Linking Conceptual Selling Tools with Blue Ocean Strategy for Effective Business Planning
Posted in Marketing & Strategy Articles, Total Reads: 4078
, Published on 24 January 2014
Conceptual selling technique is an important technique for service organizations. This methodology is very prominent across organizations that innovates and grows continuously, not all organizations subscribe to conceptual selling frameworks. The professional making the sales pitch carries the entire responsibility of simulating the frameworks on the customers during the meetings. Interesting fact about this pitching technique is that the potential clients are unaware of the fact that he/she is actually playing a subject to the marketer. But not many organizations in the service sector make use of frameworks for strategic sales pitches. The reason behind successful client acquisition might not only be because of the expert handling the sales but also because of implementing strong frameworks and tools.
One such an important tool is the sales funnel. The sales funnel is drawn through the funnel scorecard, which is a tool which calculates the probability of conversion of the prospect to client.
Image Courtesy: freedigitalphotos.net, usamedeniz
This article proposes a new method to link funnel scorecard with a new framework called the “Three Tiers of Non- Customers” a framework of the Blue Ocean Strategy. In this article we shall look at how we can link the two frameworks together and use it as one integrated tool for strategic selling. We shall also be looking at how this integration helps in better sales planning and increasing sales effectiveness.
Introduction to Sales Funnel and Funnel Scorecard:
A sales funnel or a marketing funnel depicts a specific sales process. It is a visual tool which helps professionals in sales to have a roadmap of their sales process. Analyzing the sales funnel managers can identify areas of weakness in sales processes, the stage that needs an intervention and many other predictive sales analytics. The shape of the funnel when studied gives opportunities for managers to plan initiatives to acquire clients. However there are various strategies that can be built to ensure superior sales performance through funnel competency assessments that is used once the funnel is closed. A very useful metric is the use of funnel scorecard.
The funnel scorecard is a tool developed by Miller Heiman which is used by sales professionals. The Miller Heiman tools are powerful sales builder frameworks that are used by consulting organizations and other service delivery firms. The funnel scorecard is a tool which calculates the probability of converting the prospect into client. The funnel scorecard template consist of series of questions for which the manager rates on ten pointer scale based on his/her observation of the client during the meetings. It guides the sales process within the organization. Miller Heiman tools also include various client segmentation techniques. The funnel scorecard is a frequently used tool and is updated after every subsequent meeting with the client.
In this article I propose a new method of using the output from the score card as an input to another framework which can be used along with the regular principle of using funnel scores to plan sales strategies.
The Blue Ocean Strategy Frameworks:
The Blue Ocean Strategy as concept was first introduced by W.Chin Kim and Renee’ Mauborgne at INSEAD Business school. The fundamental principle behind the blue ocean is creation of an uncontested market place that makes competition irrelevant. This doesn’t mean that blue ocean disregards the presence of competition in the market place, what it implies is that these strategies when implemented builds way for robust process in the sales and strategy areas which will help the organization gain a superior advantage that makes it difficult for the competitors to reach.
The idea behind integrating blue-ocean frameworks with the Miller-Heiman tools is that the underlying principle behind both these strategies are similar and both give an assessment of the firm’s position while executing strategies. The array of tools developed helps us analyze the process deeply and gives us directions to proceed.
There are various frameworks of the Blue- Ocean like the Strategy Canvas, 4- Action frameworks, Buyer utility maps, Eliminate- Raise – Reduce – Create (ERCC) Grid, Pioneers, Migrator- Settler Map etc. We shall be looking at one such a framework called the three –tiers of non-customers in this article.
Typically, to grow their share of a market, companies strive to retain and expand their existing customer base. This often leads to finer segmentation and greater tailoring of offerings to better meet customer preferences. The more intense the competition is, the greater, on average, is the resulting customization of offerings. As companies compete to embrace customer preferences through finer segmentation, they often risk creating too-small target markets. To maximize the size of their blue oceans, companies need to take a reverse course. Instead of concentrating on customers, they need to look to noncustomers. And instead of focusing on customer differences, they need to build on powerful commonalities in what buyers value. This reorientation allows companies to reach beyond existing demand to unlock a new mass of customers that did not exist before.
