So here we are mid-year 2023. How do you like your year so far? Are sales where you want them? Are your profits where you need them? Are you enjoying your business? Yes, no, maybe so?
Let’s work on these questions and understand the value of your answers.
If sales are good but profits are not, what’s causing this? If sales are not where you want them then let’s figure out what’s going on. With a small investment of your time, about one hour or so, we can figure out what’s happening this year so far.
Understanding why
Starting with the good news first. You’re having a good or great year and your sales revenue is rocking and rolling. Good news, but why? Is it the economy? Have you had a new major dealership open or expand in your territory? Did a competitor go out of business? Is it your good looks? (Probably not...) Is it your sales skills? Are you more organized this year? Do you enter each shop with a plan and a sales goal? Are you giving better presentations? Feature, advantage, benefit, trial close followed by a good professional final close?
No one wants to kick a gift horse in the mouth, and I’m happy your revenue is good, but figuring out why is really important. If you know, to the best of your ability, why your revenues are where they are, you stand a much better chance of continuing this run of success instead of just letting the winds of good sales blow as they may. What happens when one of your major dealers closes? What happens when that jobber who went out of business is replaced? Will you still be riding the wave of success?
If you honestly answer the hard question, why are my sales good, you can develop a plan to continue on this rewarding path.
Let’s say a major competitor got out of the business and their territory has not been refilled. If that’s the case, focus hard on getting as many of their customers on your credit books as you can. Do what it takes to welcome them as new customers because when brand X refills that territory, and they will, you don’t want those new customers running back to them.
Improving your net profit
If your top-line revenue is good but your net profit is not you need to really analyze this issue. A weak margin means you’re basically working for practically nothing. The old saying, “Good sales revenue covers a lot of ills but when the top line hiccups the bottom-line crashes.”
As an old-time sales manager, my first thought and real net margin killer is discounting. This is a slippery slope and once you get into the habit of cutting your prices to get the sale it becomes easier and easier. Sure, as a mobile jobber, your prices may be high compared to Amazon, eBay, or even some of the big box stores but there always was and always will be someplace where your customers can get many of their tools for less. However, none of the brick-and-mortar competitors offer the personalized service that you do — free delivery, specialty tools, professional quality tools, great credit terms, and an excellent no-hassle warranty. So be sure to continuously remind your customers how valuable your services are, how much you appreciate their business, and when a customer says your prices are high just say, “Sure they are, and here’s why…” Then fill in the gap with all the great personal services and great products you provide.
Another way to look at your margin problem is to look at what you are promoting during your sales presentations. Yes, promoting the inexpensive or heavily discounted product your brand has on special this month may be an easy sale. However, using your valuable selling time on promoting low-margin products may not be the best for your take-home pay. Of course, you may want to mention the latest product promotion but invest your major selling time in more profitable items such as tool storage, EV battery and powertrain lift tables, exhaust analyzers, or other high-margin items.
Plan your sales presentations around profit instead of ease and your net will improve nicely.
Other profit killers to review are poor truck maintenance which causes down days for repairs, not taking advantage of supplier/wholesaler buying promotions, and overpaying for insurance and incidentals. By the way, just because you buy a product from your brand or a WD on special does not mean you must sell it at a discount.
It's all in the numbers
As I’ve mentioned many times before, sales are a matter of numbers. The more prospective customer interactions you have the better your results will be. Even if your sales skills leave a lot to be desired, if you ask enough people to buy something your sales will be there. As you get better at asking for the order your sales will grow even more.
So, look back over the first half of the year. How many selling opportunities have you given yourself? Are your interactions going up, staying flat, or going down? Sometimes there is a tendency to slack off a bit when sales are going well. The problem with this is that when your sales do slow down it’s twice as hard to get back on the ball.
What about your closing ratio? What percentage of your major presentations do you close successfully? If you’re getting a shot at a good number of major presentations but not closing the deal, it’s not the product’s fault; it’s not your company’s fault. Close harder and close better. The old saying, “Don’t press your luck” is totally counterintuitive to sales. When your luck is running on high PUSH HARDER. It won’t last forever. Make your calls and ask for the order.
A great way to analyze your results is to take a moment after each stop or at least at the end of the day and ask yourself three questions — what went well, what didn’t go so well, and what will I do tomorrow to improve? Remember to answer these honestly. These questions are the ones a good field sales manager would ask their salesperson on a training visit. You can be your own sales manager when you ask and answer those hard questions every day.
Now go sell something.
