Long & Short Term Sales Objectives in Marketing
As a general rule, sales objectives are considered more short-term in nature because of the need for immediate cash flow. However, though there are strategies business employ to build long-term relationships and revenue streams. Implementing long-term and short-term sales objectives can help your business prosper.
Growing a customer base is one example of a long-term sales objective. Companies that see large, untapped markets often sacrifice profits in the short-term to attract targeted customers with deals and promotional opportunities. Amazon.com famously went several years without making a profit because the company had a long-term growth objective that centered on reinvesting in new distribution centers and markets to drive more customers, thus providing more revenue sources.
A basic marketing principle is that it is easier to generate more business from satisfied, existing customers than it is to attract new customers. Thus, companies develop retention and loyalty programs to solidify perpetually increasing revenue from core customers. This includes add-on sales and cross-selling efforts. Revenue earned from existing customers is typically more efficiently converted to profits since you don't have to invest as much to catch their attention. You simply communicate the value of additional products and services. Telecommunications often do this by bundling services to help customers save money as they buy more services.
Two common short-term sales objectives are to generate immediate cash flow and lure in new customers. In some cases, products are sold at a loss to attract price-conscious consumers who might end up becoming long-term customers. Another reason businesses offer promotions and deep discounts is to bring in immediate cash to pay debts and expenses.
Small businesses sometimes develop short-term sales strategies with the objective of appeasing investors who want to see proof that the business is drawing customers. These strategies should be used sparingly, however. Overuse of sales promotions can make it difficult to charge higher prices and improve profitability over the long term.