Thoughtful Thursdays - Is it worth it?

Today's thought is about the age old topic of price versus quality. I will start with a quote from many years ago that has helped  me to remain grounded when the subject comes up.

"It's unwise to pay too much but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do. The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run. And if you do that, you will have enough to pay for something better!" John Ruskin (1819-1900)

Price is simple - dollars and cents

Quality can be interpreted in several ways, encompassing many things. In every case, a sale most likely to be made when the price is equal to or less than the perceived quality of the product. No one wants to overpay.

From a sales point of view one of the most common objections we face is typically to do with price. Sometimes it is legitimate, but in most cases the prospect is testing us. How hungry are we for the order and are we willing to sacrifice profit margin at the expense of the value of the product/service we are representing.

On the other side of the coin, at what point is the risk John Ruskin talks about too high before the potential customer decides not to buy?

When you find yourself in a situation where the easy way out is to compromise on price, don't do it without giving due consideration to the consequences.

• The value of the product/service is immediately lowered to that point
• Decreased profit margins
• Ultimate quality may be at risk
• Potential of customer dissatisfaction
• Continuing profit erosion as a result of lowered value

Is it worth it?

Good selling,
Richard

Thoughtful Thursdays - Managing your sales time?

As mentioned previously, a common subject of conversation with my clients is the matter of having too much to do and not enough time to get it all done. We all are subject to this in varying degrees and I have written several times on the topic.

Today's thought deals specifically with managing sales call time efficiently to maximize the return on your time investment.

You have targets in various stages of the sales cycle. Taking time to assess the following may help you determine where your time is best spent.

• Total potential sales volume
• Total available sales to you
• Probability of closing in the next 1, 2, or 3 months
• Value of the order you are working on

With this information you can determine a level of urgency for each your top targets. Obviously you want to spend the majority of your available time working on the potentials that will yield the highest sales in the shortest period of time.
By reviewing your targets and progress on a regular basis your process will become more efficient.

Good selling,
Richard

Thoughtful Thursdays - A process to consider when looking to avoid wasting time

In recent posts the subject of time has been discussed from the point of view of being in control of your time and potential cost implications to a prospect for a delaying decision.

Time is arguably one of your most valuable resources and today's thought focuses on how you might go about saving some.

When was the last time you took a good look at your sales process? Mapping it out is the first step to discovering how and where your time is spent. The goal is not to produce a detailed map as soon as possible, but to improve your understanding, identify opportunities for improvement and solve problems.

You have suppliers and inputs. Add work and you produce outputs that must meet customer requirements. The work is the process you want to map out. You may want to start keeping a log of your time and activities to be sure no steps are left out or taken for granted. Review of previous experiences is another source for this information.

Once you have a list of steps, add major decision points and any loops and support activities that may be part of the process. Take a look at the map as it is developed and walk through it to validate it and make any changes that are appropriate. At this point begin looking for things in your process that are done again.

HINT: LOOK FOR THE THE PREFIX "RE"

• Repeat
• Recheck
• Reenter
• Redesign
• Retest
• Rewrite
• Redo
• Return

These are the steps you want to examine in detail and potentially eliminate.

You can quantify your potential time savings by applying a timeline to the steps in your process. Some of the "re" steps e more worthwhile working on than others. When you do not have a definitive time for a particular step, take a best case and worse case approach. Use the best case as your target. The difference between the best and worst case is your opportunity for improvement.

Accurately mapping out your processes and follow up analysis can yield tremendous savings in time.

Good selling,
Richard

Thoughtful Thursdays - Great expectations

Oyaku donburi, is a Japanese meal in a bowl consisting of egg, chicken, mushrooms and onions (I have enjoyed it with other vegetables as well) in a delicious sauce served on hot rice. For me it is a great all season comfort food.

My friend and I went to see an early movie the other day and were looking for a bite to eat after. We decided on Japanese food and headed off to a local restaurant where we had dined before, albeit some time ago.

The first thing I noticed when we got there was that the ownership had changed. Not a big deal, it happens all the time. The menu remained the same and the staff were as friendly as I remembered.

I had decided on the way that I was going to order one of my favourite dishes, oyaku donburi. The first warning flag flew when the server was not sure what I was ordering. Once I showed her on the menu, all was good...

... or so I thought. I could not believe my eyes when the bowl arrived. This was not what I ordered, it was chicken teriaki on rice. Maybe I ordered the wrong item? No, in fact this is a short version of the conversation that followed:

Me: "This is not what I expected when I ordered oyaku donburi"
Server: "What is the matter?"
Me: "Okaku donburi is egg, chicken, mushrooms and onions (I have enjoyed it with other vegetables as well) in a sauce served on hot rice.
Server: "Tell me how it is made"
Me: "That would the chef's job"
Server: Would you like to order something else?
Me: No

Many apologies later they did not charge me for the meal I did not eat and promised faithfully that the next time we came in, they will be ready to serve oyaku donburi in the manner in which it was expected.

Next time I thought? I really don't think there will be a next time.

I have a theory about the new owners. They purchased the business and unfortunately did not hire a qualified chef. They did not examine the menu and decide whether or not they were capable of serving all the items listed. As a result, my expectations were not met and they have lost one potentially repeat customer forever.

Learning: Do not offer what you can not serve.

Good selling,
Richard

Thoughtful Thursdays - Sales and business management

In most new or emerging small ventures the owner is responsible for managing all aspects of the business. No surprises here.

As discussed in an earlier post titled "Do you manage your sales activities?", time is the resource that the new business owner often runs out of first.

Today's thought is about managing your sales force activities from a business management point of view. As sales manager, you work closely with other members of your management team; marketing, operations and finance.

Exceeding sales expectations is a cause for celebration yet requires and benefits from detailed analysis, just as much as the opposite situation of having a sales shortfall does.

• What affect are your actual sales having on cash flow forecasts?
• Are accounts receivable being received on time?
• Will enough cash be available to pay for forecasted expenditures?
• Do activities have to be postponed or can they be accelerated?
• Are your costs of sales higher or lower than expected?
• How will this affect your planned activities?
• If activities have to be postponed, or can be accelerated, what effect will that have on achieving future sales?
• Is the excess or shortfall significant enough to warrant re-forecasting?
• Are you prepared to scale up or pare down?
• Are you set up to hire contractors or employees?
• Have your operational costs been accurately estimated?
• What affect is that having on profitability?
• Is your business profitable?

At any given point in time it is critical to know where you stand with respect to the following:

• Sales revenues
• Accounts receivable - what money you are owed
• Accounts payable - what money you owe other

There is an interesting case study about a business that experienced dramatic early growth. This sounds like a good situation, and if well managed it can be.

Click here to view the Ivey Institute for Entrepreneurship case study.

Good selling,
Richard