Your Hidden Profit-Killer:
October 8th, 2013
Many business owners invest significant time and energy attempting to build consistency and growth into their top line sales growth. Few, however, pay much attention to the more important portion of the sales-effort scorecard, the Bottom Line.
Consequently, most companies burn up huge profits by confusing salesperson activity with productivity.
99% of salespeople become salespeople by default. Few, if any, had any preparation or formal training before jumping into sales. Most children do not dream of becoming a salesperson when they grow up and most were not encouraged by their parents to pursue a career as a salesperson. You would be hard-pressed to find a curriculum (or single class) on Sales in most universities, and if you do, it is likely more focused on Marketing than on Sales. And Marketing ≠ Sales. As a consequence, the “profession” of Sales is loaded with incompetence and mediocrity. This situation not only effects top line growth, but cuts deeply into the bottom line as well.
Unfortunately, there is NO quick fix to this problem. Building a consistent, predictable, world-class sales effort takes very serious commitment on the part of company leadership. However, there are things you can do today to eliminate one of the biggest profit-killers in your company. This profit-killer is called Premature Satisfaction™.
Premature Satisfaction™ occurs when a salesperson spends precious (and often expensive) company resources in behaviors they enjoy versus behaviors that effectively produce profit.
Most salespeople spend a lot of time being rejected. They rarely “feel the love” in their selling efforts. When they finally stumble upon a “hot prospect” or “buying signal”, most experience an adrenaline-rush and immediately launch into pitch-mode. This is often the beginning of the end—the end of profit.
The vast majority of salespeople love to be “the expert”. They enjoy talking about things that are comfortable – their company and product benefits, “unique” features, industry “intelligence” and competitive advantages. They often start dropping names and presenting solutions. Many strive to arrive at the perceived Holy Grail – the Demo and/or Proposal.
As salespeople progress through this dysfunctional journey, few ever consider the large COSTS associated with each of these steps. Some of these costs are relatively easy to quantify (e.g.: the cost of proposal creation). For some organizations, proposal costs can be enormous as a percentage of revenue (engineering, design, preparation,…). Even more surprisingly, many companies routinely send MULTIPLE proposals in pursuit of a single opportunity. What a huge waste of money!!!
For most companies, the true bottom line costs of Premature Satisfaction™ are dramatically under-estimated. In fact, Premature Satisfaction™ has a cost in 100% of cases. In the best case, there is wasted time and lower margins. In the worst case, there is lost business, destruction of trust and perhaps company reputation. These types of costs can sometimes be difficult to quantify. They are silent killers that can send a company into bankruptcy.
All solutions begin with awareness and acknowledgement. Is Premature Satisfaction™ an issue in your company? If so, you can begin to re-capture many thousands of lost profit today. It is easier than you think. Here’s how to begin:
- Declare that you will no longer tolerate Premature Satisfaction™.
- Measure your true cost of demonstrations and proposals.
- Develop metrics around conversion rates and proposal effectiveness.
- Use a Qualifier Checklist to improve Sales and PROFIT Growth.
By following these simple steps, most companies can realize a doubling of profit in less than one year.
Copyright © Joe Zente 2013. All Rights Reserved.
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