What is a Sales Strategy Pyramid?

Posted on October 26th, 2015

 

Sales Strategy Pyramid

A sales strategy pyramid is a tool that assists in developing customer segmentation and channel strategies for your company. The pyramid gives a total picture of customers you serve at the moment and customers you want to serve in the near future. The purpose of the pyramid is to force the supplier to precisely define its channel strategy for the customers it is targeting in each tier of the pyramid.

Most businesses can describe their customer base in a pyramid in which the average customer spend increases and the number of customers decreases as you move up the pyramid. In the bottom tier there are many small customers. The number of tiers in your particular business is entirely defined by you and it is quite possible that in a 5-tier pyramid, only the top-tier customers are dealt with directly and all other tiers are handled by channel partners. Let’s illustrate this with a real life example of a company selling medical wear.

Sales Strategy Pyramid for Channel Development

Direct customers are served without involving third parties. The company has its own sales force and serves these customers directly from Ireland. Customers are only a few dozen in number but generate 50% of revenues.

Distributors are channel partners and they can reach thousands of customers in different geographical regions. This indirect channel also sells other products such as school wear and sports clothing.

Web shops can reach tens of thousands of customers, most of the time individual practitioners. The company’s sales strategy is to generate web traffic and it creates demand through e-mail marketing.

The above example illustrates how much value channel partners can add to your business. These partners have their own sales strategies and bear all of the selling costs. There are different parameters for each tier and by using them you can build your own sales strategy pyramid. Have a look at our web app and try it yourself!

Qupact has launched an app to help companies find different types of sales channel partners to develop routes to market. Register for a FREE trial today and find Export Sales Partners and develop a Distribution Channel Strategy. http://www.qupact.com