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Day: November 14, 2019

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Growth Human Resources Leadership Personal Development Taxes

What’s Going to Save you From the Mid-Year Tax Changes?

The 2019 Mid-Year Tax changes eliminated or drastically reduced tax incentives and deductions that businesses depend on. Some of the tax changes took effect in 2018 and also impact the filing of 2019 taxes. In particular, The Tax Cuts and Jobs Act (TCJA) added dozens of tax changes that directly affect businesses. These changes are incentives and deductions that firms use to offset their tax liability.

Although, according to the IRS, “The new law changed tax rates and brackets, revised business expense deductions, increased the standard deduction, removed personal exemptions, increased the Child Tax Credit and limited or discontinued certain deductions.” www.irs.gov. Those deductions are what businesses have counted on for years.

Making it to the chopping block, here are a few deductions that have been eliminated:

Moving expenses deduction, Mileage rebated deduction, Entertainment deductions, Transportation fringe benefits, Corporate AMT, and NOL carryover, to name a few. Not only do we lose them, but we have to discover what each of them proposes.

Here is an example pertaining to entertainment. “The new law generally eliminated the deduction for entertainment, amusement or recreation expenses. But, taxpayers can continue to deduct 50 percent of the cost of business meals if an employee of the taxpayer — is present and the food or beverages aren’t lavish or extravagant.” www.irs.gov. We are noticing terms like those being used more often. What is considered lavish, extravagant, or a fringe benefit? It’s our responsibility to ascertain how the IRS defines them.

Now let’s look at what has been drastically reduced:

Tax brackets, Standard deductions, Charitable contribution deductions, State and local tax deduction capped at $10k from unlimited, Office snacks and meals, Like-kind exchange, Excess business loss limitations, Depreciation for luxury vehicles and more. Again, how does the IRS define what each means? How much is a business going to have to make up for from losing these deductions? These changes will affect the filing of 2019 and future returns and don’t count on any of them coming back.

Keeping up with all the changes requires experts that specifically focus on the monumental amount of information in over 74,000 pages of the Federal Tax Code. Your CPA and Accountant are not able to and don’t want to know all the ins and outs of the tax laws for this year. They would need to hire experts who are proficient in each of the myriad of fields. That means they hire more people and charge their clients higher rates. CPAs have 73% of their clients with one foot out the door so they don’t want to raise their prices.

Let’s turn this around. What didn’t go away? The Tax Payer Certainty and Disaster Relief Act, coming in under the Ways and Means Committee, extended WOTC (Worker’s Opportunity Tax Credit) through 2020. What also remained is Cost Segregation and R&D Mitigation. These are tools that will help offset the tax pain businesses will face in 2020.

Through these 3 programs, businesses get to keep the money instead of splitting it with the IRS. Having an engineered Cost Segregation Study executed, which is what the IRS recommends, a business can receive a sizable amount of benefit. My definition of sizable can be hundreds of thousands of dollars.

Accordingly, WOTC benefits have increased. Along with Cost Seg and WOTC, the biggest change of all comes from R&D mitigation, where tens of thousands of dollars are available in manufacturing of all kinds.

It’s ridiculous to pay the IRS more than we are required. It’s absurd not taking advantage of all the benefits, the money, that’s earmarked for businesses and just let it sit. The answer is before you. Have an engineered Cost Segregation Study completed, take advantage of WOTC, and realize what an R&D Mitigation can do for you.

Property Tax Credits

Hiring Incentives

Savings Examples

Categories
Marketing Networking Personal Development Strategy

The Rise of Thought Leaders

Business is booming! The knowledge-based service industry is now a $355 million dollar per day business. $129 billion billed annually to subject matter experts, trainers, consultants, authors, coaches, speakers, masterminds, webinars, e-courses and more.

The good news is the demand for information and thought leaders is at an all-time high. The bad news? So is the increasing supply and it’s becoming difficult to stand out from the crowded room of other experts.

There’s a growing rate of increase in competition for subject matter experts.

