior, and the rise of digital marketing. Traditional sales strategies were more focused on direct selling and personal relationships. However, with the advent of the internet and social media, sales strategies have shifted towards online marketing, data analysis, and customer relationship management. Companies like Facebook, TikTok, Ford, and Microsoft have leveraged these new strategies to optimize their sales funnels.
What are some case studies of successful implementation of these strategies?View answer
Some case studies of successful implementation of these strategies include companies like Facebook and TikTok, Ford, and Microsoft. They have effectively used tools such as AIDA conversion funnels, portfolio analysis, buyer and seller journey maps, value-based pricing and marketing radars for their sales funnels.
How can these strategies be adapted for different industries?View answer
These strategies can be adapted for different industries by understanding the specific needs and characteristics of each industry. The tools mentioned, such as AIDA conversion funnels, portfolio analysis, buyer and seller journey maps, value-based pricing and marketing radars, are versatile and can be tailored to fit different business models and customer behaviors. Companies like Facebook, TikTok, Ford, and Microsoft have successfully used these strategies by adapting them to their specific industry requirements.
The most important aspect of any sales strategy is your pricing. That is especially true when you conduct B2B sales.
While many people know Facebook and TikTok as social media networks, they are actually both B2B businesses with advertisers as their main customer. Facebook, Google, TikTok, and many other social networks that incorporate an ad revenue model use a method known as dynamic pricing to charge customers different rates depending on how large of an audience they want to reach. These advertisers then compete with other sellers for the best prices.
How can businesses adapt to the dynamic pricing model of social networks?View answer
Businesses can adapt to the dynamic pricing model of social networks by understanding the model's mechanics and strategizing accordingly. They should be aware of peak times when ad costs may rise due to increased competition and plan their ad campaigns during off-peak times to save costs. They should also continuously monitor their ad performance and adjust their bidding strategy based on the results. Additionally, businesses can leverage the targeting capabilities of these platforms to reach a specific audience, which can lead to more effective ad spend.
What are some ethical considerations related to dynamic pricing?View answer
Some ethical considerations related to dynamic pricing include fairness, transparency, and potential discrimination. It's important that businesses using dynamic pricing are transparent about their practices and ensure that they're not discriminating against certain groups. For example, charging more during peak times or to customers in certain locations could be seen as unfair or discriminatory. Additionally, businesses should consider the potential for customer backlash if their dynamic pricing practices are seen as exploitative.
How does dynamic pricing affect the relationship between social networks and advertisers?View answer
Dynamic pricing affects the relationship between social networks and advertisers by creating a competitive environment. Advertisers compete with each other for the best prices to reach a larger audience. This method allows social networks to charge different rates depending on the size of the audience the advertiser wants to reach.
Since the pandemic accelerated online spending to $26.7 trillion in 2020, the average starting cost of 1000 impressions for a Facebook ad went up with it. For example, the average starting CPM in 2019 was around $5.12, but by May 2020, it had risen to $7.19. In October of 2021, Facebook's average CPM is $11. Now compare that to TikTok, which brings in $1.3 billion in annual ad sales. In 2020, Facebook generated around $84 billion. In fact, for every one dollar per user TikTok makes, Twitter makes five, YouTube makes seven, and Facebook and Instagram make nine.
What are the implications of the differences in ad revenue per user for different social media platforms?View answer
The differences in ad revenue per user for different social media platforms indicate the varying profitability and effectiveness of advertising on these platforms. For instance, Facebook and Instagram generate nine dollars per user, which is significantly higher than TikTok's one dollar per user. This suggests that advertisers might get a higher return on investment when advertising on Facebook or Instagram compared to TikTok. However, it's important to consider other factors such as the target audience, content type, and engagement rates on these platforms.
What is the potential for growth in ad revenue for platforms like TikTok?View answer
The potential for growth in ad revenue for platforms like TikTok is significant. Despite currently generating less ad revenue per user compared to platforms like Twitter, YouTube, Facebook, and Instagram, TikTok's user base is rapidly growing, which could lead to increased ad sales. Furthermore, as the platform continues to innovate and attract more advertisers, it could potentially increase its revenue per user.
