Are You Solving The Right Revenue Problems?
- Cutting too deep to reduce costs. This may address the issue for a quarter or two which is a fine temporary fix. But unless you figure out the underlying revenue problem and address it, you’ll be trying to cut costs again soon. Don’t fall into a cut and shrink death spiral; remember, you can only cut a cost or a job once.
- Discounting. Reducing your prices to win business may help at the end of the month or quarter, and it may be necessary on occasion. But unless you figure out how to create more value for clients, constant discounts will erode your margins and reduce your competitive position to low-cost suppliers.
- Turning up the heat on Sales. Applying intense pressure on your sales team to perform can be extremely useful in the short term to meet a specific objective. But unless you develop your team’s capability and grow their talent, continued pressure will only create burnout and weaken company performance. I’ve observed instances where it was “the most important month/quarter” for so long it became a joke and performance declined.
The actions you can take to truly address the problem are not easy and require focus and discipline to execute. They also require leaders who will understand and commit to the time horizon required to build strength in their business. Ultimately, solving those problems creates value that is exponentially more powerful than simply improving your bottom line for a month or a quarter. Put your focus on identifying and solving the right issues that will fuel your growth.
Last month my Harvard Business Review article about how to get the strongest performance and ROI from your CRM technology was among the most read on HBR.org . The focus of the article is using your CRM system to improve sales performance, not just simply inspect sales performance. If you are trying to increase revenue and use your technology to enable growth, you may find this article valuable.
A Slice of Life Bread
Downtime isn’t a luxury – it’s a vital tool for success. If you’re reading this newsletter, it’s likely that you’re highly driven and probably guilty of trying to do too much. You aren’t a machine, and you don’t need to be in order to excel in your profession and have a fulfilling life.
Consider downtime – or what I like to think of as “recovery time” – as the fuel that rejuvenates you and enables you to consistently perform at a high level. This includes proper rest, time to let your mind wander, and activities that aren’t goal-focused. The top performers in nearly every field prioritize this.