Seriously, subject matter experts are everywhere. Based on a simple search on LinkedIn based on titles, there are:

  • 12 million authors
  • 6 million Experts
  • 550,000 Consultants
  • 300,000 Coaches
  • 300,000 Trainers
  • 40,000 Speakers

That’s a lot of competition!

Just think, if you started a retail business you would have just a handful of competitors in your space. In the knowledge field, it’s fair to say that competition is high.
But where are they all coming from? Why are there so many experts right now?

The rise of professional services & knowledge delivery:

Ever since the 1970s, the American economy moved from a manufacturing to a service-based economy. Today the service business in the US represents 80% of the US private-sector GDP at $10 Trillion annually. The professional service sector consists of agencies, consultants, and specialists championed by individual industry experts.

As the service businesses emerged the brand promise transferred from product quality to specialized knowledge expertise and skill. This led to the rise of individuals as brands.

The Brand Called You! You Can’t Move Up if You Don’t Stand Out!

In 1997, Fast Company recognized the necessity for individuals to develop individual personal brands to compete in the cut-throat digital economy. The key to getting ahead in the services market is directly linked to establishing your personal equivalent of the Nike swoosh. “It’s that simple, that hard, and that inescapable.” At least that’s how Tom Peters put it in this classic branding piece.

Fast forward to today. Because anyone can be positioned as an expert. Everyone is.

 

For more information visit tylerhayzlett.com

Categories
Management Negotiations Operations Sales Skills Women In Business

“Negotiator – How To Overcome Non-Compliance For Better Improvement” – Negotiation Tip of the Week

“To feed improvement, starve non-compliance.” – Greg Williams, The Master Negotiator & Body Language Expert (Click to Tweet)

Click here to get the book

 

 

“Negotiator – How To Overcome Non-Compliance For Better Improvement”

Well, I guess that’s it – we lost. No, we didn’t, was the reply. Our opponents offered us a quid pro quo. And I don’t believe half of the folks negotiating knew what the heck that meant. We don’t have to comply with the outcome. And if we don’t, the only thing they can do is reopen the negotiation for our non-compliance. That was an exchange that occurred between two people that were on the short end of what they’d just branded as the initial phase of a negotiation. They were tough negotiators that sought the improvement of their plight. The strategy they’d just chose was to ignore the agreement they’d just made. Instead of abiding, they’d find a reason to ignore it.

I’m sure you can recall a time when you thought you had everything on the right track. It may have been at the end of a negotiation, or any interaction you had with someone. Everyone agreed to abide in a specific manner. Later, you discovered, that was the last thing the other party intended to do.

 

Here’s how you can handle non-compliance in the future.

 

Perspective:

First, be aware of the other party’s perception of an outcome. If they don’t believe they received a good deal, they may attempt to renege on it. Also, remember, someone’s perception is their reality. That means, you can think it’s a good deal from their vantage point, but unless they do, it’s not.

 

Seek Leverage:

Look for points of leverage that can be used to thwart the offender’s opinions. That may lie in unsuspecting places (e.g., church, community, business, political, family, social media, etc.). Depending on your ferocity to alter his non-compliance, leave no stone unturned. The more advanced the leverage you can bring to bear, the less effort you’ll have to exert to achieve a better outcome.

 

Seek Allies:

Allies can be a huge source of leverage. But you have to be cautious about how you choose them, and the environments from which they come.  

 

  • Internal – Be aware of the allies you have inside your camp. Members within your environment may have different goals and aspirations. Thus, some may work against you while casting the pretense of being on your side. To reduce the chance of working with subversives inside your camp, work with trusted sources you’ve worked with before.

 

  • Social media – Because you can’t completely control your messaging on social media, this can be a daunting channel to use when attempting to alter the opinions of your adversaries’ supporters. Thus, it’s one reason to exercise caution when placing information in those venues. Nevertheless, you can promote premises that might resonate with some individuals. Do that by placing timely information on appropriate social media outlets. To enhance your efforts, consider the outlet that the oppositions’ supporters retrieve information from when considering this as a possible tool.

