- Organisational strategies that make organisations conducive for sales involve word-of-mouth advocacy, incentivise your employees, number of payment options, sales contests, revenue strategies, affiliate programme, bulletproof guarantee, product performance, and employee performance.
- Incentives plan ratios include individual incentive (time-based and output-based), group incentives, and organisational incentives.
- It is beneficial for increasing sales to provide numerous payment options.
9 Types of Organisational Strategies
Strategic planning is very important to make organisation conducive for sales.
9 organisational strategies to make organisations conducive for sales:
The nine organisational strategies are as follows:
- Word-of-mouth advocacy
- Incentivise your employees
- Provide maximum number of payment options
- Sales contests
- Revenue strategies
- Create affiliate programmes
- Offer a bulletproof guarantee
- Product performance
- Employee performance
1: Word-of-Mouth Advocacy
Make numbers of advocates by using various strategies. You can use different types of strategies for this purpose, such as make:
Customer → Repeat customer → Loyal customer→ Promoter→ Advocate
Make customer a repeat customer, repeat customer a loyal customer, the loyal customer a promoter, and promoter an advocate.
For example: Strategy of Harley-Davidson:
- Harley-Davidson noticed that young children of some well-to-do families are very fond of noisy and big Harley-Davidson.
- Harley-Davidson announced to make a free tattoo, of worth Rs. 25,000 whosoever takes a free ride of bikes.
- A lot of youngsters got gathered to get Rs. 25,000 tattoo designed for free.
- A tattoo of Harley-Davidson was designed on the arms of the youngsters and the bill for tattoo-making was also raised but said it is free no one needs to pay for it.
- Now youngsters have got the costly and good quality Harley-Davidson tattoo designed on their arms.
- All youngsters having a Harley-Davidson tattoo was showing off it in the whole country.
- This strategy was promoting Harley-Davidson because the logo was of Harley-Davidson.
Advertising brings in customers, but word-of-mouth brings in the best customers.
If word-of-mouth advertising makes customers advocate and do advocacy, then it helps you bring in the best customers in the world.
Word-of-mouth advocacy gets you the best customer and advertising will only get you some customers.
It is very important to build such a rewarding model that customers come to you and joins you.
2: Incentivise Your Employees
There are various models to incentivise your employees. Give incentives for the following:
- To get tax benefits
- Make consumers of the company as a producer of the company. He/she will work hard and produce. He/she will be a performer, not a parasite.
- The cost of your company will increase only when profits will increase.
- To increase the loyalty of your workers.
- To increased the productivity of your employees.
You should plan incentive ratios properly. It should include:
1. Individual incentive: You can give two types of individual incentives. It involves:
- Time-based: You are doing some production. Here incentive is provided upon the less time taken for production. You need to develop a per hour wage rate.
- Output-based: It means incentive is based upon the maximum production done. You need to develop a per-piece wage rate. The incentive will be given on the number of items produced. If an employee needs to make 100 items then he/she will be given incentive on items produced above 100.
Profit or gain Sharing Model:
You can make a profit or gain sharing model in incentive. This is very easy with the sales team. The sales executive will gain a share of the profit he/she will bring to the company. The model may include:
- Cash plan: If you will make sales of Rs. 1 crore, you will be given an immediate cash incentive of 2% means Rs. 2 lakhs.
- Deferred plan: You earned an incentive of Rs. 2 lakhs but you will be given after 5 years or at the time of your retirement.
- Combination plan: You earned the incentive of Rs. 2 lakhs, take Rs. 1 lakh in cash, and Rs. Lakh after 5 years or at the time of retirement. The cash and the deferred plan get combined in the combination plan.
Profit sharing model is of the following types:
Straight profit-sharing model
- Hurdle-rate profit-sharing model: You will not be provided any incentive up to Rs. 10 Lakhs sales. The incentive will be given on the sales amount above Rs. 10 Lakhs. You created a hurdle for your employee. He/she will get the incentive only after crossing the hurdle.
