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Money in the bank

“I am way behind my target.” This young sales guy sitting across the table would tell me and I pointedly ask – “By how much are you short?”

There would be an immediate response for this one – because they are being drilled day-in and day-out by the Supervisors on this parameter and its hard-wired into their head.  The answer would be –

“I have to do 5 more policies in the next 2 days.” Or

“I am short by 20 numbers to reach my target for this quarter.”

You notice it’s a number, it’s measurable, but still a low impact one – is business being run on number of customers or Rupees and Paises?

In the article titled Bring Home the Bacon we discussed why value has to be maximized in each sale. That we must constantly look for opportunities to up-sell and fight hard to avoid giving away too many discounts. This is done by adding value to your product / service at every stage of the sale. Price should become a low priority item for the customer.

Is this on your radar all the time? What are you doing to increase focus on revenue generation?

When the focus of the Sales Team is on numbers of New Accounts acquired its easy to believe that everything is hunky dory once the number target is achieved – they close business without assessing the business generation potential of the account. Forms are filled up and submitted and there is a big cheer at the end of the review period when they find that the “numbers have been achieved”.

As Business Managers shouldn’t the focus be on  income generation and profit – shouldn’t the following be the parameters being chased:

–          In Insurance: Premium amount collected rather than number of forms submitted

–          In telecom: Revenue generated per account per month and not number of accounts

–          In Banking: Average Value of new business closed

If you are already tracking your business in this manner … Fantastic!

If not I think there is case in favour of following this methodology instead of just chasing Number of Accounts. It surely looks good on paper to say we have the highest number of accounts but it may not make business sense.

For example, Facebook can say “If we were a  country, we would be the 3rd largest in the world by population” and win some brownie points.  But their Ad revenue could be less than that of a competitor, say Google, who have fewer users but are popular among the high–networth customers and hence achieve high ad revenues. I have just given a hypothetical situation to illustrate a point – have not done the research to confirm the actual numbers – so please don’t quote me on this one!

The purpose of business is profit and value creation – as Managers when you drive business there is need to create visibility every day on how much money is being generated and how much closer each person is on achieving the annual revenue target.

Business growth will be robust when that’s done and you will be right on the money!

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