"Do Not Worship A False Profit"

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Do Not Worship A False Profit
by Joe Bonura, CSP

 

The False Profit

In today's fickle economy, too many companies are worshipping a false profit when they worship the "bottom-line." I have owned and operated two successful companies in my lifetime, and I earnestly believe that I have learned that if you focus on the top-line (gross sales), the bottom-line will take care of itself.

Cut, Cut, Cut, Cut, Cut

In a slow economy, publicly-held companies cut budgets so that they can please their stockholders and show an immediate profit on the bottom-line. Most of the budget cutters look like heroes after the first few months of the change because initially they put a profit on the bottom-line. They do it by slashing people, training, and advertising (PTA), usually the first three casualties.

Looking Good Versus Doing Good

They look so good that other companies begin courting the "cost-cutters" to work for them. Leaving a temporary bottom-line profit, the "cost-cutter" departs to go with the new company. A few months after his departure, the former company experiences serious problems, and the blame is placed on having lost the "cost-cutter." In reality, the negative results are caused by the cuts he made that are just now coming home to roost, all this while he is making his new company look good, and the cycle continues.

Short Term Suicide

The problem is that cutting is a short-term fix to a long-term problem. I have never seen a company cut themselves into a successful marketing position. Sorry, but the real name of the game is the top-line that can only be made to grow with investments in people, training, and advertising (PTA). Lee Iacocca proved it many years ago when he led Chrysler out of bankruptcy. He did it by coming up with exciting new products and increasing sales by investing in people, training, and advertising.

Omelet, Anyone?

In 1978 my ad agency lost 70% of our business because of the loss of one major account. I put all my eggs in one basket and watched the basket turn over, making one ugly omelet. I was understandably devastated because I had not focused on growing my business. I had focused on growing one client's business. After this rude awakening, I developed a new philosophy: focus on growth and improving gross sales (the top-line) and everything else would take care of itself. The strategy proved successful; the bottom-line blossomed; and we became the second largest advertising agency in our area.

Make Your Own Recession

What makes anyone think that getting rid of people and cutting back on training and advertising will cause a company to come out of a recession? Does it seem logical to you? We can get out of any enterprise that which we put in, not what we take out. When a company cuts back on necessary resources, it begins a cycle of decline.

People, People, People

Let's talk about people first. In most businesses, it takes people to make the product, sell the product, deliver the product, and service the product. So, how can cutting key people help you better service your customers? If you cut back on staff, the customer would have to be on another planet not to see a difference in your level of service.

Targeted, Focused, Skillful

In tough times, if you decide to keep a full staff, maximize their potential. In good times or bad, it is important to constantly establish new and innovative ways to do things. Train employees in new skills that they can use to help your company grow. Sales people must make more targeted, focused and skillful calls, and always approach the market from a different perspective than the competition. This can only be accomplished by teaching them new skills, training them to perform effectively to fit the new marketing environment.

The Customer Is Waiting

I have consulted with companies that confided that sales were down, and there was nothing they could do about it. I would then go in the field with their sales people, and we closed on eight out of ten calls. My ultimate goal is to teach their sales people to get similar results. They immediately see a big difference in their top-line. Recently, I trained a media rep, and he sold a $250,000 contract with an advertiser. In that one sale, the training paid for itself many times over.

Out On A Limb

Sales and customer service training is the smart way of getting more out of a slow economy. It is the rope that someone throws to you after you have fallen from a cliff, and you are hanging on a limb. It is the rescue that gives you something to hold on to while you recover.

Cut The Ad Budget

When I was in the advertising business and there was a slow economy, many clients opted to scrap the ad budget. Now I ask you, does it make any sense to eliminate your life preserver when you have fallen into the sea? Advertising is more necessary when times are bad, than when times are good, because advertising is a way of letting customers know that you are still in business.

Maximize Your Investment

You may have to take a more creative approach to your advertising investment. Your goal is to maximize every dollar you invest in your advertising program.

Invest Or Perish

If people, training, and advertising were important to your business before the economy ran into a crisis, does it not stand to reason that they are even more important to you when times are bad? If you are not going to invest, you might as well divest yourself of your company before it is not worth selling.

The PTA

Maybe it is time for your company to have a PTA meeting and talk about people, training and advertising.

Do Not Fall Off The Stool

There are less important areas that you can cut when times are bad, but do not cut the good areas, those that support your business. It is like cutting one or more legs off of the three-legged stool to mess with the PTA.

 

© 2008 Joe Bonura & Associates, Inc.


To see Joe and hear one of his favorite selling tips, follow this link to a video he created to share with folks who are interested in making more sales, or finding a job:

https://www.youtube.com/watch?v=Q9AyPsDMu0I

 

REPRINT info:
Joe Bonura would be pleased for you to reprint the article text free of charge (non-exclusively), but asks that you include his name and contact information:

Joe Bonura
Joe Bonura & Associates, Inc.
Website: www.bonura.com
407 Landis Lakes Court
Louisville, KY  40245

(502) 553-1746 phone

E-mail: joe@bonura.com


About Joe Bonura

His background is unique. Joe owned and operated a highly successful advertising agency for 18 years. During that time, he found his advertising campaigns were more effective when he educated his clients in the areas of sales and service. He conducted training seminars for his clients as added value. Word spread that Joe was a quality speaker and more and more people asked him to speak. The demand became so high that he sold the agency to three of his associates to start his own speaking and consulting company, Joe Bonura & Associates, Inc.

Joe is past President of the Kentucky Speakers Association and a Certified Speaking Professional (CSP), a prestigious designation earned by only 8% of the 3,600 member National Speakers Association. Joe presently serves on the board of directors of NSA.

He is author of the audio learning systems "Three-Dimensional Selling®" and "Turning Customer Satisfaction Into Customer Excitement®." He is author of the book Throw the Rabbit—The Ultimate Approach to Three-Dimensional Selling.

Click here TO ENGAGE JOE BONURA FOR A TRAINING SEMINAR AT YOUR COMPANY

 

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