Fruitful Business? Don’t Sacrifice Profit All in the Name of Making a Sale

Guest post Monday and I’m pleased to have Ashraf Osman, president of Systems Management Consulting International. He echoes many of the principles I regularly talk about.  Your sales motivation and sales success can only benefit from this wisdom:

Many sales reps have their heart set on the value of the contracts they sign.

They sign a $100,000 contract and feel great – celebrations are in order, everybody congratulates the hero and he moves on to the next deal.

That is great in a perfect world, but in a competitive world where customers want everything for as little as possible, our “hero” has to build a healthy sale from the beginning and not resort to burning his/her prices to close the business.

Sales rep who do this usually focus their  mind on the revenue and try to ignore the profitability of the deal by telling themselves  that this is a one-time burning of the  prices and they  will make it up in a future deal.

The reality is that this future deal never comes and once you start burning your prices, you will inevitably continue to do so.

Customers are not opportunistic or manipulative; they want the best deal for their company and so do you.

What you need is to educate them and build together a healthy sale where each party gets what it deserves.

Customers do not know the cost structure of your company. They do not know the cost of doing business, and terms like SG&A are gibberish to them – and possibly to you!

Do you know what SG&A is? It means “Sales, General  & Admin” expenses, which may climb up to 14% in some companies. As a great entrepreneurial sales rep, you should know this figure when you price you goods/services.

The key to fruitful business is to teach your customers from the beginning what they do not know and bring them up to the level of valuing your price even if it is higher than your competition. You want them to know you are in business to stay – you are not a hit-and-run person/company.

In services industry the deal contains:

1)     Fixed cost elements like the machines, SW, material, etc., that you buy at fixed cost.

2)     Subcontracted cost like the cost of subcontractors’ resources working for you during the project duration.

3)     The cost of your resources working for X number of days or weeks.

Your target is to maximize your profitability by:

a)     Negotiating your cost and margin for cost elements #1 and #2.

b)     Making sure you know the real cost of your resources to properly price them.

c)     Making sure you are covered by Change Management mechanism to protect you against scope creeps and slips.

Great sales reps think like business owners. They are not attracted by the revenue figures only, but worry about the health of the whole deal (revenue, profit, payment, collection, reference-ability, and repeat business).

Great sales reps are self-employed to solve customers’ problems by motivating them to invest in their products/services.

Does that describe you?

Share the Post:

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts

Downloadable Sales Resources

Top 10 Reasons Most Prospecting Plans Fail

A Mind for Sales: for salespeople feeling stressed out, burned out, and bummed out. If you’re a sales professional, this book is written just for you. Get your mind right and close more deals with this new business development book.

Subscribe Now

Subscibe to The Sales Hunter Email list to get the latest posts and exclusive sales content right in your inbox.

The Sales Hunter Podcast

The Sales Hunter Podcast features Mark Hunter and top sales leaders, delivering actionable insights to help you become the salesperson you’re meant to be. This show isn’t just for entertainment—it’s designed to empower you with strategies to turn prospects into profits. Subscribe, leave a review, and start selling with confidence!

The Sales Hunter University

The Sales Hunter University offers top-tier sales training available in real-time or on-demand, accessible on any device. Named a Top 10 Sales Development Program in 2022, it’s perfect for sales teams, managers, and driven individuals. Each course is expertly designed by Mark Hunter to deliver the results you need.

Sales Logic Podcast

Ready to amplify your sales impact?

Hosted by sales experts Mark Hunter and Meridith Elliott Powell, Sales Logic answers today’s toughest selling questions with a logic that will help you win more deals and make more money.

When you sell with confidence and integrity, uncertainty becomes your competitive advantage and the sale becomes logical.

The Ultimate Email Prospecting Guide - Mark "The Sales Hunter" Hunter

Download the Ultimate Email Prospecting Guide today!

Enter your information and we’ll immediately send you our most popular download, and add you to our weekly Sales Tip newsletter.