Monthly Archives: May 2015

Good primer on the topic. While raising the issue and educating those around you is good. How far off are intelligent machines? Watch…

I love technology but what you wrote is scary stuff when you think about it.

Good article, and I agree completely.

A discount is an incredibly expensive give away as it comes straight out of your bottom line. Every penny is additional profit you could be making, and to give away anything you don’t need simply amounts to charity. This is even more damaging when it is what I call a Post-Sale Discount – one you voluntarily offer after the customer has already agreed to buy.

I saw this in all its destructive glory with a client of mine who owned an upscale optical store. He was always complaining about the pressure on his margins and never made the kind of profits he should. We analyzed his problem up and down, but it wasn’t until I bought a pair of glasses from him that I saw the root cause of the problem.

I picked out what I wanted from his inventory and knew the price for both the frames and the lenses before I was measured up. I was happy with the price, but when the time came to pay, he suddenly took 10% off . This took place without any prompting on my part, and I probed into his sales process in a way that I hadn’t thought about before.

It wasn’t just because of our relationship, and it turned out that he did this on virtually every sale. He couldn’t really explain why he did it and while he root causes might lie in a general lack of business confidence, it had simply become a habit that had been integrated into his sales process. His other salespeople followed his lead and the practice was costing him substantial lost profits.

In my case, the sale was $1,000. His gross margin of about 50%, which after overhead probably would have generated a net profit of about 10%. After the discount, his gross margin fell to 40% but his net profit on the transaction after fixed overhead actually disappears, making the transaction a break-even!

I agree and I am going to meet with my Mentor today to make some adjustments, I know I am giving discounts and for a small business , I cannot do that. Thanks, great reply.

I do not think that “effective” and “efficient” are mutually exclusive. Being efficient is largely a product of good processes, procedures and training. It is possible to develop those kind of procedures that also have a healthy dose of effective individuality baked in. Efficient processes should take care of most day-to-day requirements. When customer or company circumstances are outside the procedural box, employees can and should be encouraged to take initiative to be creative and effective.

For example, PEI is a software development company. Employees (including myself) are first expected to be creative. However, strict naming conventions, coding standards, long term maintainability and testing are enforced. While we are more on the “effective” side of the gradient with a healthy dose of “efficient”, there just needs to be some kind of balance.

David’s comment on not mutually exclusive is reality. An organization with a solid base of efficiency certainly relies less on effective individuality, but I believe both are essential.
But this thought provoking discussion also leads me to want to get on a plane and head for Europe to continue my education. Thanks.

There may be merit to what you claim as to earning trust by doing what everyone else does. But I believe you might also be passed over….similar to a billboard that is there everyday but becomes so much a part of the landscape it isn’t noticed. Being different can at least get you noticed…then it is up to you and your message to earn trust.

The goal of marketing is to establishing top of mind awareness- the kind of awareness where the target audience thinks of your brand before they open their browser. So if the target audience cannot tell the chaff from the wheat because everything looks and feels the same, the marketer is placing the fate of his/her marketing budget on search engine results. Or playing a huge timing game.

The real reason automotive dealerships (as only one of many examples) fall into the same tired marketing rut is because it’s human nature to stick with what you’ve always done. They continually rely on marketing agencies with a specialty in their space, instead of seeking out an agency with a fresh point of view; it’s comfortable, and seemingly low risk because, well, they are rich and it’s gotten them to this point, hasn’t it?

Besides pioneering something new is risky… and change is scary. (Insert Einstein’s most famous quite here).

John

“On the mark”- being considerate of others –

Frank

Are you in control of your business, or is your business in control of you? Recognizing that “stuff” happens that can wreck your schedule, we should strive to make those times the exception. That is where a good team and a sound process-based approach makes all the difference, Great post.