Top Challenges and Fast Facts

A study by MarketBridge reveals that 62% of companies cited increasing sales productivity as their top challenge.

Separately, an Accenture survey of consumers stated that 61% of customers believe that technology has not improved customer service.

And finally, 47% of employees say that a lack of accountability is a frustrating part of working in teams.

Does a Silver Bullet Exist in Marketing?

We have observed a number of B2B companies trying to achieve sales growth using only one marketing tool. Think of the company who uses just direct mail to create new customers or the manufacturing firm that uses just manufacturer's reps to grow their business.

Most of the companies that restrict their marketing to only a limited number of tools seem to struggle. There is no silver bullet. Achieving significant growth requires the use of many tools in harmony in order to effectively reach a target market.

What is your experience? Do you know of any B2B businesses that rely upon only one tool and achieve real growth?

If so, we would like to hear from you. Drop us a line and share your story.

The Sales Learning Curve

I am approached nearly every week by young companies that want to accelerate revenue. Many lack a sales and marketing organization to drive growth and are searching for resources to help them reach their goals. For most of these firms they are in the early stages of a new business or about to launch a new product.

While these firms are anxious to realize "hockey stick" growth rates most are actually a long way from significant growth. The reason is due to the learning curve that rests before them. A number of potential issues that require interaction with customers must be addressed and resolved before growth can occur. These issues may include product fit within specific market segments, packaging and delivery issues, selling process steps and the like.

This learning has been dubbed the Sales Learning Curve by Mark Leslie, CEO of Veritas, the 5th largest software company. The SLC is an adaptation from the Manufacturing Learning Curve that says a number of units must be produced in order to gain manufacturing efficiency and reduce production costs.

The same principle applies to sales development in the form of learning about market and customer driven issues and how they impact sales acceleration.

Learn more about the SLC on another blog and see if it applies to your business.

Pricing Management Is BIG!

If you have not seen the front page Wall Street Journal article that was published March 27 on pricing management find a copy and read it. The article featured Cleveland based Parker-Hannifin Corporation and the huge improvement in financial performance that they realized as a result of better pricing management.

We are seeing more and more companies of all sizes embracing disciplined pricing strategies that drive margin lift. Parker Hannifen moved from a cost plus methodology of pricing its 800,000 parts to a value based approach that boosted operating income by $200 million since 2002.

There are several relatively simple and effective tools that can be employed to begin managing pricing better. The best place to start is to begin tracking the average prices on a regular and frequent basis. This will indicate whether prices are generally rising or falling. Until you can monitor prices effectively you are only guessing at the trends.

Tracking average prices casts a spotlight on pricing within the organization and will cause management to ask questions about price changes that will likely lead to better processes.

Sales Teams and Price Increase Initiatives

Our firm has expertise in strategic pricing management which puts us in the middle of working with sales organizations to implement price increases. I can tell you that it is easier to get customers to accept price increases than it is to get sales professionals to get higher prices.

But, it doesn’t have to be that way. We have worked with dozens of companies to implement price hikes. There are several techniques and tools that can make sales professionals become your strongest supporters of pricing initiatives. Here are just a few tools that can make the job a lot easier...

1. Most sales professionals are compensated based on revenue achievement. Consider adding a price level component to the incentive plan. Reward the rep when he sells a product or service at a higher price. There are several types of compensation plans that can be adopted here. Some are implemented on a temporary basis to reward the rep during the duration of the price increase period while others are permanent and reward on an on-going basis.


2. Set average price levels for products and services. Then, track the pricing of each sales rep against the average and post the results for other reps to review. Most sales professionals are competitive and will respond to these scores. No rep worth his weight will want to be below average.


3. Pilot test a price increase with a few of your best sales professionals. Select those reps that you know will embrace the initiative and make it successful. The others will see the success and follow accordingly.

These are just a few of the techniques that we use to implement price increases. There are many more tools that can be effectively executed to improve your return on investment.

Good luck!

Use Pricing to Drive Revenue and Margin

A change is taking place. In the last 3-4 years the interest in pricing management among industry leading firms has skyrocketed. Companies like Eaton Corporation, Parker Hannifan and Cardinal Health have each established new pricing management departments that focus exclusively on price. The Professional Pricing Society, a trade group for pricing experts, has seen its membership grow four-fold in the last few years. New books on pricing management are being published at an unprecedented rate.

Pricing management is a powerful driver for improving financial performance.

Even the smallest changes in price can have a dramatic effect on profit. Consider that the average S&P 1000 firm will realize a 12.5% jump in net profit with a simple 1% price increase. And, of course, the equation works in the opposite direction as well…a 1% price discount cuts profits by 12.5%. The smallest adjustments in price can transform the bottom line for many companies and in some cases mean the difference between profit and loss.

Realizing significant profit gains does not require huge improvements in price. In fact, no other profit driver has the leverage effect that pricing has on the bottom line. Selective, small improvements that may be barely detectible by the marketplace can make a noticeable improvement in financial performance.

Technololgy Sales Stat

Sales & Marketing Management magazine reports that 53% of business professionals check blogs before making technology purchases.

The data was created by Knowledgestorm and Universal McCann’s “Emerging Media Series: Blogs and Real Simple Syndication” survey of 4,500 business professionals.