Too many companies, sales managers and sales reps get excited about a sale….ANY sale…and while sales ARE exciting, they are not all equal. Many companies do not take the time to figure out their sweet spot. Where are they most profitable and where should they concentrate. Even fewer understand their limitations with a plan to either accept them or change them. I once spent time consulting at an organization that was eliminating an entire piece of their business model proactively because it was not profitable enough and kept company resources stretched so they could not grow quickly in their sweet spots. A gutsy but likely wise decision. Being everything to everyone is a tall order.
That seems pretty basic you might be thinking…figure out your sweet spot.. but it is more complicated than simply looking at individual orders, products or customers for profitability. For example, I worked for a custom manufacturing company who was willing to lose profits on individual orders from a key account in order to be awarded an annual contract which included highly profitable items which more than made up for the loss on other orders. For this particular company it also increased their buying power of raw materials which made it easier to be more competitive for other companies.
Senior executives need to spend time thinking about their current niche and where they want to go keeping in mind what the customer’s needs are and what the competition is likely to do and none of this is simple or easy. Still, it is time well spent which eventually needs to trickle down to the sales team so they understand the what and why of their sales focus resulting in a more successful team rather than a sales team focused simply on reaching their sales goal regardless of profitability
