Remember it’s profit, not sales, that determines whether a business will survive or not and this is truer than ever in the current challenging times.

The easiest and fastest way to increase profits is to raise your prices.  As there are no extra costs involved, every dollar you increase your price goes straight on to your bottom line.

It may result in a decrease in sales turnover, but remember it’s increased profit you’re looking for.  Study the following example:

To achieve a gross profit of $6000 at the normal price you will need to sell 1,000 products. To achieve the same profit after raising your prices by 10%, you will only need to sell 750 products, that’s a 25% reduction in sales turnover for the same profit.

Of course, a uniform price increase across your entire product line won’t necessarily produce a uniform increase in profit.  Some products have a greater “profit elasticity” than others, and it is a matter of trial and error in order to maximise the profit for each line.

To lessen the impact on your customers while maximising your bottom line, try lifting the price on a few lines in your range by a few per cent.  If demand for those products drops off dramatically, you’ll know you’ve gone past their “price threshold”.

It’s then a matter of adjusting the price on that product to a level that produces maximum returns.

Another way to increase profit is to add value to what you sell. What you offer will need to have a high perceived value for the customer while costing you very little.

NOTE: The best price is not necessarily what the customer is after; they are usually after the best value. Train your staff to sell the value of your products/services in terms of customer benefits and outcomes.

Two questions to ask yourself:

1. Does your staff sell the true value of your products/services?  Yes or No.

2. Do they know the net profit from the sale of each product or service?  Yes or No.

 If the answer is no to either of these two questions, what are you going to do about it?

I can almost here some of you saying, “Paul, what, are you mad! I can’t increase my prices now.”

Well you can’t continue to absorb cost increases from your suppliers without passing them on to your customers either – otherwise your margin will continue getting squeezed and the result will be very unsatisfactory. So it’s your choice – compete on value or price. I hope you choose value and really dig to be able to properly articulate to your customers where the real value is. You must be able to demonstrate this through more than just lip service and general platitudes, otherwise it means little or nothing.

“I Want to Think it Over”

Almost every business has to endure the “I want to think it over”
prospect, most probably multitudes of them. Do understand that “I want to think it over” is code for something else and until you decipher the “something else” you won’t get the sale.

Here’s the lesson:

Fifty per cent of the time when prospects say “I want to think it over” it really means they:

→ Don’t have the money (and don’t want to tell you so)
→ Can’t decide on their own (but don’t want to appear weak in your eyes)
→ Want to shop around (but naturally, they don’t want to tell you this)
→ Know that they can get it cheaper elsewhere (and why would they tell you?)
→ Have a friend in the business in whom they trust (and they’ll use your information to cross-check the friend later)
→ Don’t fully comprehend or appreciate the benefits your product or service  offers
→ Don’t need your product or service right at the moment
→ Don’t have confidence in you
→ Don’t trust you
→ Don’t have confidence in your company
→ Don’t trust your company
→ Don’t like your product or service
→ Don’t like you.

The other 50% of the time they will buy, and prospects can be
persuaded to buy if you address the above issues.

Hmmm…how many dollars are you and your sales team leaving on the table each hour, day, week because they miss converting these sales?

In these challenging economic times it is paramount that you and your sales force ensure they are as productive and efficient as they can be.  Are you sure that your teams are.

Do you and your team need help?  Then perhaps you may like to consider our online interactive sales coaching program.  Check out the details here or call me for a confidential conversation for possibility about how we may be able to assist you.