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ISO 9001 Compliant Program: Steps to Build
Implementing an ISO 9001 system represents a major effort. However, all of that effort can represent a significant shift for a business - from quantity to quality. And this could make sure your business gets the desired results.
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Sales Commission - What Return Should You Expect On Your Sales Compensation Investment?
This article answers the following questions:
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Do you realize that you might be prevented from renting your investment home? Prohibiting property owners from leasing their properties is a trend that is growing increasingly popular with some developers and many Homeowners' Associations (HOA).
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Astute Pricing By Sales Representatives Can Expand Profit
One surefire way to grow profit is to deploy sales resources that masterfully price your company’s products and services. The right price can boost profit more than improvements in the cost-of goods sold or reductions in SG&A. For example, a 1% improvement in price expands operating profit by about 12% whereas a 1% improvement in cost-of-goods sold (COGS) or selling, general and administrative expense (SG&A) only yields an operating increase of about 8% or lightly more than 2%, respectively. (1)
Inappropriate discounting dramatically shrinks profits. TopMark’s analysis revealed that price cuts of .5%, 1% and 3% reduced gross profit by about 2%, 3% and 10% respectively. (1)
Pricing discretion should be delegated to appropriately trained sales representatives who have demonstrated an ability to sell on total delivered value. That is, those who effectively appeal to customers’ needs for lowered product-life operating costs or other financial benefits. Under this sales approach, product price is a function of return on investment rather than a cost.
Selling on total delivered value requires sales representatives to know their customers’ businesses and profit making formulas. Supplementing this information should be a knowledge of: 1) customer-specific costs and price data (including won and loss quotes) and 2) competitors’ price levels and value propositions. Thus armed, sales representatives will be able to:
> Identify those customers whose business costs or profits can be improved significantly through the product/service solution they’re offering;
> Quote the best price indicated by the relationship between market prices, their current price positions
at the customer and the price targets management wants the sales representative to achieves; and;
> Avoid “leaving money on the table.”
Typically, different functions – each with their own buying criteria – have input into a purchasing decision. It is important, therefore, that a sales representative understand the buying criteria of each decision maker or influencer in order to tailor the extent a sales message emphasizes product performance and economics, warranty, parts availability, service, etc.
Finally, price acceptance is highly dependent upon how effectively a sales representative structures and communicates the deal. How a price is structured is as important as the price tag. Such off-invoice items as volume discounts, year-end rebates, payment terms, discounts and freight can influence the customer’s price perceptions.
(1) Results are based on TopMark’s analytical sampling of manufacturing-dominated, publicly-traded companies.
About the Author: John F. Tallitsch is the founder of TopMark, a consulting boutique specializing in sales effectiveness and sales compensation. TopMark helps companies create finely-tuned, results-oriented sales capabilities through solutions encompassing: customer segmentation and targeting; sales strategies; sales force and territory design; performance-driven sales incentives; and talent strategies. You can contact John at 440-963-1240 or visit http://www.top-mark.com for more information.
Source: www.isnare.com
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