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Double Glazing Blogger: It's Time To Wake Up Sales People!

Thursday, June 23, 2011

It's Time To Wake Up Sales People!

Why is it that when companies are being told time and time again that making a decent profit margin is an absolute priority, am I still surrounded by fools who still think it's a good idea to sweep their quotes so much they're doing the work for nothing? All to make sure they win the order? Whats the point!!


We have one of two reasons to choose from here folks. The first choice is that the people in charge of these companies have no basic understanding of mathematics and have no business skills. They don't understand that in a time of economic hardship, the work they bring in must have some profit attached to it so that they can stay afloat to hopefully make more money and honour the guarantees they give out.


The second choice we have is that they are unable to sell the benefits of their product over their competitors'. They feel that the only way to secure a deal is to make it cheaper than everyone else's, even if it means making very little or nothing at all. But they think it's OK because even though they're doing it for nothing, no else has got the work.


Which ever reason you pick, both are ridiculous. Duncan Bannatyne was on Sky News Wednesday morning and the news reader asked him what was one of the biggest mistakes people make in business. He said that one of the biggest failures of people in business was people blaming everything but themselves for their shortcomings. And this applies here. I don't believe that you can't make a decent profit during times like these. If you sell your benefits well, believe in your product, know your product inside and out, and provide exemplary service from the beginning, there's no reason for your quotes to have little or no profit. These hairy fairy excuses of 'there's too much competition' and 'times are tough' don't wash with me. We managed to increase our profit margin all the way from the recession in 2008 to now - through professional salesmanship good business sense.


And you don't have to give in you know, when a customer asks for a discount, more times than not they're prepared to accept the quote you gave them in the first place, they're just trying their luck.


You may ask why I'm so bothered about this. It bothers me because the reason why people are in business is to make money. Why else would businesses exist? Yet during these last few years we've seen many people lose their heads, become irrational and have forgotten how to run a business effectively and profitably. This to me is completely unacceptable when there are people's jobs and livelihoods at stake. Owning/running a business means you have a lot of responsibility, if you can't hack it, leave and don't run the company into the ground!

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8 Comments:

Anonymous Anonymous said...

If a business is on a downhill spiral, they're going to slash prices, even if it means only making a marginal profit.

Some companies bring this on themselves by not changing their ways and adapting to a different market, but I think it's foolish to lambast every company in that respect.

Not everyone can convert a lead over their competitors - new businesses for example. So, essentially, they have to slash prices just to get in the game.

If you hold out through the hard times, doing jobs for little, then eventually you'll build a good portfolio that would attract future customers at higher prices.

June 23, 2011 at 10:17 AM  
Anonymous David Bingham said...

Anonymous - I agree with DGB. We don't want a portfolio of business with little or no profit and how long can a company hold out through the hard times? How long is this recession going to be and how long will it be before you attract future customers at higher prices? Good quality products, good service, good reputation, professional sales people and fair prices is the only way forward. There's no easy solution or short cuts I'm afraid.

June 23, 2011 at 11:21 AM  
Anonymous Anonymous said...

Well, it's either a portfolio of successful business or nothing for some companies. Which is exactly why they're forced into slashing prices.

Once you've built a reputation for all the things you mentioned, then you can up the price.

If a customer can choose between two companies competing at the same price - one with a history of great service under their belt, and the other a relatively new business with little background - who do you think they'll choose?

That speaks for itself.

June 23, 2011 at 12:03 PM  
Anonymous David Bingham said...

The customer will choose the company with the best sales person every time(no matter what the price, within reason). The occasional customer will buy on price alone but this is very rare. Slashing prices is very easy but its not the solution. Selling cheap is easy but its not selling at all, its simply quote beating which is crazy. You don't need to employ sales people for that.

June 23, 2011 at 1:02 PM  
Anonymous Anonymous said...

So if one company has a better sales team, they will effectively win every single lead.
The only way to counteract that is to lower the price you're charging.

Obviously you could recruit better salesmen, but there's no real chance of winning customers over if the competitor has an exceptional sales team themselves.

Here's a thought though - if you cut your competitor out by lowering the prices, eventually they'll have no customers.
Then you can start charging whatever you want.
Or is that too shrewd for the double glazing world?

I wouldn't know, as I'm not in the know.

June 23, 2011 at 2:06 PM  
Blogger Double Glazing Blogger said...

Anon - by cutting out your competitors, then yes in theory they would have no customers. But the state of your business would be dire. You would build up a reputation as a cheap company which you would struggle to get rid of because the customers you will attract will be the ones wanting cheapest wins, so will expect you to quote as cheap as you did for others.

Even if you're a start-up, you don't have to start cheap. If you set yourself up with the right high-end products and the right staff in the first place, then a higher price is absolutely justified. This is when your sales staff do their job of selling a better product for a higher price. Good sales people can do this day in day out.

We don't win every lead, but the ones we do win have good margins, ones we haven't had to slash. So even though we don't have a 100% conversion rate, our business is healthy.

David - thanks for the mention on Glasstalk by the way! We need this industry to be populated by professionals who know how to run a good business efficiently and profitably.

June 23, 2011 at 7:43 PM  
Anonymous Anonymous said...

But isn't part of business beating your rivals/competitors to custom?

Even by not slashing the prices dramatically, but instead reducing the costs to beat your rival's would win custom.

Plus, locally owned companies won't have a huge sales team and advertisers to pay and support. They could be a one/two/three man band, who can cope with lesser profit margins.

In summary of everything I've written here, I firmly believe that focusing long term, rather than short, will win you the war.

After all, Rome wasn't built in a day.

June 24, 2011 at 10:12 AM  
Anonymous David Bingham said...

Anonymous - Selling cheap is a very easy way of selling and after 24 years in this industry, I'd be taking that easy way out if I thought it would work.

Low margins are short term as they are unsustainable.

I do however agree with your comment "focusing long term, rather than short term will win you the war" ;)

June 24, 2011 at 11:32 AM  

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