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SAVVY
SELLING - AUGUST
5, 2005
The
Holy Grail of Sales
By Michelle Nichols
Do you want to move
more of your line and expand
profit margins? Read on to learn
about three roads to revenue
I met with the vice-president
of a major corporation recently
regarding my sales consulting
services. After discussing his
selling situation for almost
an hour, he looked me in the
eye and said, "Michelle,
we have a very unique
problem. Can you tell me how
to sell more -- preferably at
higher profit margins?"
I had to laugh. How could this
guy think his situation was
unique? Did he believe everyone
else lined up to ask me how
to sell less at lower margins?
What he wanted was the Sales
Holy Grail. And this guy thought
I could solve that riddle for
free -- and on the spot!
WINNING FORMULA.
Later, I realized there actually
is a basic formula to achieve
Sales Holy Grail, that universal
quest. Like most formulas, it
requires work and, not surprisingly,
the quality of the result reflects
the quality of the work. To
benefit, you will have to spend
some time thinking, questioning,
and researching. But the payoff
can be enormous.
Here's the magic
formula:
SHG = same/same + different/same
+ same/different.
Let me explain. Basically,
there are three paths to this
sales nirvana. No matter what
you sell, I encourage you to
seriously consider all three
paths. To keep it simple, let's
call your products or services
"widgets."
Path 1: Same/Same.
Sell more of the same widgets
to the same customers. This
is the easiest ramp to increased
revenue, because you already
know your customers and your
widgets. It's hard to increase
your margins, however. Established
customers will probably ask
you for quantity discounts instead,
so be prepared. This strategy
will deepen your relationship
with your customers.
To sell more using this path,
brainstorm about ways to make
clients need more of your products.
If you're a distributor, help
your customers increase sales
so they'll need to buy more
from you. This applies to products
like retail goods or automotive
parts.
REPEAT BUSINESS.
If you're selling to only part
of a company, perhaps your customers
can introduce you to other buyers
within the business. This offers
administrative savings to you:
They're already set up to buy
from you, and you have everything
in place to sell to them. You
might use this approach if,
for example, you're selling
cleaning services or office
supplies.
Another method is to get your
customers to order the same
amount, but more frequently.
This might work with catering
or professional services.
A fourth way to use this idea
is to up-sell. For instance,
if you sell life insurance,
at renewal time, ask your clients
to buy bigger policies.
And finally, you can try proposing
different terms to clients.
Offering lower initial quantities
or different shipping or payment
terms might ultimately compel
them to buy more from you.
Path 2: Different/Same.
Sell different widgets to the
same customers. This is a great
path because your customers
already trust you, you have
a relationship with the decision
makers, and you know how they
like to buy. This strategy widens
your relationship with customers.
It also provides an opportunity
for higher margins on the different
widgets, giving you overall
higher profitability.
To sell more along this path,
determine what else your clients,
or others in their company,
buy. Also, find out if there
are critical widgets they need
but are having trouble finding
or receiving. No matter what
the different widgets are, it's
best if they have some relation
to those you already offer.
Another way to accomplish this
is to ask your reliable vendors
what else they sell that your
customers might buy. Then inquire
if your customers would like
to buy them from you at profit
margins at least as high as
those of your current widgets.
Path 3: Same/Different.
Sell more of the same widgets
to different customers. This
is the world of new account
sales, the lifeblood of any
growing company. You need new
customers because some percentage
of your clients will stop buying
from you every year due to reasons
totally unrelated to your great
service and widgets -- bankruptcy,
mergers, relocations, and changes
in business focus.
This strategy builds new relationships
with your most-recent customers
and ultimately lowers your reliance
on any one client. Within the
constrictions of the fair-trade
laws, try to package your services
and products to produce higher
value for your new clients,
so you can earn corresponding
increased margins, too.
ONE MORE AVENUE. To
sell more along this path, ask
who else would benefit from
buying your widgets. It's worth
considering your customers'
competitors or associated vendors,
but be very careful. In Texas,
we always recommend, "Dance
with who brung you" --
that is, don't lose an old customer
to get a new one.
Get creative. For instance,
ATMs used to reside only in
banks, but now you can find
them in almost every store or
mall. In the fashion world,
look at all the young people
wearing ski caps in the summer.
Someone turned a cold-weather
item into a year-round accessory.
Notice that I didn't include
a Path 4 -- different/different.
That is, selling different widgets
to different customers, because
that equates with starting a
completely different business.
For instance, if you own a restaurant
and decide to start selling
cars, too.
TOWARD NIRVANA.
Different/different is a bad
strategy because you don't have
any trust to leverage either
with your customers or your
offerings. I only mention this
to help you stay focused. Unless
you want to run a conglomerate,
concentrate on the first three
paths.
To really benefit from this
formula, set aside some time,
work through all three paths,
and you'll probably discover
several powerful ideas to get
closer to the SHG for your sales
situation. Then go put your
ideas into action -- and sell
more at better margins. Happy
selling!
Michelle Nichols is a
professional sales speaker and
consultant based in Reno, NV. She welcomes your questions
and comments. You can visit
her web site at www.savvyselling.com
or contact her at michelle.nichols@savvyselling.com.
Her direct line is (281) 610-6307
and her
toll-free number is (877) 352-9684.
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