 

  • News outlets – Who do you know in the news outlets in your town? If you don’t have any contacts, create some. When you want to get a message to stakeholders that might be used as leverage or for any other advantage, news outlets can be an invaluable resource. Don’t ignore them. And, if you don’t want something disparaging you say to reach others, don’t say it. Even if it’s ‘off the record’, someone may leak your words.

Communications:

 

  • Speak the right language – When communicating and attempting to bond with other parties, speak their language. That means, use the same words and idioms they use. To bond even better, use the same inflections and accents they use too. Mirroring them through speech will create the impression that you and they are similar. And it’s difficult for someone to dislike someone that’s like themselves. Conversely, if you wish to lord over others, use lofty language that signals your prominence over them.

 

  • Keep communications simple – In some cases, it may be better to keep your communications simple. For some information consumers, you should use words that are easy to understand. Don’t speak over their heads by using words that they can’t comprehend. If you do, your communication may become challenging to grasp and understand. If it’s overly challenging, they may perceive you as putting on airs, or worse, misleading.

 

  • Galvanize opponent’s supporters – It may appear contradictory to galvanize your opponent’s supporters. But your efforts to thwart their non-compliance may be enhanced by using an opponent’s supporters against him. Sometimes this can be accomplished by appealing for fairness in an attempt to capture the hearts and minds of those individuals (e.g. how would you like someone doing this to you or those you care for). At other times, you may pursue their support by casting your opponent in a light that is far outside of what’s typical for a situation. Adopting either of these maneuvers, depending on the circumstances, should allow mental movement to occur in the minds of your opponent’s followers. Remember, you’re seeking the hearts and minds of those individuals. If you want either or both, use the appropriate strategy required to acquire the outcome you’re seeking.

Reflection:

Striving to overcome non-compliance can be a daunting task if someone’s actions are allowed to fester into a formidable foe. Therefore, always be watchful of situations going awry. Take action before they hinder you. The quicker you’re able to identify the beginning of a straying position, one that’s departing from an agreement or expected behavior, the faster you can address it. That will be half the battle of confronting those that later contradict their commitment.  You will have uncovered them at the early stages of their betrayal, which will give you more time to reposition yourself and them … and everything will be right with the world.

 

Remember, you’re always negotiating!

 

Listen to Greg’s podcast at https://anchor.fm/themasternegotiator

 

After reading this article, what are you thinking? I’d like to know. Reach me at Greg@TheMasterNegotiator.com

 

To receive Greg’s free “Negotiation Tip of the Week” and the “Sunday Negotiation Insight” click here https://www.themasternegotiator.com/greg-williams/

 

 

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Categories
Biography and History Branding Personal Development

From Homeless to a $300 Million Dollar Brand

How Dwayne Johnson wrestled his brand to success

 

 

Everyone knows who Dwayne “The Rock” Johnson is today, but fewer know his story and his gritty past.

Before He Was a Household Name

Before you dismiss his success as just some lucky lottery winner you can’t relate to. You should know that when he started building his path to success years ago. He started his journey with $7 to his name the day after he thought his life was over.

After he failed his dream of nearly getting into the NFL. His stardom comes from an unbelievable story of defying a life of adversity.

His story is legendary and as they say: “Legends aren’t born their made” and Dwayne Johnson certainly made a legendary brand from scratch and there’ s a lot to be learned from his unconventional story.

We talk a lot about building personal brands today. But we don’t honestly do a great job of talking about what REALLY, goes into them.

 

Before He Was Famous

His is a story of defying the odds, teaching us that building a personal brand is just that. Personal.

Before being named “Peoples’ sexiest man alive”, before he was ranked as the highest-paid actor in Hollywood.

Before he had a hit HBO show and popular YouTube channel with millions of social media followers and endless blockbuster movies. Before hosting SNL not once but 5 times, and long before Johnson teased a run for president, his beginning started from a place of quiet despiration.

 

 

Early Days Growing Up

Johnson was a regular kid born in California but grew up in Hawaii.

His father, a former professional wrestler who was let go from the circuit. Out of work, the family was evicted from their 1-bedroom apartment after failing to meet the deadlines for paying rent.

Dwayne was 14 years old. There wasn’t much he could do, but he quickly found solitude in a local gym lifting weights.

