#Business#Strategy

With the parameter of 100 customers per one Sales Engineer we can make a plan for the short, medium and long term about which commercial network I need to develop my business.

Anyway, things are not so simple when it comes to commercial structures. It will depend on a very substantial way how the company wants to approach the market. There are several manners we're going to stating:

1st.) Direct, when the company establishes direct business relationships with companies whose main purpose is not the merchandising and resale of our products and services.

2nd.) Indirect, when the company establishes business relations with companies primarily aimed at merchandising and resale of our products and services.

3rd.) Mixed, when the company establishes business relations with the two previous groups of companies i.e. decides that a portion of sales will aim to direct customers and part of the sales will be targeted to distribution and reselling companies from our products and services.

We will not go today into more detail about the three defined groups. We’ll do it in next publications.

What kind of commercial strategy is most suitable?

It will depend on many factors but especially on the defined Corporate Strategy. Companies with a strong Differential Strategy with unique products difficult to be substituted tend to Direct Strategy. Companies with a Differential Strategy full of "commodities" are closer to an Indirect Strategy based on a good distribution network. But usually the companies have in their product portfolio both categories of products so their market approach strategy will be a mixed type.

And all this, where does it lead? If the company decides to approach the market with a mixed strategy it has to establish if it divides the sales engineers between those visiting direct customers and those visiting distributors plus customers behind distributors or it determines that the same sales engineer serves direct customers, distributors and customers behind the distributors. There may be a third way consisting in a sales engineer visiting direct customers plus customers behind the distributors while another sales engineer specialized in distribution deals with distributors visiting also its points of sales (POS).

Not easy choice because too much will depend on people profiles we have in the organization. It also will depend largely on the size of the company. When a company is starting and resources are limited, it is difficult to reach the specialization of the sales network and for that reason we are often confronted with organizations of the second type i.e. one sales engineer is serving, usually within a reduced geographical area, the direct customers, the distributors and the customers behind the distributors. This type of organization is exceeded as the company evolves technologically with complex products being strong market actions with direct customers necessary to still get their specification.

Therefore, as our intention is to form a selling machine, we prefer the third way, i.e. a commercial structure that will distinguish between direct clients + indirect customers behind the distributors forming a target customer group and another group formed by distributors. We prefer this type of structure that distinguishes perfectly between two distinct sales engineer’s profiles, the customers (direct + indirect) and the distributors.

As it cannot be otherwise, problems will exist and we will face them. The Commercial Management must always have very open communication channels to avoid two parallel commercial networks. The communication between people visiting indirect customers (customers behind distribution) and people visiting distributors must be absolute and effective. Some make the "pull" and others the "push" and there must be at the end a balanced equation.

For all, the need of a powerful CRM is more than evident but the principles remain the same: correct selection of profiles for jobs, teamwork, collaboration and communication. Only then we will build a selling machine!