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Do You Walk Away from New Business and Sales Revenue ? May 27, 2011

Posted by dennissommer in Sales, Strategic Planning.
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Should you walk away from new business and sales revenue in this economy? Absolutely! If you have not walked away from new business a handful of times over the last 12 months, you may have internal issues limiting your sales revenue growth and profitability.

When times are tough, it’s very easy to say yes to all new business so you can achieve sales revenue numbers. However, not all business is good business.

We have found in our research that many sales teams (including the sales VP) will knowingly close sales at all costs to meet their sales quota, even when there is a known negative financial impact to the company.

Even when sales quotas were met, the negative financial impact to the organization ranged from lower margins and profits, higher cost of sales and operations, and uncontrollable staffing issues.

The most common reasons why they take on bad business (at a loss) were:

1.  To reach their individual or team sales goal.

2.  To sign up a new client or customer.

3.  To get in the door, with a promise of future sales.

In reality, when you monitor these situations over the long term relationship, the only winner is the customer.  They receive a high value product or service at a very low price.

These deals have a negative financial impact on your business, a negative impact on your reputation and makes it very difficult for you to get the same customer to pay top dollar for your product or service in the future.

Walking away from business is a simple and proven tactic used by top performers to improve sales revenue growth and profitability.

You should walk away from new business when:

* The sale does not meet your documented minimum profit and margin expectations.

* The customer demands concessions that are not reasonable.

* You need to discount your product or service more than 10%.

* You are required to complete an RFP from a new prospect you have not met before.

* The staff hourly costs required to complete the sale exceed your maximum expectations.

* You are asked to provide free services or products before the sale is done.

The above list contains a few reason to think about when deciding to walk away from business.  As the CEO or executive team member, you need to make sure you have policies in place for your sales team to help them be successful, while at the same time help you grow your sales revenue and profitability.

Remember, not all business is good business.

Until next time  . . .

Think Big and Take Action !

Dennis Sommer

Dennis Sommer is the CEO of Executive Business Advisers . Dennis is a highly sought after business growth expert with over 25 years experience.  His specialty is helping companies quickly improve business performance and sales revenue growth.

If improving business performance and sales revenue growth is a priority of yours this year, contact us today to see how Executive Business Advisers can help.  Call 330-676-1876 or email us at sales@ebaac.com

Copyright © 2012 Dennis Sommer All rights reserved.

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