 

Turning Passion into Purpose

Johnson mentioned in his official Facebook page:

“I started training hard at 14 years old. Not for fame or a competition, but because we were evicted from our small apartment in Hawaii. I really hated that feeling of helplessness and never wanted that to happen again. So, I did the only thing I could control with my own two hands in hopes that one day my family would never worry about being evicted again – I trained,”

 

 

This experience changed him forever.

It was this moment that carved into Johnson a sense of urgency as a survivor. Forced off the island without a place to live.

The family wound up moving to a little motel outside Nashville, Tennessee where he stole steaks from a local grocery store only to realize that he didn’t have a way to prepare the meat in the motel room.

Unfortunately, that wasn’t all he stole.

 

Overcoming His Demons

Johnson joined a gang and had been arrested eight or nine times by age 16.

But thankfully the time and energy Johnson was putting into the weight room started paying dividends when he found himself a fatherly figure in football coach named Jodi Swick who gave him a chance to play on the football team.

Dwayne fell in love with competition and chose a more productive path in sports.

He trained and worked hard eventually earning his way play for the University of Miami. His future was starting to look brighter with pro football a possibility. Until a sudden injury cut his dreams into shreds.

Warren Sapp replaced his spot on the roster who ultimately went on to play in the NFL and became famous instead of Johnson. Crushing his dreams and everything he planned for up to that moment.

 

With Only $7 in His Pocket Left

After graduating Miami with no prospects Johnson went to Canada to play semi-pro for the Calgary Stampeders in 1995 only to be cut from the team after just 2 months.

With no job and a wife to support, Dwayne had $7 to his name and no idea what to do.

He called his father to pick him up and had to move back into his parent’s apartment.

The voice in his head told him. “You’re done. Your life is over. You failed! You’re worthless.”

He later recalled recalled dealing with a bought of depression:

“I found that, with depression, one of the most important things you could realize is that you’re not alone. You’re not the first to go through it; you’re not going to be the last to go through it… I wish I had someone at that time who could just pull me aside and say, ‘Hey, it’s gonna be OK.
It’ll be OK.

I didn’t want to do a thing, I didn’t want to go anywhere. I was crying constantly. Eventually, you reach a point where you are all cried out.”.

 

He Had a Decision to Make

He spent that time pondering his next moves and if he even had any at all. Dwayne stayed cooped up in his family apartment biding his time simply cleaning.

Then one day his former Calgary coach called him up and asked him if he was interested in coming back.

But he wasn’t. Instead, Johnson turned to something familiar to him.

Watching his father and grandfather wrestle growing up, he decided to attempt a career in their footsteps. Only to receive some discouraging feedback from his family. After hearing his new career choice his father, Rocky, told Dwayne this was the worst mistake he would ever make.

But that didn’t deter Dwayne. And Rocky agreed to train him anyway. Johnson was able to arrange several tryout matches through the then WWF. He had his foot in the door. The professional wrestling journey for Johnson began in that awkward and disparaging beginning.

 

Making His WWE Debut

His father trained him and just a year after being cut from the Stampeders, Dwayne made his WWE debut in 1996 with the stage name “Rocky Maivia” combining the names of his father and grandfather. Later to be known simply as “The Rock”.

And once again, his experience didn’t go as he planned. The audience didn’t take to him or his character and it seemed as though his father was correct. It was all a mistake.

But Dwayne didn’t give up. He kept pushing forward. He made changes in his character and increased his efforts to stand out and personalize his stage presence. He went all-in.

He eventually won the audience over with his magnetic personality and became known as the most electrifying man in sports entertainment.

Dwayne started using his own catchphrases, so much so, that Merriam-Webster Dictionary officially added his “smackdown” phrase to the dictionary in 2007.

 

Leveling Up

After catching his stride in the ring and with his new and growing fans, the Rock was no longer surviving he was creating momentum.

Rather than being handed obstacles to deal with, he was finally making opportunities for himself.

Unbeknown to Johnson, at that same time, Saturday Night Live wanted to bring a pro wrestler on to host the show.

Because of the charisma he put into the ring, they chose him.

