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Beware of copouts that stifle profits

By / June 13, 2018

Avoid denial. Managers who expect to grow and prosper must look at their businesses as objectively as would an outside analyst, so beware of kidding yourselves. The following statements by business owners and managers can be the kiss of death to optimal profitability:

Statement 1

I’ve seen competition come and go for years. I’m the third generation and I’ll survive just like my dad and granddad did.
Nothing could be further from the truth. Graveyards are full of businesses whose owners were content with the status quo. Some change is essential. If you want different results, you must commit to doing some things differently than you have done them in the past.

Avoid breathing your own exhaust for too long; schedule visits to successful businesses outside your trade area. Borrow their best ideas and begin implementing them in your business. This is the best way I have found to stay ahead of the competition. No matter how successful you think you are, there are a significant number of owners and managers out there running their businesses more efficiently than you are, so take advantage of this opportunity for new and innovative ideas.

Statement 2

There are no more good people left for me to hire. We have to settle for what our community has to offer.
This is simply not true. There are quality people in every community, you just have to set high standards and look for good people until you find them. Make hiring a process, not an event; continually be on the lookout for good people. Don’t wait until you have an opening to begin. Good people are like good ideas, they’re rarely going to come looking for you. You have to spend enough time to find them.

Statement 3

We have the best service in town.
Says who? Service is in the eye of the beholder. I know one business owner who recites the results of his customer satisfaction survey each time he loses a customer. He refuses to admit that his service may not be so great in the eyes of those customers who have left him to do business with a competing lumberyard in his area.

Good service is relative. Until you begin measuring service and comparing how well your company performs in the current period versus previous periods and comparing each aspect of your service with that of the competition, this service claim will lack credibility with customers and prospects.

Try answering these questions: “What are the odds that an order we receive will be shipped complete with no backorders? What are the odds that your deliveries will be delivered to our jobsites by the time you promise they will be there?” Don’t like the answers to those questions? Then it’s time to revisit how you view your company’s service.

Statement 4

If it ain’t broke, don’t fix it.
This mentality allows businesses to overlook innovative marketing and operational techniques that may be superior to your current way of doing things. There was really nothing wrong with that old bookkeeping machine you replaced years ago with a new computer system. It wasn’t broken, but it sure was obsolete. The same could be applied to many areas of a company.

Statement 5

We don’t have time for training and we can’t afford it. As long as our people have good product knowledge, that’s 90% of the battle.
No one can deny the value of outstanding product knowledge, but there’s a lot more to selling than knowing a lot about the products you sell. Skills like overcoming objections, making the sale while holding your price, taking a loyal customer away from the competition without using price as a weapon, and being so knowledgable about our industry that customers and prospects alike don’t believe they can do without you.

High quality sales training will pay handsome dividends in both sales and gross margin. Make sure your salespeople have the tools to do the job you expect of them.

Bill Lee

Bill Lee works with owners and managers who are looking for ways to put more money on the bottom line. For more information, you can contact Bill at 864.303.8366 or email him at [email protected]