Adding More Profit to Your Sales
Gross profit is the lifeblood for those sales professionals who care about commissions. While you may feel that every sales rep cares about profit, the truth is that the growing trend in many sales companies is to not pay their sales associates commissions.
Regardless of what you may feel about non-commissioned sales positions, if you aren't in one of these non-commissioned based sales jobs, you are probably very interested in methods of increasing profit.
Here are a few time-tested and proven profit building methods.
There's something strange that happens when a sales professional shifts their focus from earning a healthy paycheck to helping their customers. When you put your customers first, you build trust, rapport, and loyal, life-long customers.
But don't confuse giving away your time, talents and products away for low or no profit with being helpful. Being helpful often means challenging your customers when they are about to make a mistake. Being helpful also means standing firm on your pricing since you know that a win-lose deal does little to build a strong customer-rep relationship.
If someone asked you what you think would be the best way for a golfer to improve her game, you might answer with "always work to improve the fundamentals."
And so it is with sales. Focusing on keeping your basic sales skills strong, sharp and ever-expanding is a great way to not only close more sales but to also have the know how to build in more profit into those sales.
Add On Sales
Those in auto sales know an awful lot about add-on sales. Once a customer agrees to move forward with the purchase of a new vehicle, extended warranties, rust proofing, gap insurance and a slew of other options are offered. In most cases, these add-on options are ripe with profit, at times reaching well over 100% profit margins!
Internet giant Amazon also knows the value of add-on sales. Amazon offers several low priced products only as add-on sales to customers purchasing more than a set dollar amount. Amazon benefits by increasing their revenue per sale and also increase profit by combining low priced items with larger items and reducing shipping costs.
What products or services can you add on to your sales?
Guard Against a Commodity Mindset
What kills profit faster than most anything else is when the sales rep or sales company begin to see their product or service as a commodity. A commodity is something that consumers see little value in and purchase based on a recognized need.
While a sales professional may not be able to do much about how a marketplace views a product or service, a sales rep can (and should) do whatever is possible to make sure that they never view their product as a commodity. Once that happens, building value is nearly impossible.
You may find it hard to believe, but the most powerful and effective way to build profit into your deals is to ask your customers for more profit. That's right, ask your customer if they feel you've earned the right to build in a few more percentage points of pure profit.
They may say "no," but you'll be surprised at how often a customer who appreciates the efforts their sales professional put forth will agree to pay a little bit more in order to reward their rep.
And if your customer says "no," you may want to review the entire sales cycle and see if there were some areas that you could have provided even better service and more value.