My sales team are value adding and it’s killing me.

Dear Aunty B,

I am at my wits end. I have a gun sales team that I have built over years and I can throw them at anything and get results.

But in the last few months we are feeling the affects of the GFC and they have worked overtime to get results. The problem is they keep throwing in bibs and bobs to get the sale and as a result our profit on each sale is lower.

I keep pointing this out to them but they are so focussed on getting that sale (which is what I have trained them to do, I admit) that I can’t get them to understand the bottomline.

They say they are value adding so they don’t have to discount. How can I get them to change without affecting their sales?

FT,
SA

Dear FT,

Look at it another way. Your sales staff are subject to huge pressure from your customers, especially in the current environment. And without pressure and assistance from top managers they will have trouble maintaining adequate profit margins.

What you need to do is have a very frank chat with them. First explain the big picture.

If the business does not make an adequate return on the capital employed business owners will look at it as profitless and are better off deploying their capital and time somewhere else.

And they will. So end of story: they have no job.

Next, explain to them the cost of “selling” the bibs and bobs. There is no use value adding to avoid discounting if it then costs the company to provide those extra services and products.

Then you might need to sit down and redo your strategy. Give them clear guidelines about what they can and can’t sell. Maybe the more expensive bibs can be replaced by less expensive bobs.

Finally adjust their sales commission. Tell them they only get commission on the sale revenue after the costs to produce the extra “value add” have been detracted from the deal.

So get talking.

Good luck!
Your Aunty B

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