There are better ways to grow sales than to merely throw money at the problem, whether that means more money spent on advertising, a bigger sales force or beefed-up expenditures in other business areas. A close look at your pricing policies, your customer relationships and your sales team’s needs and capabilities can reveal ways to grow revenues even when times are tough.
Look at pricing first
Start with pricing and get over the belief that you can’t raise prices without dampening sales. By keeping prices flat or using price discounts to try to keep demand or close sales, you create two problems. First, you destroy the value of your brand and the integrity of your pricing. Second, you train customers to negotiate harder to get every last penny, which ultimately destroys your customer relationships by undermining customers’ trust in your company.
Instead, look at pricing as a strategic tool that must be managed and based on value, market demand, product lifecycle and cost structure. An important first step is to review your pricing policies with a sharp eye, including looking at any flexibility the sales force has to set price. If your sales team has authority over pricing decisions, put an end to that authority quickly.
After this review, you’ll hopefully feel better prepared to bite the bullet and raise prices — especially if it’s been more than a year since you last took a price increase. After all, your customers are seeing increases at the gas tank and the grocery store almost on a weekly basis. They won’t be overly surprised that you’re raising your prices as well. And customers usually aren’t as price-sensitive as a pure economic analysis would suggest. At the end of the day, your customers expect you to take increases from time to time to cover your own cost increases.
And while you’re focusing on price, review the pricing discounts you offer and evaluate their effect on revenue; modifications may add to your bottom line without driving away customers.
Boost customer focus and service
By letting your customers know about your plans to enhance customer focus at the same time you implement a pricing increase, you’ll dampen any complaints about the price hike. As you consider ways to boost customer focus and service, consider all customer touch points. By scheduling a tour of customers’ facilities, for example, you’ll communicate that you care about your customer’s business as much as your own.
Other ways to enhance customer service include the following:
- Improve product and service delivery processes so it’s easy to do business with you.
- Provide value-added services that are hard for competitors to duplicate.
- Review order fulfillment and delivery statistics and improve the metrics. Even if you’re at 97 percent on time and complete, you’re leaving 3 percent on the table.
- Evaluate customer complaints and identify ways to eliminate concerns and problem areas.
Enhanced customer service will earn your company not just more loyal customers but also a larger customer base as these highly satisfied customers refer contacts to your company.
Challenge your sales team
There’s a lot you can do to strengthen your sales force and increase the business it generates. Start by setting stretch goals. For example, if you normally set 2 to 3 percent as the target for increased sales, up the target to 4 to 5 percent — or whatever figure you have at least a 50 percent chance of meeting. Your people will rise to the occasion.
And don’t underestimate the impact of training on qualifying and closing, time management and sales management. Your sales team will not just appreciate their new skills. The team will become a loyal, well-tuned engine driving your company’s growth.
Tony Arnold is founder and principal of Upfront Management, a St. Louis-based management and executive consulting firm. Utilizing C-suite experience as a CEO and executive experience in early-stage start-up and Fortune 100 companies, he brings unique skills, insights and perspective to enable clients to improve business performance. Arnold can be reached at (314) 825-9525 or [email protected]