Contemporary entrepreneurs need to constantly refresh their knowldedge and competences to be successful in their businesses. Otherwise they limit their chances to grow. I write about topics which I consider to be crucial for contemporary business: about the tansformation of marketing, sales and the entire business models.
Sales channels are one of key building blocks in every company’s business model. They give access to company’s offer, they deliver value promised in the offer and they assist clients in their buying process. Mismatched channels can however generate excessive costs or even restrain our sales.
In my last article I was referring to a typical situation, when a sales representative comes to his boss asking for his permission to lower the price in the offer in order to overcome client’s barriers and thus to increase sales. I was emphasizing that the reasons for company’s sales deciline may lie outside the pricing area. The reason for sales decline may be the lack of proper value proposition – discussed in my previous article or lack of adequate segmentation – which I address in this post.
A sales representative comes to his boss and asks for his approval to lower the price in the offer, because sales slowed down and market is “demanding”. This situation is known to many CEOs in the SME sector, whether they are a production company, a service company or a distributor. However a slow down of our sales may happen for many different reasons and does not necessarily mean that our prices are too high.
If the company doesn’t verify the actual reasons for declining sales and immediately cuts its’ prices, it may unnecessarily lower the profits.
Polish SME companies often have good products and services, but they lack business models that would allow them to generate an adequate level of profit from products or services they provide. As a result, they may lose their opportunity to grow.