Last time, we discussed how having a “Mafia Offer”, an offer so good that (1) your customers can’t refuse it and (2) your competition can’t or won’t match it — had the potential to dramatically increase sales.
A Mafia Offer is another “technology” that is part of the Theory of Constraints (TOC), a holistic business process improvement body of knowledge developed by Dr. Goldratt, author of The Goal.
TOC is especially effective in machine shops. In fact, it is usually possible to develop an excellent Mafia Offer for a machine shop, especially if your competitors have long lead-times and poor due-date performance.
Here’s a test: do you and your competitors’ quote lead-times that you know have a low probability of being met just to get the order? If so, you have an excellent Mafia Offer. Would you like to find out what it is?
The process of implementing the internal changes a Mafia Offer requires is not trivial, but doing so improves sales closing rates from less than 5% to as high as 80%. Typically, additional sales people aren’t required, but sales funnel management is.
Why? Because having a Mafia Offer doesn’t address the following issues with your sales process:
- Prospects aren’t aware of you
- You aren’t aware of enough prospects
- You have difficulty getting in to see your prospect
- You have a long sales cycle
- You have difficulty quoting as many jobs as you would like
- Quote turnaround is too long
- There are peaks and valleys of booking sales.
Sales funnel management begins with realizing that sales is a process. As Dr. Deming said, “If you can’t describe what you are doing as a process, you don’t know what you’re doing”. Many companies abdicate selling activities to individual sales people, and then have understandable difficulty managing and measuring sales performance and effectiveness.
…to be continued.
Here’s to maximizing YOUR profits!