Tailor Sales Strategy to Segment

In B2B space where direct marketing is generally practiced, sales approach should be defined based on characteristics and behaviors of segments. Especially in technology marketing, the selling organization should be defined suitably to handle different segments. For example, When Hewlett-Packard’s Customer Sales Organization (CSO) observed that groups of its enterprise customers across industries shared common characteristics; it forced a deep-rooted overhaul of its traditional regional sales approach to sell computers and IT infrastructure. It has reorganized the sales organization from region-specific to customer-focused, yet focused on maximizing sales efficiency and customer value by re-engineering its sales process. HP divided its sales organization into three teams (Red, Green and Blue) to handle enterprise, business and individual customers respectively. It deployed sales personnel with deep industry knowledge to handle large enterprise customers.

As technologies become commodities, the sales strategy should embrace solution selling. Besides, pre-sales relationships should be built with prospects to gain edge over competitors. B2B sales teams, therefore, should invest time in developing early relationships with potential firms. Leveraging it, sales personnel should play the role of consultant - should help diagnose problem(s) and at the right time, offer right solution(s). When enterprise customers showed signs of volume shifting, HP transformed its sales approach from product selling to solution selling. It trained its designated sales force to better understand customer’s unique problems and take the consultant route to sell integrated solution, rather selling product. Of course, HP’s CSO had to fundamentally rethink the way it needs to project its sales personnel and re-engineer sales processes to optimize operating efficiency and enhance the return on productive selling time.

Whether market initiated or opportunistic sales opportunities, B2B firms should explore how they can customize their sales approach to match with segment's profile, experience, confidence, etc. In doing so, measures should be taken so that each sales approach ensures higher operating efficiency and customer value. For example, HP’s CSO tailored unique sales strategies to win different enterprise segments viz., repurchase (potential re-buy market), replacement (enterprises leaning to HP dissatisfied with other vendors), expansion (enterprises willing to involve HP in development projects) and innovation (enterprises expecting help in defining need and developing solution). For instance, HP’s CSO adopted a sales strategy of meeting customer specifications of features, price and delivery terms while being available at right time (relationship approach) to win repurchase segment. While product selling is pursued in repurchase and replacement segments, solution selling is practiced in expansion and innovation segments recognizing the perceived difference in customers’ knowledge and confidence on vendor(s). Further, HP’s CSO tailored a four-stage sales process for the first three project types and a five-stage selling process for innovation projects to contain operating costs and maximize customer value.

When client firm offer potential business value, extra care is needed in devising B2B selling strategy. The sales approach, either all-at-once (ATO) or foot-in-the-door (FITD) i.e., capturing downstream business of an enterprise customer first and later migrating to midstream and upstream business opportunities -- should be chosen considering customer firms' relationship values and behaviors. But when all-at-once sales approach is adopted, sales organization should ensure that required resources and competencies matches with corresponding business opportunity streams. Earlier Hewlett-Packard’s CSO had to shift from the foot-in-the-door (FITD) to all-at-once sales approach. This change was initiated after recognizing that factors viz., functional walls within the account, HP’s image as hardware supplier, purchasing community’s interest to control pricing, IT community’s desire to control vendor relationships, top executives reluctance to expand for advisory relationships -- all acted as hindrances when HP’s sales force made attempts to capture midstream and/or upstream business opportunities despite having the required competencies.