- Goal-driven profit-sharing model: An incentive model can be made to a goal-driven profit-sharing model. You will be given the incentive after you will achieve the goal. It may also include:
- Goal-based cash bonus: You will get an incentive on reducing the cost. You will get an incentive on increased revenue. You will incentive on making the customer satisfied. A goal is decided in this to earn incentives.
- Pay if stay: You will receive an incentive if you will stay with the company. The pay if the stay model is good if people are leaving your company. The incentive will be given for long-staying with the company.
Long-term stock-based incentive (ESOP)
- Career development training: This is also an incentive. Individuals and the team can also be given an incentive.
2. Organisation incentive
3. Group incentive
Burn the fire in the belly to create history.
3: Provide Maximum Number of Payment Options
You should also increase your payment options. Many times, good payment options provided during sales also give a benefit.
For example:
- GREE air conditioning when started selling in India, it was facing a problem, so it changed the payment options and used EMIs.
It is due to the popularity of mobiles, companies now have increased the number of payment options. It is of many types. Mainly, it is increased due to online selling. Alternate payment methods other than cash include:
- Credit card
- Barter
- Wire transfer
- Mobile payments
- NBFC financing
- Google pay
- EMI schemes
- Money order
- Razorpay
- Digital wallets
- Demand draft
- eNACH
- Prepaid cards
- Cheque
- Net banking
4: Sales Contests
Conduct some contests among your employees. This will make them compete due to fire in their bellies.
Sales contests help to increase the competitive spirit of employees. Employees will compete for doing maximum sales. This will help them in achieving sales goals. You can give them:
- Luxury vacation
- Large cash amount to motivate them to achieve sales goals more enthusiastically.
- Fine dining experience
- Preferred parking
- Spa day
- Tech gadgets
- Entertainment tickets
- Free accommodation
- Gym membership
- Lunch with CEO
- Presidents club
- Club membership
- Travel vouchers
- Celebrate individual success in office
- Video case studies of star performers
- Medical insurance/Free health check-ups
- Scholarship for kids education/Loan for higher education
- Employee of the week/month/year
- Star performer’s success stories in the internal magazine
- Work from home/Flexible Work Schedule
- Trophies and Certificates (Replace them with cash)
- Post photos on social media/Case studies of star performers
- Send star performers to represent the company, and to receive awards on behalf of the company.
- Allow some extended leaves or special incentives for employees.
5: Choose your revenue strategy
Plan your revenue strategy also. How will you increase revenue? It involves the following:
- How an additional revenue stream can be built?
- Will you bring new channels?
- Will you add on new geography?
- Will you bring new products?
- Will you do online selling?
- Will you do direct selling?
- Will you do sales through a wholesaler?
- Will you do selling through retailers?
- Will you sell through distributors?
You have to choose your revenue strategy out of the following:
- More customers – More turnover
- More transactions – More turnover
- More frequency (Loyalty) -More turnover
- More price (Strategic i.e. you can sell high price items based on strategy and competitive advantage) -More turnover
- More products (Increase the range of products) – More turnover
6: Create Affiliate Programmes
An affiliate programme is also one method of developing networks. It is a different form of network. You can do cross-promotions in the affiliate programme.
Examples of strategic partnerships are window installation company tie-up with a window cleaning company and Software company tie-ups with IT support.
Numerous cross-promotions also take place such as Airtel and LG, Andriod and Kitkat, PizzaHut and Pepsi, Domino’s and Coca-Cola, Amazon and iPhone, and McDonald’s and Coca-Cola.
7: Offer a Bulletproof Money-Back Guarantee
This is also a good strategy. Money-back guarantees are of various types. It is providing a form of guarantee to your customer. Here it will not be called a money-back a guarantee. It will be denoted as guarantee (bulletproof guarantee offers). It includes:
- Money-back guarantee: You reverse the customer’s risk. Customers like to make purchase as it does not have any risk. The method of giving money-back guarantee involves 30 days, 45 days to 90 days guarantee in case of a very good product, some sellers give 1 year or lifetime guarantee on some items.
