I pride myself as being a dumb sales guy. I do that as joking with customers when we have talks to lower the bar so when I over deliver, I look better in their eyes.
One thing that I had to learn as I played in larger value discussions is understanding that more revenue did not make the organization more profitable. That’s right, just selling more stuff does not out sell our costs sometimes. When we are setting up sales prices to drive our revenue, we really need to study the P and L. That’s profit and loss.
As I have grown my capacity as a sales professional, I have learned that profitability is more important than sales revenue. If we sell at negative profit margins then we will soon be bankrupt. Unfortunately, I did not understand this concept when I first got into sales.
I was constantly frustrated when we would have a sales program that would have iteration 4 by the time I booked half of my customers. I would have to keep changing my prices weekly so some customers would get a price increase, or decrease and there was no way I could control it.
Let me share a word of advice. If you think customers don’t talk to each other even though they say they are adversaries, you are wrong. They talk and usually are more friends than we realize.
What can we do as sales professionals to understand the profit and loss better? Why not ask questions and continue to learn how the organization functions? If it is an organization that fosters a culture of growth and service then they will likely see this request as a way to help groom a future executive.
We need to understand the basics of our profitability if we are going to sit with a customer because they will always ask for a better deal. We do it whenever we go out and shop, so why wouldn’t our customers ask. When we understand our profitability then we can truly know why we can or can not drop the price. We need to understand this if we are going to be successful.
If we go out and sell a bunch of products / services at losses we will soon be “promoted to customer.” That’s just a nice way of saying fired. We need to take pride in understanding our profitability if we are going to succeed.
This does not mean that we need to go to college to get a financial degree to understand terms. I haven’t done that. We should learn about those terms and understand a P and L sheet as well as ask questions. Yes, we have to be vulnerable enough to ask for clarification and understanding. This is hard for sales people because we want to think we know everything. The truly smartest people are those that know their limits and are okay with being vulnerable to learn.
Knowing our profitability will allow us to gain more success and a better future.
Have a great week!
“Businesses wonder why it is still hard to be thought of as the brand of choice with customers. How can our business make more profitable transactions and stay out of the commodity battle with low profits? I equip your sales team to walk with the customer through the five buying decisions, and in the correct order to generate explosive revenues with greater profits!”
https://drive.google.com/file/d/1lWIVasmkFsoYL4h0AqIZgH6LC3qaw_gI/view?usp=sharing – client profile sheet
https://www.amazon.com/Sales-Process-Uncovered-Success-Influence/dp/0578421518 - Book
https://kevinsidebottom.kartra.com/page/5AF12 - Sales Process Uncovered Online Training
https://kevinsidebottom.kartra.com/page/68N10 - Trustworthy Online Training