 

Hosting SNL

In 2000, Saturday Night Live asked the now well-known wrestling celebrity to take center stage and host a show.

It was at this moment that the outside mainstream world became aware of The Rock’s personality and energy. Things changed forever. Lorne Michaels recalled Johnson’s first hosting gig in a NY Times Interview:

 

“He has a wonderful sense of timing, he has an innate theatricality and because he projects strength, the audience kind of relaxes with him. He could do nuance, he could do subtle, he could do big and broad.”

 

Johnson stepped up to the plate in a big way.

He took the flame of success he created and added fuel to the fire. He decided to launch a book, a memoir for his life until that moment.

 

Building His Brand

The story of his life became number 1 on the New York Times Best Seller list. Another win that created more awareness and opened even more doors for him.

It was only five years after Johnson had started wrestling, and was thrown very quickly into the world of Hollywood films.

He adapted quickly. Bringing the charm he created in the ring to the studio. But he didn’t just hone his acting capability, he elevated his personal brand and marketing skills as well.

Johnson started changing the way movies were promoted.

Sharing set secrets and behind the scenes shots before a movie premiere used to be taboo. But the Rock turned the game upside down when he inked a deal to get paid an extra $1 million to promote his own movies due to the power to promote his project to his now enormous social followers.

That’s pretty badass.

 

 

And He isn’t Slowing Down

Dwayne currently has over

  • 100 million Instagram followers
  • 58.1 million Facebook followers
  • 13.9 million Twitter followers
  • over 2 million YouTube subscribers

Across all those channels he shares photos, videos, and announcements about the films he’s in as he’s working on them.

Johnson’s posts, featuring things like set photos with fans on set, often create organic media placements.

Creating even more coverage for the films he stars in, and it cost him nothing.

Conclusion

He not only stepped into Hollywood as a player, he quickly learned how to play the game and changed it.

Through his years of talented brand building. He adapted and capitalized by being the most entertaining player in his space.

At the beginning of Dwayne Johnson’s journey, it would be difficult to predict the success he would manifest if any at all. Through his perseverance and determination not to quit and race towards new opportunities, today Dwayne Johnson’s net worth is north of $320 million and climbing.

He’s a 100% certified self-made-man, an inspiration to millions, and the hardest worker in the room. But best of all, through his success, he remained as humble as the man that began the journey.

Threw his story, his actions, and his positive influence, he became a man worth following.

 

“Be the type of person that when your feet touch the floor in the morning the Devil says, “aww shit…there up.”

– Dwayne Johnson

 

For more information visit tylerhayzlett.com

 

Categories
Best Practices Growth Management Skills Technology

Don’t Get Stuck; Move Forward

A difficult problem can and will eventually become a roadblock so large that it renders forward progress in any productive way virtually impossible. The direct result of a roadblock as such is more often than not, procrastination, and the longer this problem is in place, the more you become convinced there are no solutions. This couldn’t be further from the truth.

In paying attention to the Hard Trends that will shape the future of your organization, you can be more anticipatory, not only in your disruption but also in your method of pre-solving problems before they exist. As a matter of fact, in accordance with a concept I’ve mentioned in previous articles, you will foresee a problem that you can merely just skip. That’s right; you can skip the problems you see headed your way!

You may wonder how this is possible; how can you just skip a problem? Here are a few simple steps you can use to implement this strategy and progress into the future.

1. Your Problem isn’t the Real Problem

Often, you can’t see the real problem, because you’re blinded by what you perceive as the problem. By skipping what you perceive as the problem, you are free to discover the real problem. Perhaps your perceived problem is not having the budget to hire a large number of employees, when in reality, if you skip that problem, the real problem is finding better solutions, not a lack of staff. Forget about what you think is the problem. If that problem didn’t exist, what would be the real problem? Often the real problem and solution will surface once you eliminate the perceived problem.

2. Think in Terms of Opposites

Often, the opposite of what you perceive the problem to be is really your solution. If your problem is “saving money,” the opposite of that is “spending money.” Instead of focusing on how you can save money, try focusing on how much your company is currently spending. Focusing on the spending habits and how to either correct them or keep them in check will then automatically present the solution of saved money to you and your company.

