Dialing
For Dollars: p.172-173
Suppose you are a
salesperson,
and your
company’s
CRM forecasts
that
your quarterly sales will be
substantially
under quota.
You
call your best
customers
to increase
sales,
but no one is
willing
to buy more.
Your
boss says
that it
has been a
bad
quarter for all of
the
salespeople. It’s
so bad,
in fact, that
the
vice president of
sales
has authorized
a
20-percent
discount
on new
orders.
The only
stipulation
is that
customers
must take
delivery
prior to the end of
the
quarter so that
accounting
can book the
order.
“Start dialing for
dollars,”
she says, “and get
what
you can. Be creative.”
Using
your CRM, you
identify
your top
customers
and present the
discount
offer to them. The
first
customer balks at increasing her inventory, “I
just
don’t think we can sell that much.”
“Well,”
you respond, “how about if we agree to
take
back any inventory you don’t sell next quarter?”
(By
doing this, you increase your current sales and
commission,
and you also help your company make
its
quarterly sales projections. The additional product
is
likely to come back next quarter, but you think,
“Hey, that’s then and this is now.”)
“OK,” she says,
“but I
want you to
stipulate the
return option on
the
purchase order.”
You know that you
cannot write that
on the
purchase order
because
accounting won’t
book all of
the order if you
do. So you tell her
that you’ll send
her an email with that
stipulation. She
increases her order,
and accounting
books the full
amount.
With another
customer, you
try a second strategy.
Instead
of offering the
discount, you
offer the product
at full price, but
agree to pay a
20-percent credit in
the next quarter.
That way you can
book the full price
now. You pitch
this offer as
follows: “Our
marketing
department analyzed
past sales using
our fancy new
computer system,
and we
know that
increasing
advertising will
cause
additional sales.
So, if you
order more product
now,
next quarter we’ll
give
you 20 percent of
the
order back to pay
for
advertising.”
In truth, you doubt
the customer will spend
the money on
advertising. Instead, they’ll just take
the credit and sit
on a bigger inventory. That will
kill your sales to
them next quarter, but you’ll
solve that problem
then.
Even with these
additional orders, you’re still
under quota. In
desperation, you decide to sell
product to a
fictitious company that is “owned” by
your
brother-in-law. You set up a new account, and
when accounting
calls your brother-in-law for a
credit check, he
cooperates with your scheme. You
then sell $40,000
of product to the fictitious
company and ship
the product to your brother-inlaw’s
garage. Accounting
books the revenue in the
quarter, and you
have finally made quota. A week
into the next
quarter, your brother-in-law returns
the merchandise.
Meanwhile, unknown
to you, your company’s
ERP system is
scheduling production. The program
that creates the
production schedule reads the
sales from your
activities (and those of the other
salespeople) and
finds a sharp increase in product
demand.
Accordingly, it generates a schedule that
calls for
substantial production increases and
schedules workers
for the production runs. The
production system,
in turn, schedules the material
requirements with
the inventory application, which
increases raw
materials purchases to meet the
increased
production schedule.