Sales depend upon the duration of the guarantee. Few customers return products after buying. Many customers buy due to guarantee. You don’t have any tension if some product is returned. It is because already maximum sales have been done due to guarantee.
- Money-back with product guarantee: It is a money-back guarantee plus product guarantee also. Customers are said to use the product and their money will also be returned if a problem arises.
- Buyback guarantee: It means that if customers do not like the product, then they can sell back it to them, such as Flipkart does for its mobile phones and Urban Ladder does for its furniture.
- Low price guarantee: BigBazaar does a low price guarantee that no one can sell cheaper than us.
- Free service guarantee: It is provided with purchasing of 2 wheeler, AC, and RO.
- Cashback guarantee: PayPal, Paytm, Mobiwik, and Google Pay provide such guarantees.
- 100% placement guarantee: It is given by colleges, universities, and institutes.
- Zero guarantee: This is also a guarantee of not giving any guarantee. This is done by Apple. Apple says, “Our product is excellent and we won’t give any guarantee.”
- Replacement guarantee: It can be done in many ways.
8: Product Performance
It is important to properly measure the performance of the product i.e. product is performing well or not performing well.
- Volume of sales by product line: If you have 20 products, then find out the revenue earned by sales of one particular product and compared to the average revenue of remaining individual products.
You can remove some products as they are not good. You should measure the performance of the product. Never keep bad products.
- Volume of sales by location: Check sale of individual products location wise. Find out the percentage revenue of the product at a particular location.
- ABC analysis: You can do ABC analysis also. Classify products into:
- Category – A
- Category – B
- Category – C
This will never make your stock dump or hold.
FSN analysis: This involves:
- F – Fast-moving products
- S – Slow-moving products
- N – Non-moving products (means remove this product)
Acharya Bal Krishna has given a proper case study on this. He has explained the following:
- Understand your market size.
- Launch product after checking the quality of the product. Keep removing the bad quality products.
- The product should match your brand identity.
- You should have enough manpower to produce and sell that product.
- Raw material quality is also very important.
- You can also check retention and churn rate if you are measuring product performance. Find out the number of customers leaving you every month due to a bad product.
For example:
- At a time, you have 1,00,000 active customers but 10,000 customers have left you then the churn rate has increased 10% due to that product.
9: Employee Performance
It is also important to check the employee performance. It is done to check the:
- Lead to close ratio: Check the number of leads closed out of the given leads to the employee. You have given 100 leads and the employee has closed only 10 leads. It means that employee is not performing well as remaining employees on an average are closing 25 leads out of 100 leads.
- Opportunities identified v/s sales conversion: Measure the opportunities given to employees and actual sales done out of the given opportunities. Many employees do not perform well. They will ruin your leads. It takes so much effort to generate sales leads. Customers come to your shop, factory, or online store for your service after so much of advertisement done and money invested on leads. All efforts may get ruined by an employee. This should also be measured.
- Pipeline value: This means, how many customers are ready to purchase your product. Some businesses may have a pipeline of Rs. 1 Crore. Some may have pipeline value of Rs. 20 Lakhs as they don’t have many customers who are committing to purchase the products. Find the number of hot customers in the pipeline value.
- Percentage of sales team members achieving quota: Check about the team members who can achieve their targets.
- Sales funnel leakage: You can also check your sales funnel leakage. For example, 40% of customers showed their interest in purchasing products, out of that 20% customer took demo also, and out of that only 5% of customers purchased. It is maybe that your sales funnel has leakage. Check all the formulas of your employee performance. Check the following:
- Employee is not giving any wrong demos.
- Employee is not able to qualify sales properly.
- Employee is not able to negotiate properly.
Note Down:
- Use organisational strategies to increase sales of your company
- Make proper use of organisational strategy to measure employee performance
- Make the right incentive plans to increase sales and motivate employees