3. Look at Technology for Help

Today’s technology is ever-expanding, and it constantly offers a wealth of new options for solving numerous problems. Can’t find a good way to effectively communicate with remote workers at your company? There are several video communication tools available today that would solve this issue. Need a way to obtain more ideas for improving your products or services? Use the plethora of social media outlets to either see what your customers are saying, or connect directly with them via surveys and inquiries. Look at what you need done and find a technological solution to automate it for you.

4. Peel the Onion

Think of any problem your company faces as the top layer of an onion. To find the real problem, you need to peel the layers back by listing the components of the problem to reveal whether or not you are working on the correct issue and ultimately toward the correct solution. In analyzing all of the components of what you perceive the problem to be, often  you will find that the core issue you’re focusing on isn’t what is causing the biggest roadblock, but that, perhaps, a sub-issue that you reveal upon peeling the problem layers is truly the nucleus of your problem.

5. Focus on One Issue at a Time

Problems can be quite complex, with many corridors that lead you to a road of worry and off the path toward a solution. Even worse, sometimes the problem actually has many components working against you simultaneously, depending on your industry. Many problems are made up of multiple problems, not just one isolated incident. Separating the other problems allows you to be better at seeing and solving the real problem, the one you should focus on, when you separate it from the other problems. Don’t spread yourself too thin; take it one step at a time.

Skip to the Finish

Every problem has a solution – some better than others. By asking yourself if you can skip the problem entirely, you free your mind to look beyond the roadblock. Simultaneously, the act of skipping a problem teaches you to become more anticipatory in many other ways, especially when your problem is actually disruption heading your company’s way. Learning to pay attention to the Hard Trends shaping your industry’s future and being able to determine what is a Hard Trend versus what is a Soft Trend will also teach you how to pre-solve any problems that may come your way. Soon, having to skip a problem won’t be necessary; you’ll already have a solution before it even occurs.

Categories
Best Practices Investing Management Marketing Personal Development Sales

When Sales isn’t Paid on Profits — You Get What You Pay For

If your sales compensation plan fails to reward building value — and then pricing to it — you’ll get exactly what you ask from your salespeople. And all the bad things that come with it —especially if you’re a sales leader.  Let’s explore the implications.

While you’re reading this, you have salespeople working hard to win business that you don’t want. A lot of that is because of your incentive plan. When your people aren’t paid to increase deal profitability, many won’t bother. Sadly, this is the sales leader’s fault.  Salespeople may not be fully coin-operated, and they certainly aren’t bad or lazy…but they’re also not stupid. A comp plan that promises that you won’t push them to work any harder for a deal than they have to, they’ll win deals the easy way: by discounting.

The Obvious Outcome: Profits

We’ve all heard that “Nothing starts until a sale is made”. Curiously, nobody brings up that “Everything ends when sales aren’t profitable”. I just painfully watched this outcome at a formerly-great company.  What a shame.

For those who have never managed a P&L, let me make it simple.  Every top-line dollar discounted off a sale drops off the bottom line as well (there is no change in any of your cost lines).  Pricing dollars are profit dollars.

Think about it another way: in a price war, the only party who wins is the lowest-cost competitor (and no, customers don’t win. Very few of them actually want the low-cost option). If that lowest-cost provider isn’t you, stop playing a game that you can’t win.   That means stop compensating discounting dysfunction.

If you don’t reward pricing to value, you’ll get exactly the profitability you’re asking for.

The Next Outcome:  Affording Differentiation.

Customers choose suppliers based on differentiation, which makes differentiation the lifeblood of business, sales…and the currency of every sales organization. It’s as simple as that.

Your company can differentiate in multiple ways:

  • Product/service fitness for use,
  • Product/service image,
  • Post-sale (I call it between-sales) service,
  • Availability/convenience,
  • Saving one or more customer costs,
  • Making the customer more competitive,
  • etc.
  • OK, and the lowest price.

Look back at that list. They all require resource investments to develop. Yes, even achieving long-term cost advantage (operational efficiency) consumes resources. Differentiation isn’t free, it’s purchased. If your profit streams don’t feed the investments that build on your differentiation, you’re hollowing out your company.

