Profitable sales are essential for business sustainability. They require a clear understanding of customer needs at a price that covers their costs at a profit for an effective value exchange to generate cash reserves.
Primary Implication
Losses, not profits, mount when there is no exchange of value.
Fail to generate sales because people decide not to buy from you, and you will go out of business.
Fail to have cash inflows from sales greater than cash outflows will also result in a deceased business.
Overview
The always present risk in any business is the fact that every business sends money out, trying to get consumers to buy from them with no operating cash coming back in until they choose to buy. Couple this with profits only coming after delivery of a customer’s purchase and payment received is completed at a cost less than what they pay you is the only way operating profits are earned.
Before business profits begin to form, a purchase must be made involving an exchange of value between the buyer that serves a need or satisfies a want and the seller. When a customer decides to buy, they agree to transfer their money to you in exchange for ownership of your product or to secure your service delivery. It is their purchase from you that represents cash inflow that you have the potential to earn a profit on.
The difference between sales success and failure often comes down to recognizing when people are in the mindset to need or want what your business produces. Anytime people aren’t experiencing problems needing your solutions, the challenge becomes one of persuading them to see the need. Fail to make this connection through your sales process and you will fail to generate a sale. A failed sale will always contribute to business losses, not profits.
If your prospect’s end experience through your sales process is a pass, there is no exchange of value. There is also no value exchange if you don’t profit from their purchase. Consequently, business profits originate with customer sales.
Fail to generate sales because people decide not to buy from you, and you will go out of business. Failure to have cash inflows from sales greater than cash outflows will also result in a deceased business. Ultimately, the challenge for every business is what can you do better, smarter, or more to generate higher sales at above-average profits?
The core of knowing your customer lies in knowing their purchasing decision criteria as driven by what they value most in the solution you want them to buy to solve their problem.
