Why Go Broke Tired?
Here's a handy tool that could change the way you think about prices, margin and volume. It's a margin calculator - use it to illustrate how changes in price can cut into your margins and to see the relationship between prices, margin and volume.
Here's an excerpt from "How to Sell at Margins Higher than Your Competitors" By Bill Brooks and Larry Steinmetz that illustrates why understanding these concepts is vital for your survival as a salesperson, sales manager or business owner:
Two things salespeople who sell at premium prices learn early is that (A) if you continue to sell at a low price, your employer is eventually going to have to cut your commission rate (they have to when they start losing money) and (B) if you sell at a low price, you are going to inflict an incredible amount of work on yourself to try to maintain those (paltry) commissions.
Here's why: Let's say you are selling 10 units of a product at $100 per unit. The cost of goods per unit is $65 which means your margin is $35. If you raise price 10%, you have to sell only 7.8 units of this product to produce the same amount of profit. Cost of goods sold is a way of putting a dollar value on how much work you (and your employer) must do - how many orders the employer has to get, produce, fill, ship and deliver on time.
But the salesperson who cuts price by 10% has to sell 14 units to maintain the same profit margin. That means that the salesperson who cuts price has to sell 80% more in order to enable their employer to make the same amount of money it would make if the salesperson were selling at the higher price. If you're going to go broke, why go broke tired? If you are going to have to find another job because your employer went broke, why do so much work to end up there?
Any idiot can cut price, get volume, go broke and grow tired. If you're going to make a mistake in pricing, you always want to make that mistake on the high side. It doesn't take nearly the work to go broke overpricing that it does to go broke underpricing.
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Tuesday’s Sales Truth {10.9.07}
The Tuesday's Sales Truths are taken from Bill Brooks' Book Entitled: Universal Sales Truths
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Tuesday’s Sales Truth {10.2.07}
The Tuesday's Sales Truths are taken from Bill Brooks' Book Entitled: Universal Sales Truths
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Pre-Call Planning: Not Just for Sales Calls
Great salespeople wouldn't even think about going on a sales appointment without taking the time to do some pre-calling planning. Gathering information on the people you're going to meet and the company they represent is standard practice if you want to be positioned as a professional and get the meeting off to a great start.
The same procedures should apply when it comes to a job interview. Whether you're the interviewer or the interviewee, good pre-calling planning can make a big difference is who gets hired and who doesn't.
Here's a real-world example of some good and bad pre-call planning for a job interview. By chance, I recently tuned into a cable TV program focusing on how the Dallas Cowboys (National Football League) audition young women to become members of their famous cheerleading squad.
I was intrigued by the job application process. Instead of one candidate at a time, a team of representatives from the Cowboys brought three women into the same room simultaneously. The panel of interviewers then posed a series of questions to the candidates, some related to football, others on issues totally unrelated to the sport. For example, the interviewees were asked to identify the winning team of last year's Super Bowl (Indianapolis Colts) and the current head coach of the Cowboys (Wade Phillips). While not everyone in America should be expected to know the answers to these two questions, one might think that a person applying for a job with the Dallas Cowboys would find these questions rather easy.
However, one young candidate said, "I don't really follow pro football," in response to the question about the reigning Super Bowl champions. Another candidate thought Bill Parcells was the current coach of the Cowboys. Apparently she didn't know Parcells retired and was replaced by Wade Phillips.
One candidate was asked if she thought Condollezza Rice would be a good choice for President of the United States. With a bright smile on her face she said, "I think he would make a great President." Later she even referred to the Secretary of State as Condolleezza Jones.
In a side interview, the leader of the interview team said the Cowboys ask these questions because they want women who will represent the Cowboys organization well.
Back in 2003, while serving as a colonel in the U.S. Air Force, I had the privilege of leading a troop entertainment tour to Europe and Asia. Among our entertainment group were several members of the New England Patriots cheerleading squad. Every one of these young women was bright, polite, articulate, talented and an outstanding representative of their team, the NFL and their country. Like the Dallas Cowboys, the New England Patriots leadership are also very careful about who they select to represent their club. Maybe that's also why these two teams tend to remain among the league's elite franchises.
If you're in the process of candidates for jobs at your company, what kinds of questions are you asking that will help you select the best people and eliminate the ones you don't want or need? Are they only questions about the candidate's specific job knowledge and experience, or are there some general information questions that could tell a lot about the "whole person?"
For example, one of my favorite questions is "Can you name the last book you read and what you learned from it?" You'd be amazed at how many people don't have an answer. Instead, they try to tap dance their way around the issue by offering all kinds of excuses of why they haven't read anything, either for pleasure or personal development. Do you really want that person on your team, especially if the job will require the employee to learn new skills?
And for those who might be seeking a new job with a different company, do your homework on the company and the industry. Search the internet, talk to other people familiar with the organization and dig up as much information as you can. If you do, you will come across as a more serious candidate when you can talk intelligently about the place you wish to work.
What do you think about this issue? I'd love to hear about some of the more interesting interview questions you've either asked or been asked to answer.










