Practical example: “Topline Growth” – Sales strategy

Project experience has shown time and again how important it is to create a clear and sound basis for decision-making in order to develop the optimal sales strategy for a company. Market analyses and customer discussions as well as their systematic evaluation form the basis for successful implementation. This is made clear by the following example:

Sales challenges

A successfully positioned international technology group was faced with the challenge of focusing its sales activities even more strongly on the most relevant markets in the coming years and generating above-average growth there. The company’s EBIT margin was not to be affected in the process.

Current difficulties

The high complexity of the product and market constellations had previously prevented top management from agreeing on a uniform line regarding market prioritization. The selection of sales channels and their use were also unstructured and unsystematic. A manageable and resilient decision-making template was simply not available in these areas.

Situation analysis and solution approaches

After a detailed analysis of the initial situation, it became apparent that the market was to be segmented in a meaningful way, above all by product segments and regions. Of the numerous decision-making criteria for market evaluation, the competitive situation stood out as the most important criterion. This is because an overly aggressive approach could trigger an international price war with key competitors at any time. Further evaluation criteria such as market size, ‑growth and price level were combined using a scoring model to form “market attractiveness”. Extensive market research and expert interviews led to the picture presented here.

For a future strategic use of sales channels, the success of previous channels was evaluated based on KPIs such as sales generated via them or frequency of use. In combination with a customer survey and mapping of the customer journey, different touchpoints in the purchase decision process were identified for each customer segment.

 

Implementation and implementation success

By concentrating on individual attractive market segments with largely fragmented markets, it was possible to generate significantly above-average growth in subsequent years without attacking the market shares of the most important international competitors. The focus on the most important sales channels was also consistently implemented and efficiency was even further improved by optimizing the online channels, such as the introduction of a web store. The growth strategy was taken up as part of the pricing strategy and translated into a differentiated price and target margin logic. Growth in the target markets was to be supported by price discounts and the overall EBIT situation was to be stabilized by increased skimming of the less attractive stock regions.

The main competitors hardly reacted at all to the more aggressive pricing in the target markets. Market shares were successfully expanded. This was largely at the expense of smaller regional suppliers. The price increases in the existing countries were even shared in part by competitors. There was hardly any decline in sales in this area. The company’s overall sales increased sustainably without jeopardizing the EBIT level.


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