Toughest Question Ever!

Filed Under (OP News & Views, OP Sales Training) by Don on 20-09-2010

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Some reps have said I’m a demanding manager.  Not a tyrant by any means, nothing of the sort.  I simply have high expectations.  I have high expectations of myself so it stands to reason that I have high expectations of others.  I’ve learned over the years that if you expect the best from yourself and from others, people will typically make the extra effort to be successful and do a good job.  No matter what the job is.  I discovered that owning a small business was very demanding and it was challenging meeting my personal expectations.  Those days have gone and now I’m on the other end of the ‘food chain’ again. :)

A manufacturers rep told me one day that I was a demanding customer.  I asked him why.  Because he (the mfrs rep) failed to follow-up with a request I had made not once, but on three separate occasions in an effort to get some information to help one of my staff help with a customer sale.  That makes me a ‘demanding’ person?  I simply smiled and told him that if I was as tough a customer/manager as he implied then I would have called his superior after the second request was ignored.  If this makes me a demanding person, then I’m proud of it.  If you are like me then you can relate to how much emphasis I/you place on giving outstanding customer care/service.  You can’t build long-term personal relationships on crappy customer service.  You don’t build loyalty with crappy customer service.  Instead you bust your behind doing what other people fail, or refuse, to do to give your clients the service they deserve.  Don’t you think YOU deserve that same level of service from others?  How about from the company you work for?

How does this relate to the topic of this post?  Oftentimes when I talk to other sales people I like to ask a tough question. 

Here it is: Would you buy product from your own company?

Many, many times the answer is “no”.  The reason is not usually because of a defective or faulty product.  It usually stems from poor service from other areas in the business out of their control or influence.  Their internal customer service fails in some way, or sometimes their accounting personnel has poor people skills or worse yet, unprofessional collection procedures.  Sometimes it is the delivery or warehouse staff or some other distribution issue directly attributed to their company.  While a one-on-one with the reps manager may bring attention to the issues, most often the problems are never corrected.  If you have, or currently experience these kinds of problems then I’m preaching to the choir so to speak.

So I ask you again, “Would you buy products from your own company” and still feel confident that you will have a great buyers experience?  Think about it.

The last word: “Success means doing the best we can with what we have. Success is the doing, not the getting; in the trying, not the triumph. Success is a personal standard, reaching for the highest that is in us, becoming all that we can be.”-Zig Ziglar

Are You Suffering From Margin Creep?

Filed Under (OP News & Views, OP Sales Training) by Don on 08-09-2010

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I suppose you are familiar with price creep.  This is when a retailer takes a product and places it on sale and when it comes off sale the price has ‘creeped’ up higher than the original selling price.  For example if the product originally sold for $14.99 and the sale price was $10.99, when the item comes off sale the new selling price is now $15.49.  This is the most subtle way stores increase selling prices to an unwary buyer.  This type of price increase is especially popular in grocery stores.  So price creep is when the price gradually ‘creeps’ up at a rate nearly undetectable.

Margin Creep is similar.  For my definition: Margin Creep is a gradual downward trend in profit margins due to several causes.  Margins are gradually creeping downward as reps try to be more competitive and gain new business, or the marketplace has become much more competitive and margins have creeped down as a dealer attempts to hold selling prices while his costs (direct or indirect) are rising.  The danger in this is obvious in most ways but what I’m beginning to see is reps are selling products at lower margins for no justifiable reason.  I discovered a rep actually lower an already quoted price that had been accepted by the buyer simply because they discovered that the manufacturer had a ‘special’ deal on that item for the period.  What could have resulted in a 40%GPM unfortunately wound up with a 21%GPM.  I don’t know about you but when I was a commissioned rep I would much rather have commission on a 40 margin than I would a 21 margin!  When I asked  “Why?” there wasn’t a valid reason but it was too late to back out because the customer had already been informed of the price change.

In this case special pricing from manufacturers are designed to help gain new business, introduce new products and obviously support and drive up new sales.  So as managers and owners, how are we supposed to deal with these kinds of issues?  Do we not inform the reps until after the billing is done and then show them the extra dollars they made or do we take advantage of how special pricing deals are designed to work?  I did a little experiment, I let a rep quote and win a furniture job that had an extra margin discount from the manufacturer and I intentionally did not tell the rep of this extra margin that was available.  The rep did a good job selling the customer and won the business.  The job was quoted at an 18%GPM.  The customer was satisfied with the quote and the work after the install was completed.  When the billing was generated the result was a 35%GPM.  More money for the rep and for the dealer.  So, what does the future decide?  You make the call.

The last word: “Don’t lower our expectations to meet your performance. Raise your level of performance to meet your expectations. Expect the best of yourself, and then do what is necessary to make it a reality.” -Ralph Waldo Emerson