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Posts Tagged ‘margin’

Where does margin come from?

We all know how to calculate margin in the simplest form by subtracting the cost of goods from the price those goods were sold for, but do many sales people, experienced or not, understand how to sell margin to their clients, suspects or prospects? When people on the street are all hyped up by presenting features and benefits, margin seems to be the last thing on their minds. What is the first thing on the mind at the executive level of the companies those salespeople are pursuing? Well, at that level it is profit or the operating margin of the business.

Rise to the Head of the Class

Features and Benefits are old school issues today. I didn’t say they weren’t important, just old school. The business development people that will rise to the head of the class and become highly profitable for their employers, and highly valued by their customers, are the ones that can provide products and services that generate profit for those customers and clients. Features and Benefits are a surface level approach that can be challenged by a “me too” competitor that is willing to drop price or make unreliable commitments. Everyone knows the downside of those experiences.

What’s the big picture?

Business development teams that can understand the business issues of the people they interact with will provide more value for longer periods of time and at higher margins. Knowing why a feature or benefit is valuable from the prospect’s perspective will build more trust than simply knowing what those features and benefits are. Features and benefits are “seller-centric” in nature, and if not attached to the total financial picture of a prospect they can be too assumptive and quite easy to ignore. The challenge then becomes how to open a business / profit conversation that doesn’t begin with a feature / benefit or price cutting pitch.

You don’t have to hire all MBA’s, but what would happen if your team embraced a little bit more business sense out on the street?

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