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M is for Margin

Posted by Rajesh Setty Jan 29, 2014 12:23:00 PM

When salespeople make bad deals, they have a number of ways of explaining them away. Some of them include but not limited to:

  • It’s a loss leader, we will make up in future dealsm-is-for-margin
  • This was just a foot in the door
  • We don’t want our competition to get in there before us.
  • This will be a million dollar deal very soon.
    and so on.

The above reasons may be true and the logic may be sound. But in general, these excuses provide a good cover for making bad deals. It is a way out to justify getting things done quickly at the expense of profit.

Let’s do a thought experiment:

What if the golden rule to follow is to ALWAYS aim for PROFITABLE deals?

Yes, it seems like an obvious thing to do.

This is “Common Sense” you might say.

You and I know that it’s far from being common. There is so much pressure to “win deals at any cost” that unprofitable deals get pursued and thanked for on a routine basis.

When the leadership team makes it clear that we are only looking for PROFITABLE deals, three really good things happen:

1. You will drop a LOT of potentially unprofitable prospects 

Not all prospects are equal so not all prospects need to be treated equally.

It is not to say that you should care less for anyone.

You have to care as much as you can without putting your own survival at stake in the process.  
Now this will be a bit controversial – if you care everyone equally, you won’t have the capacity to care more for people who needs to be cared more.

Who you serve is very important to the company but not at the expense of your own survival. 

2. You will drop a LOT of mediocre salespeople

Good salespeople close “good” deals – deals that are profitable and create value for the customer. 

They go the extra mile to get creative, show the “real value” of buying your product or solution, convince prospects why YOUR company should be picked amongst available options for them. 

3. The RIGHT conversations happen within the company

Either your sales people will close profitable deals or they will find resistance and deals will get delayed.

In the former case, all is well and no conversations are necessary. 

In the latter case, the RIGHT conversations will begin about the following and more:

  • Your overall value proposition
  • Perception of value in the eyes of the prospects
  • The way your offerings are packaged
  • The narrative or the story being told
  • Your company’s brand as compared to the brands of your competitors

Conversations will lead to positive changes and ultimately to positive results.

Last but not the least, there are always exceptions. Ensure that there are NOT a lot of exceptions that you need to deal with.

Other Posts in this series 

A is for Alignment (title changed on Salesforce.com blog) 
 
B is for Bonding
 
C is for Confidence
 
D is for Detachment
 
E is for Excellence in Small Things 
 
F is for Follow Up (On Huffington Post)
 
G is for Grateful
 
H is for Hunger to Succeed
 
I is for Intent to Serve 
 
J is for Judgment (On Huffington Post)
 
K is for Knowledgeable
 
L is for Likeable
 
M is for Margin
 
N is for Nurturing (On Huffington Post)
 
O is for Onward
 
P is for Please
 
Q is for Questions (On Huffington Post)
 
R is for Resourcefulness (On Huffington Post)
 
S is for Storytelling
 
T is for Teaching

U is for Upbeat

V is for Velocity

W is for Word of Mouth

X is for X-Ray Vision

Y is for YourStory

Z is for Zeal

Topics: wisdom

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