In our latest Industry Voices digital article, we feature an excerpt from our recent special report on margin behaviours, originally published in our February issue

CREDIT: This is an edited version of an article that originally appeared in Dealer Support

To gain an industry perspective on the topic, we asked Andrew Tsierkezou to share his thoughts on the factors that influence margins, how sales behaviour affects profitability and the habits that can damage margins even when pricing and products are competitive.

Margin pressure is often blamed on market forces. From your perspective, how much of margin performance is determined by sales behaviour versus external factors?

“I hear a lot about margins being under pressure from resellers and brands alike. The right sell price for any service or product is always for me the only way to determine a suitable margin.  Outside influence from online brands that seem to be in an eternal price war can negatively impact visible services or product prices. Reacting to this kind of market pressure feels essential but will inevitably drive your visible margins down.

Resellers and brands add value in some many ways; product margins need to reflect the “extra” added value proposition they offer. Don’t aim to be the lowest priced, aim to be the best value cost for the service you deliver.”

How do fear of losing a deal or fear of conflict influence margin outcomes, and what strategies can help sales teams overcome these fears?

“I love to win a sale, but not all business won is good business. Being more philosophical about the need to win a deal is essential. What I mean by this is – does winning the deal have a clear advantage or benefit to your business right now or in the short term? Vanity and sanity get mentioned a lot still and for good reason. Don’t fear losing a deal if it is just not commercially viable as a whole, but don’t lose a deal at a micro level if by bending yourself a little out of shape you still benefit on a more macro wider level.  Make the right choice by being informed and aware of the net outcome.”

What are the most common sales habits you see that quietly erode margin, even when prices and product offerings are competitive?

“Not selling more to the audience you have now. Don’t always chase the new deal. Maximise an existing customers spend, really get everything you can from them. Better to grow an existing trusted customer by another 25+% year on year than spend excessive time and money chasing a new deal that might never actually come to fruition. Farmers or hunters. Farming is essential, so is hunting, but the best farmers in my experience deliver more consistent sales growth.”