What are the factors that contribute to the difference in ad revenue between different social media platforms?View answer
The factors that contribute to the difference in ad revenue between different social media platforms include the number of active users, user engagement, the platform's ad targeting capabilities, and the cost per impression. For instance, platforms with a larger user base and higher user engagement, like Facebook and Instagram, tend to generate more ad revenue. Additionally, platforms that offer more sophisticated ad targeting options can charge higher rates. The cost per impression also plays a significant role; for example, Facebook's average cost per 1000 impressions has been increasing, contributing to its high ad revenue.
To solve this problem, TikTok launched improved tools for advertisers to better target ads, allow businesses to more efficiently sell through the platform, and will next test subscriptions and tips to complement ad revenue for both the platform and its creators. With more options, TikTok will create greater dynamic pricing with tools that are reminiscent of those rolled out by YouTube in 2018. If they have the same effect, TikTok could see its ad revenue grow by 7x or more — especially now that it just reached 1 billion monthly active users.
Dynamic pricing model is a flexible pricing strategy for B2B sales where prices fluctuate based on market and customer demands. With dynamic pricing, you can add multiple price points for different customer segments so you don't miss sales.
Compare the dynamic pricing model, on the right, to a static pricing model, with a single price point, on the left. With static pricing, there's only one chunk of revenue that grows based on the number of contracts. The negative space around it is all the missed sales that could have been closed at different price points. On the dynamic pricing square, you can see that the more varied and flexible price points you have, the more dynamic your pricing can be, and the less revenue that you miss.(Slide 16)
That's why Facebook is able to make so much revenue - it will accept any bid at any price point from any seller, and therefore only misses revenue if the sellers leave dissatisfied with their results or if competitors offer better rates — which TikTok will now try to do.
The second most important tool in sales is a strong lead sourcing tool. For example, if you want to price according to a target persona, how do you know who that persona is?
To determine which prospect is worth their time, many industries will use a sales development representative to qualify inbound leads. Inbound will always be more loyal because they came to you. Companies that sell timeshares have unique sales tactics: because they offer free vacation packages to customers to attend a seminar, they have already qualified that their lead is cheap. As the sales reps attempt to sell them on a high subscription fee, expensive products like a timeshare, they use specific tactics tailored to a more frugal customer segment.
In addition to their theme parks and movies, Disney sells a similar product with its vacation packages as part of their Disney Vacation Club. Membership to this club can cost around $20,000 with a contract that has a variable end date. Disney qualifies leads to determine which membership level to sell with a system called points.
One way they qualify leads online is with a form field that asks prospective leads to watch an intro video online or get a free DVD. These micro-commitments help to decipher who is in it for the long haul vs those that are just browsing. In addition to bouncing bad leads, it could also turn good leads into a sale, as the more a customer invests in something, the more they want it and won't settle for other options.
Disney will then try to get their vacation club members to attend a seminar or schedule a phone call to be sold over the phone, and use long contracts paid out over several years to lock customers into their program at price points as low as $70 a month with financing and down payments like they are buying a mortgage. In the same way a bank uses credit scores to qualify leads, Disney considers a customer's credit in their lead qualification process as well. Who knew vacations were that serious?
For your own lead sourcing needs, use a prospect qualification tool. This visualization includes different dimensions a sales person needs to ask, beginning with any industry or firm specific criteria, the organizational structure of the lead's company and who is the decision maker, any business issues, compelling events or the client's sense of urgency, the lead's timeframe and finally their budget. Leads can then be scored and judged as they are qualified by the marketing team, handed over to the sales team, and qualified as ready to interact with a rep. (Slide 8)
This MQL to SAL to SQL is a journey, so leads should be tracked according to where they are on the journey. Sharing this slide can help keep all departments and reps unified with the right information. Without this unity, the bulk of leads you generate actually get lost in the shuffle.
