Have you ever set a goal year after year and not achieved it? Losing 10 pounds shows up for many people as sure as the sun comes up in the morning. Why is that? For most of us, we know what to do, we just don’t actually do it because it is really hard, it requires more thought and careful planning than we have allotted, or other habits trump this goal. >
Vistage Speaker Doug Butdorf from Boost Profits grabbed my groups’ total attention when he said “revenue is for vanity, profit is for sanity”. Then, he gave us strategy, and execution to be more profitable. Wow! How about this: do you have regularly scheduled meetings to discuss pricing? 2 hands went up. Do you have regular sales meetings? All hands went up. Regular operations meetings? All hands went up.
Let’s get serious here. Sales are starting to slow down for many producers especially for B2C products. (Business to consumer). We aren’t buying to decorate the home we are stuck in – we are going out to dinner or traveling. This may be your last opportunity to raise prices in this business cycle. Should you wait?
As tedious or difficult as it may seem if you have to do this manually, you should segment your customers. First sort could be gross margin versus volume. If you color code by sales person you might find that the low volume, low margin customers might all belong to one sales person.
And, what do you do with those low volume low margin customers? RAISE THEIR PRICES. They will either become profitable customers or fire themselves. Either way you win!!!
And, btw, are your sales people rewarded for increasing gross margin or are their commissions tied only to revenue? There is an old saying “you get what you measure.” It is important to align your incentives around your mission, values and goals. You may need to reassess your incentives as part of your quarterly pricing meetings.
When inflation was running along below 2% for more than a decade, many of us got lazy in our thinking about price. None of our competitors were raising theirs. That time is long gone.
This week get going. Review your pricing and make some profit decisions. You’ve got all the tools you need.
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Image courtesy of Doug Butdorf, Boost Profits, Inc.
In Vistage, we commonly use the start, stop, continue exercise for feedback – from our peers in the peer group meetings or with our teams as a way to gain awareness of behaviors that make us easier/harder to work with. >
At 5 am, the dog barks at the burros wandering down the street outside our hotel. Again, at 5:20, and every 20 minutes thereafter until we got up. Cindy, the owner of the Atomic Inn in Beatty, NV, (just outside Death Valley National Park) described the burros as a feral invasive species. I called them a very cute nuisance.
Reports a month ago that China was asking Russia not to invade Ukraine until after the Olympics seemed far fetched. And, the Ukrainians were telling us to stop making such a big deal out of Putin’s threats. Now, who knows how long and terrible this war will be? The loss of life and the destruction of Ukraine will undoubtedly continue as Putin seems to have no intention of backing down. Just as things were settling down from our long battle with COVID, the world is upside down again. >
Many CEO’s that I work with as a Vistage Chair have a different reality from the title they show on their business cards. I call it the CWO- Chief “Whack-a-Mole” Officer. >
When I think of 10 year old Nora with long stringy brown hair and glasses, I remember being bored, physically and mentally restless and often speaking up with ideas for how things could be more interesting or more fun. Was I a bossy girl or a natural leader? >
Every Vistage group is having the same discussion: how/ who/ when to go back to the office? Those who never stopped going in – the essential in-person company leaders roll – their eyes. They have been masked up and in the office/field the whole time, but what about the rest of us???? >
Has anyone studied the actual uses of the Payroll Protection Plan (PPP) loans/forgiveness?
Because the pandemic totally devastated approximately 20% of the economy in sectors like travel, events, hotels and dining, it is hard to imagine how these industries have survived, or how the PPP money could have helped them for long. If they are still surviving, they are maybe 1/3 the size they had been before the pandemic. For them it has been tragic. Hopefully, they will come back as the economy reopens. >
A new year, turn over a new leaf, leave the pandemic behind….as we began January, hope was in the air. I was feeling motivated, focused, grateful. >