Monday, October 27, 2014
Business is a performance art and not just about good ideas, the biggest impact is aligning actual selling behaviors with the required sales tasks. Value is created or destroyed in the marketplace with customers and not in meetings.
Many companies do not have a sales strategy. They confuse their vision or mission statement with a strategy. Strategy involves explicit choices about where, who and how to play in a market, And this must be explicit because it is difficult for your team to execute a strategy that they do not understand.
Here is a sales strategy
To sell high-quality cell phones at low price, Xiaomi keeps each model on the market far longer than other phone companies. On average, a new version of a phone is launched every 265 days in the industry. But Xiaomi does not renew its product for 830days. Then, rather than charge high prices to cover the high cost of components, Xiaomi prices the phone just a little higher than the total cost of all its components.
As component costs drop over the two-year period by more than 90%, Xiaomi maintains its original price, and pockets the difference.
Essentially its profit formula is opposite to most companies, who collects their highest profits with the introduction of each model and needs to come up with new model every few months to keep those margins up.
With a healthy profit and market share, Xiaomi is a success story.
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