The Transformation Of Transparency

A frequent sore spot between sales staff and sales management is caused by management’s desire for higher gross profits, and the sales rep’s wish for the ability to reduce prices to meet the competition. Basically, many employees think that owners are making a fortune, and that they have many perks that others in the company do not enjoy.

You and I know that this is typically not the case. When collections lag, we are often the last to get paid. The past few years, this has been the case far too often for many in our industry.

Rather than just dismissing this attitude or worse yet, resenting it; ask yourself how much your staff really understands the need for sufficient profit. Have you ever taken the time to explain why the money is needed and for what it ultimately is used? Maybe it’s time to do so.

Explain that adequate profitability will enable the company to grow faster. It will allow for a greater promotional budget. It will allow for showroom improvements equipped with the latest in displays and technology. Isn’t that what a well-equipped sales team needs? Remind them that higher markups usually allow more generous commissions and benefits, as well.

Share with them that the real secret to staying competitive is to eliminate the non-productive expenses, and that you need their help in doing so.  Then ask them: is this the type of business that you would most like to work for?

Obviously, I am not suggesting that you share privileged information with all employees. It only makes sense, though, that we cannot support and embrace that which we don’t fully understand. My bet is that you will be amazed at the attitude transformation which will follow sharing some pertinent financial transparency.

Tom Jennings

Saturday, December 1, 2012