From the 1990’s
Michael Marshall
‘The Business Doctor’


Number 9


A big cause of pricing problems and issues often is sales commissions and bonuses based on sales volume instead of margins and profits.

A sliding scale of sales commissions/bonuses to actual sales dollars based on margins and profits tend to influence positively a better job selling at higher margins.

The challenge is to get the selling behavior aligned with marketing and the corporate marketing strategy.

All sales support should align with the marketing strategy.

Studies indicate:

– Only 25% of sales people are effective

– 55% of sales people are not capable in sales

The cost of sales lost by ineffective sales staff often exceeds sales staff turnover costs.

The cost of getting new accounts is higher than the cost of retaining accounts

Sales awards, sales incentives and recognitions are very important and needs to formal and public.

Recognition is a strong motivator.

Leading edge technology sales support tools are beneficial to increasing sales plus attracting and keeping the better sales staff.

An on-going training program is important for increasing sales and retaining top sales staff.

Refresher courses every 6 months is advised.

When evaluating price cuts to current accounts, keep in mind the additional sales revenue needed to replace the profits.

But you may not have an option to this if your pricing is out of line with current competition with equal or better products and services.

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