We shall look at how funnel scores can be used an input for the 3 tiers framework to plan an integrated marketing plan for growth in the market.
Linking Funnel Scorecards to Three – Tiers of Noncustomers:
This idea came across while studying the funnel scores of a leading management consulting firm in India. What I noticed was that the scores obtained through the funnel score card were used as a reference point and client acquisition takes place post the arrival of the funnel scores. Prospects with high scores are targeted. But those with a lower score are left to be approached at a later stage. The observation was that the scores obtained are used to take decisions on approaching the prospects in an appropriate manner. Another important observation was that not all prospects with high scores become clients.
Hence a need to address this issue was felt. The blue ocean tools and frameworks were studied and a conceptual idea came across which can take input from the funnel score cards and map it to another framework were the plans and strategies can be formed. The idea here is to build an integrated sales strategy map that gives direction to organizations to acquire unexplored clients. What is more important is that all prospects irrespective of their funnel scores are mapped to the framework which then provides strategic guidance to plan.
The scope of each tier can be defined by organizations depending upon their conversion ratio. A unique aspect of this new model is that it bridges certainty with uncertainty. The scores obtained on the funnel can be mapped to the respective tiers. The threshold levels of each tier can be decided based on trend analysis (based on the level of conversion of clients with respect to the funnel scores obtained in the previous operations).
The terminology provided for the tiers by the 3 tier frame work (“soon to be” “Refusing” and “unexplored”) can be altered according to the business offered by the firm. For e.g.: If the firm is an automobile service station it will look to maximize client repetitions and will not be interested in taping new or unexplored clients. The funnel and the tiers should be set as per the need and service capability of the business.
This model ensures that the prospects with a low probability of getting converted are looped in again so that different patterns of strategies are used on them. The mapping levels can be decided by the organization depending on the scale and scope of their funnel scorecard.
Tier (1- Soon to be , 2- Interested, 3 – Tough to convert)
Present the required service to prospect
Meet the client regularly/ Get opinion about the firm
Build Credibility with the Prospect
The above mentioned table is an example of how the integrated system can function. This can be built as a template along with the initiatives and action plan that has to be carried out like the Balanced Score Card.
The initiatives and action plans for each tier can be fixed after a thorough research on previous tends and with consultation from sales and marketing experts who have had experience in handling different clients.
The framework can be used across different industries in the service sectors like consultancies, Insurance firms, IT sales etc. It can help increase sales volume and market share to a large extent thereby increasing the profitability of the firm.
The framework can bring in an integrated marketing strategy for all client segments. It makes best use of all the prospects by reinventing strategies for them. The tiers can also be defined by the client segmentation type (Size of the client, transactions with the firm, global opportunities).
• This is conceptual model and hence for the implementation of this integrated conceptual selling framework, trends from the organizations have to obtained and a model has to be custom made
• Technology plays a major role in development of this framework. The template version should also be able to give insights and direct users through predictive analytic formulas
• This model will provide a frame of mind to plan for larger volumes of sales and achieve larger objectives as the entire set of customers who can avail the firm’s services are mapped in to the process.
• Marketing and Sales professionals in the organization will play a major role in business planning and strategic business development process.
This article has been authored by A.T.Kaarthik from NMIMS
• Blue Ocean Strategy book by W.Chan Kim and Renee’ Mauborgne
• Picture of sales funnel in Figure 1 from http://www.square2marketing.com/blog/bid/142327/How-To-Use-Inbound-Marketing-To-Actively-Accelerate-Your-Sales-Funnel
• Picture of three tiers of noncustomers in Figure 1 from http://inside.cm.mahidol.ac.th/mkt/index.php?option=com_content&view=article&id=305:-blue-ocean&catid=1:mk-articles&Item
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