Sales managers without even trying are very good at taking profit right out of their company.
They do this because of how they handle things with their salespeople who in turn offer customers discounts.
Sales managers place inordinate pressure on salespeople to close the sale immediately, and in so doing, they are telling the salesperson to cut the price as a way of getting the order now.
Yes, it’s necessary to place pressure on salespeople, but placing pressure merely for the sake of pressure is stupid.
When a sales manager places pressure, they need to do it with guidance as to how the salesperson should handle things. This means giving them advice and support in how to close the deal immediately without a discount.
Another thing sales managers do is extol to everyone the sales success a particular person may have had in closing a deal, regardless of the profitability. The salesperson who closes an order without a discount receives the same praise and bonus as the person who closes a deal with a discount.
When this happens, it doesn’t take long for salespeople to realize how selling at full price is not something they need to strive to achieve.
A third way sales managers undermine price is they fail to support their salespeople on what the price is supposed to be. Sales managers need to ensure all of their salespeople know the price point they are expected to get.
Discussions between the sales manager and the salesperson before the sales call need to be focused on matching the offering to the needs of the customer and how to ensure the customer understands.
The discussion should not be on what concessions should we be ready to make if we face pushback from the customer. This type of discussion only serves to undermine the confidence of the salesperson.
If you are a sales manager, look back over how you have managed in scenarios where price and profit are discussed and examined. Are you making it too easy for your sales team to rely upon discounting? If so, then you need to right the ship and start being part of the profitability solution.
Copyright 2013, Mark Hunter “The Sales Hunter.” Sales Motivation Blog.