Growing sales is time consuming and costly. In today’s business environment, it’s becoming more and more difficult to sustain profitability, despite increasing sales (that is if you’re fortunate enough to succeed). Longer sales cycles; rising commodity prices; global market competition; intensifying competition for employee talent and increasingly educated customers who demand a faster and more definitive return on investment. It’s time to rethink sales.
A long term focus on growing increasing sales without consideration of how to maximize profitability is like playing Russian roulette; it’s only a matter of time before eroding margins and increasing costs bring about a sudden demise.
Speaking from strictly a sales perspective, the sales force must approach customer relationships in a very different manner. Consider the following 4 components of a profit focused sales approach:
- Customer profitability segments – manage investment of resources in customer account management based on profitability (existing and potential).
- Profit margin thresholds drive account management – customers who fall below this threshold must be assessed to determine whether there is value to continuing a business relationship.
- Customer value drives decision-making – customer value must be clearly understood and qualified in order to validate margin expansion opportunities.
- Collaborative account management – managing a customer account for maximum profitability requires sales teams collaborate with other internal work groups (i.e. manufacturing, procurement, finance, etc).
To “keep more” and increase profitability requires a shift in perspective relative to how businesses are owned, managed and operated. A perspective shift begins with changing the perspective and actions of the sales force.
© Shawn Casemore 2014. All rights reserved.