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.

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.