In Sales, Small Changes Can Equal
BIG PROFITS
By Kirk Heiner
market share, Apple has more than 20 times the
Imagine making a few minor changes in your
of about $5 million to Apple’s $97 million.
showroom and sales process and increasing
your profit by 50 percent. It’s possible. Small changes in the right areas can mean huge payoffs. There are some simple steps you
can take to go from mildly profitable to wildly profitable.
The Biggest Breakthroughs
profits. In one quarter alone Dell posted profits How do they do that? Apple knows its customers. It works to fill those customers’ unspoken, even unknown, needs. Apple addresses issues nobody else notices and delivers value in the process. Learn the lesson from Apple. Success is not about gaining greater market share; it’s about profitability.
Most people look to their trade for what to do
The Secret to Greater Profits
of what the most savvy business people do.
So how do you ask for and get more money
business — Richard Branson, Bill Gates, Guy
make their buying decisions. People make their
in every industry, the biggest breakthroughs
compare products and companies, looking at
your business and your industry to see what’s
a purchase. Think about the last time you
and how to do it, which is exactly the opposite If you listen to the most successful people in
for what you do? By knowing how customers
Kawasaki — they’ll tell you that in business,
purchasing decisions based on emotions. They
and successes don’t come from looking at
value vs. cost. You do it every time you make
working, or what’s fine, but in discovering
shopped for anything.
what’s missing.
Starbucks wasn’t successful because people
needed more coffee. In fact, the company will tell you it doesn’t even sell coffee; Starbucks
sells an experience. What was missing in the industry wasn't coffee, but a feeling.
Winning doesn’t come from making massive
changes, but rather simple, small changes that tap into deeply felt customer desires that are going unmet in an industry. This is where the best and brightest focus to find solutions to
problems their competitors don’t even realize exist.
Think about intermittent windshield wipers, air conditioning in automobiles or even the iPad.
Nobody knew these things were missing. These
So how do shoppers determine value? They do so through perception and information. They look to compare the quality of products, trustworthiness of the company, safety of their purchase, social proofs, Internet reviews on both companies and products, warranty and more. They’re looking to answer two questions: 1) “What product is right for me?” and 2) “Which company should I choose?” Frequently, they need to determine the product first. Once they feel safe in their product selection and color choice, then they look to compare which company is best to go with. Believe it or not, most of the time after meeting
The Big “If” Studies have shown that the average American is willing to pay up to 50 percent more for an item “if” they see a value difference. That’s
your challenge. You must give them a clear,
perceivable difference in the value you bring to the project. It’s called your value proposition. What are you promising that others aren’t?
Find the right value proposition and you can easily double the profit of every sale.
Most companies do not lose the sale over a 5 or 10 percent price difference. Let’s say three companies quote the job. Company A’s price is $2,300, Company B’s price $2,530, and Company C’s price $2,760.
What is the perception of a product or service when there is a $460 spread between prices? Which one do you think they will perceive is
the quality company? What might they assume about the lowest priced company?
The average company doing granite
countertops nets about a 10 percent profit. The difference in the previous example between company A and company B is exactly 10
percent. That means if you raised your price
from $2,300 to $2,530 you would be doubling your profit. I know, you’re probably asking,
“Won’t I sell fewer jobs if I do that?” Maybe not. I used to work in sales and installation for a hardscape and masonry company in
California. The company’s main salesperson
had been with them for years. He was always complaining to the owner that their prices
were too high. He wanted to be able to lower the prices so he could sell more. He would
were small additions to existing industries that
with several companies there is very little clarity
consistently close about 20 percent of his bids.
made global impact and massive profits. In the
in the mind of the customer as to the distinct
same way, small changes in how you do what
differences between them.
Finally, the owner allowed him to drop the
you do every day can make a massive change
If you wish to charge more for what you do,
to your bottom line.
your first mission is to help them determine the
Take Dell vs. Apple for example. Dell computers
right product and color. Your second step is to
has only about 6 percent. A recent news article
should be done from the moment they drive up
have about a 30 percent market share. Apple
make clear why you are a better choice. This
stated that while Dell has five times more
through the signing of a contract with you.
26 • Vol. 6 / Issue 3 • International Surface Fabricators Association
price by 10 percent. After the price drop, he continued to close about 20 percent.
In response, the owner decided not just to
return to the old pricing, but raised his prices an additional 10 percent. Guess what? The salesman still closed 20 percent.
The moral? Dropping price doesn’t always