Nothing in life is free

[lnsr, A BELATED Hnppv New Ysen. I hope that you had time to enjoy the holidays .a' with your families and are ready for the challenges of a new year. In my native England we have a custom of opening the front and back door to let the old air out and the new air in. As of midnight December 31 , that door should be open for a long, long time!

There doesn't seem to be any industry that has not had challenging business results in 2009, but I have been encouraged in the last few weeks at the small signs of optimism in our industry. The truth is, without optimism and belief, what are we left with? A negative environment only breeds further negativity. The challenge this country faces is that the negative barometer is set too high! We must find a way to turn the switch that will start us all getting back to how it was-or at least somewhere in the middle of then and now.

We often debate in our office what we can do better or more of to help our readers and advertisers. I am sure that is a debate held in every company at some time or another. One of the comments that invariably comes up-mostly from the sales force-is let's offer free this and free that. Now, nothing gets me more excited than trying to benefit our customers, but I have learned over many years that giving something for nothing is just not a good idea. In fact, it's the worst business decision you can make. It is tempting when times are tough, but once you start down that road, you can never get anyone to pay for today's freebies in the future. Yes, we all see our competitors do stupid things (I hear from you on desperate pricing all the time), but I have yet to see a company succeed with such a strategy in the long term.

I remember being trained that you can always go up, but you can't come down. When you offer something today, it wil/ be remembered and you will negotiate it every time. The salespeople who suggest giving something away don't get hit in the pocket, so for them it's an easy suggestion to make. What does gets hit are your margins. And they never recover!

To me, there are three issues that you need to deal with. First, teach your sales team to sell.There are too many people in this industry out there selling who have not been adequately trained to sell. The goal of sales is to get the order-not at all costs, but to make sure both parties are happy signing on the dotted line and will be happy to do business together in the future. Nothing comes or should come easy. So buyers need to be sold, objections overcome. You can talk all you want about your last golf game or vacation, but unless you walk out with an order or have moved the potential sale further up the funnel, you have failed. I just sense that the current economic mess gives power to negativity. to accept that it's okay not to have the order. Following every customer contact, salespeople must be self-critical, strategically analyzing what they did or did not do and holding themselves accountable. Don't be content with a no! We can blame our troubles on the economy or our stupid competitors or..., but how about we blame ourselves?

Second, years ago I heard the saying that when you offer something for nothing you entice cheap customers. And we all know what they are like, right? They are the ones that nitpick on everything, negotiate every cent, and are never happy. A free lunch isn't free; it just cuts your profits and makes you negotiate every order.

Third, think through your unique selling advantages. And if you don't have any, you have a much bigger problem than this column can solve. Differentiate, differentiate, differentiatel If you already possess distinct advantages, let your customers know what they are-or do you assume they know already? Don't take anything for granted. Value-add your products. Offer services that no one else offers. But don't give them away. Just remember: charging more requires a higher level of sales and marketing skills, and, frankly, you might not have the right people in place today to do this.

I have spent my time in every business I have run breaking down numbers and understanding how every line on my P & L has been derived. But at the end of the day, the top line, the gross profit line, and the bottom line will tell you all you want to know. When the comparative percentages change for the worse, you know you have issues.

This year will again be challenging, but I think we are at the start of the long road up. Make sure your company is prepared for the turnaround and get back to doing business the right way !

Alan 0akes Publisher

www.building-products.com

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