If you don’t reward pricing to differentiated value, you’ll eventually get exactly the level of differentiation you can afford.

Another Bad Outcome:  Sales’ Place at the Table

I hear sales leaders complain that they and/or their function doesn’t get the respect it deserves. As a sales leader, did you ever ask if you’re getting exactly the respect you’ve built?

Imagine people in any other department of your company, all of whom work hard to maximize profit.  Now imagine them hearing some knucklehead in sales saying “it’s the company’s job to make a profit at this price”…then then being backed by the sales leader (no, this isn’t hypothetical.  It happens.). If sales don’t work toward the same thing (profit) as everyone else in the company, why would their sales leader “get a seat at the leadership table”?

I’ve heard sales complain that it is “unfair to pay us on profitability”.  Remember: sales not only works with an unobstructed view to customer value — it’s the main job is building value in customers’ minds. Given these facts, does this “unfairness” complaint — from the one function charged with building and capturing value — earn the company’s trust? Executives’ trust?  Would an executive dare to bring anyone who claimed that “unfairness” in front of their board? Should such a sales leader be anywhere on the succession plan?

Conversely, imagine this alternate reality: Sales is the function consistently bringing new customer value insights back to the hive for commercialization: driving focused innovation, powerful differentiation, impactful marketing strategies, and confidently capturing profitable pricing that pays for it all.  Would a leader of such a sales function deserve “a seat at the table”?

If you don’t reward pricing to value, you’ll get exactly the respect you’ve earned.

Perhaps Worst of All:  You’ll Get the Customers You Deserve.

Price-sensitive customers are the least loyal.  Often they’re the most demanding, most costly, hardest to service, make your people the most miserable and stressed, and consume disproportionate resources. If your people aren’t able to — or aren’t paid to — capture value, you’ll find yourself winning the worst customers…the ones your smarter competitors are thrilled to let you win…and Barry Trailer will be right again.

If your salespeople aren’t paid to co-create value, they’ll end up co-creating apathy.

How Bad Is It, Really?

The odds are, you don’t even know how bad your problem is.

It seems that only a quarter of sales teams have any profitability component in their comp plans. And that’s only the top level of the problem.

Every company should have deep analytics that tracks pricing/discounting behavior, and very few do. The overwhelming majority of companies don’t even track how much they give away in discounts every year, much less how/where discount dollars are allocated.  Even fewer have a robust price exception/ discounting system. For instance, can you answer this for your own company: Are pricing exceptions based on objectively measured customer value, the whiniest salesperson (OK, the salesperson best able to game your system), most politically connected regional manager, or something else?

CEOs and CFOs:  Do you even track how many discount dollars you spend, and how they are distributed? Can you break down how discounting dollars (or gross margins) are distributed by salesperson, sales manager, customer, region, etc.  If not, you’re probably bleeding profit dollars without knowing it. Your cost of sales may be twice what you think it is.

If you don’t measure your pricing practices, you don’t understand them…and you don’t know how much they’re costing you.

Rewarding it vs. Doing Something About it

This article focuses on your compensation plan, but it should be apparent that comp is only one leg of a stool.  The stool topples without a solid comp plan, but also can’t stand if comp is the only issue you solve.

Other legs of the stool are more directly focused on how to sell value – the behaviors getting rewarded under the right comp plan.  Chief among these are training and ongoing coaching: enablement, in the current vernacular.

Once your sales team wants to consistently build, measure – and capture — customer value, a lot of powerful outcomes materialize.

  • More sales at more profitable prices, which funds even more differentiation.
  • Sales opportunity reviews that discuss customer value display selling expertise, which drives the credibility of the sales organization.
  • Clear & objective measurement of customer value can drive objective, precise pricing and discounting decisions. Your whole company can objectively see why a given discount was needed.
  • More accurate forecasts, which of course drives credibility of the sales organization

Want to talk about anything in this article?  Post it below, or if you want to have a deeper dialogue, contact me. As always, please like and/or share it with your networks.

To Your Success!