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Why is it that many managers seem not to worry about profit? "Sell, sell, sell" we keep getting told. Pressure to sell simply encourages salespeople to offer discounts. Surely it's better to concentrate on margin performance and 'bottom-line' profit and train your sales people to sell well.

Why are so many sales incentive schemes based on sales revenue? It seems ridiculous to think that, in many organisations, by making the company less money (discounting), the salesperson can earn higher commissions! 

Well-trained salespeople can sell real 'value' at higher margins … and often find it easier than their previous methods of selling. Remember, there are a lot more salespeople that 'pretend' out there, than those that very successfully, sell very well. Train your salespeople above their competition.

This might be a little surprising: (Assume an initial net profit margin of 10%)

• Raise your average gross margin from 25% to 30% (takes a sales attitude change)
• Increase sales revenue by 10%
• Decrease your overheads by 10%

These little improvements don't sound too difficult, they aren't big changes … your bottom-line net profit will increase by …

95% !!

Play with the figures; it isn't hard to improve your net profit by 50%.