There is a drive in all salespeople to “get the deal”! I’m no different, there is a “high” about winning, a “feel good” to beating out the competition and of course for most salespeople there is a financial reward too by way of commissions.
When you move from a pure sales role into a management role you are expected to look at the business a little differently. Its not all about the revenues generated, there are many other factors to consider … can you deliver? Can you deliver and make a profit? Does this client have the means to pay? Is this client going to take up more time (and therefore increase your costs) than the business is worth?
When you own your own business or have responsibility for a line of business, the emphasis really shifts from the pure revenue generation to the business aspects of a deal. That is where you learn to recognise the signs that not ALL clients are good clients, not ALL business is good business and sometimes it is OK to walk from the deal!
At the end of the day it is about ensuring that your costs do not exceed your revenues, and that the return you get is worth the effort. Some deals will be marginal, and there is a call to be made about whether to proceed or not … but even if you do proceed it is prudent to keep reviewing that decision on an ongoing basis.
If Client X is a marginally profitable account at the start and grows significantly then just maybe the increased scale might make it an account worth keeping.
IF Client X, along with its growth, suddenly starts costing a lot more to service then maybe Client L needs to go? They take up excess amount of time from your staff and management team? They don’t pay their bills on time, costing you both financing charges and increased back office costs? Their low margin resources turn over frequently, causing more cost in handling issues and replacing staff? Sometimes your staff get poorly treated by them, causing you staff turnover!
Not every client is a good client … the effort to service a poor client is much better spent finding clients that you want to work with! Some clients just need to be fired!
Kevin Dee is CEO of Eagle (a Professional Staffing Company)
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