Dear Colleague,
How (Not) to Control Your Sales Results
Problem: Sales is a mystery to many people.
- What happens in that foggy area of the sales cycle between the initial meeting and when the order is received (hopefully by you, but often when your competitor gets it)?
- Why do customers give their business to someone else, when clearly you have the best value proposition?
- Why has that "superstar" you hired a few months ago has failed to produce?
- Why are sales forecasts totally out of whack with reality?
- Why do most companies only "hope" that they'll make their numbers, instead of actually controlling the results?
I'm talking about DISCOUNTING!
Diagnosis: When a sales opportunity starts to waiver the default solution used by most companies is "give 'em a discount to get the business closed". That strategy is very costly in three critical areas:
- The financial impact on your profitability (a 5% discount comes off the bottom line, and if your net margins are 10%, you've just given 50% of your profit away).
- You're training your customers to "expect" a discount.
- You're training your salespeople to rely on discounts to close business.
Prescription: One of our clients had an epiphany in class the other day. His proposition was as follows: If I was selling my product or service to a very close friend, would I give him a discount? He concluded that he would not. His reasoning was that if he cut his price, this would not leave him enough profit to deliver the quality and the service that his friend would expect, and his friend would be disappointed at having bought from him. He might even lose him as a friend. Is that line of thinking a stretch? Not really. Actually it makes a lot of sense, the recession notwithstanding.
Can you continue to provide the kind of quality and service that your clients want if you are marginally profitable (or unprofitable)? Not for long. Will poor quality and lousy service affect that business relationship? Will a dissatisfied customer give you repeat business; how about referrals? You know the answers.
But the real question is what will you do in the sales process? Will you take the easy way out and use discounts or some other costly concessions to close deals, or will you do the right thing? The choice is yours. And you will have to live with the consequences.
Good Selling!
Ron Silver
For more information, check out our website at http://www.NovaSalesTraining.com/ or call us at 910.795.0664.
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