So let's say you've qualified leads and even made a sale. How do you keep track of all your outgoing contracts from beginning to end?
Contract lifecycle management, or CLM, is a tool that breaks down the lifecycle of a contract through its ten stages, beginning with the contract request all the way through contract renewals.
Contracts are at the center of Microsoft's core business, as every year the company has to negotiate over 1 million service agreements with major clients for its computers and 365 suite of products. Microsoft used a third-party service for their own CLM needs, where over 100,000 contracts are created each year with over 400 unique attributes per contract and over 20,000 outside views per month. However, the company found it didn't have a unified method for digitizing these contracts, it had no insight over their contract-management data, and every time it switched its contract management solution, it opened up new risks and its users had to adapt to new interfaces and complexities. So Microsoft incorporated the API-based Icertis Contract Management system onto its Azure cloud platform to create an intelligent, automated CLM system that can migrate between contract management platforms. Because the majority of lawyers spend 90% of their time in Word, Powerpoint, and Outlook, the Microsoft CLM made perfect sense.
As you conduct your own contract lifecycle management, you can also use this workflow visualization to keep track of where you are in your CLM process and take notes accordingly.(Slide 5)
Now not all sales are created equal, and your sales team will have different customer segments and products to manage. To make it easier for them, consider an ABC analysis.
Ford's F-Series truck has been the best-selling vehicle in the US for 43 years in a row. Boston consulting group found that in 2019, the F-series made $42 billion in revenue and that if Ford spun this company off on its own, it would be one of the largest in the country by sheer revenue. However, despite having thousands of otherwise totally complete trucks at its factories ready to be sold, the current microchip shortage led to Ford to only be able to sell 158,235 F-series trucks during Q2.
The popularity of the F-150 is why Ford chose to create the F-150 lightning. If even only one percent of F-150 buyers chose to go electric, the truck would essentially outsell half of the existing EV field. So far the company already has over 100,000 reservations, and the hype most recently propelled the company to spend $11.4 billion on three new battery factories and a truck plant. So how was Ford able to make such a bold bet?
An ABC Analysis can help sales teams determine overhead investments to specific products and customer segments that drive the most valuable sales. The y-axis represents the percentage of cumulative value that a customer type brings in while the x-axis represents the proportion of customers in that segment. (Slide 28)
Segment A is your most valuable products or customers. They contribute heavily to overall profit without taking up much resources. In Ford's case, this would be the F-150 Lightning pre-orders, the early adopters ready and waiting to buy the EV at a premium price point.
Segment B is the middle-of-the-road products or customers. With some push, they can be developed into segment A. In this instance, this could be current gas-powered F-series drivers who want to buy a truck this year but have held back due to limited ability or price.
Segment C are the smallest transactions that are necessary but don't contribute much value. This is where most products or customers live, and as a sales lead, you should aim to automate their sales as much as possible to reduce overhead. Automotive companies like Ford plan to do this with upcoming subscription services for software updates for connected cars or current dealership maintenance required at every X amount of miles.
So you know your customer types, you've got your contract lifecycle on lock. Now how do you ensure you reach your sales targets?
To track your converted leads, you can use our KPI Dashboard for sales targets.
On the left, track your lead conversion ratio across the sales funnel.
In the middle, use a bar graph to follow your total converted leads over the last thirty days, and use a pie chart visualization to track your opportunity to win ratio.
On the right, visualize the performance from various sales reps and their various conversation ratios. All of these tools link to a spreadsheet where you can import your data.(Slide 33)
Plus, if you need a tool to track your B2C sales team, you can use this slide to compare your previous sales progress, your sales performance against quotas, and even track inventory. You can also monitor weekly sales and where your customers are buying products from across various regions.(Slide 34)
For more Sales Strategies Toolkit, download this framework for your needs. You'll gain more tools like AIDA conversion funnels, portfolio analysis, buy and seller journey maps, value-based pricing and marketing radar. Plus, if you like this toolkit, check out our other Sales Strategy which you can also download and customize to your needs.
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