By: Rick Phelps, Principal, Synchronous Solutions – RickPhelps@SynchronousSolutions.com
I am writing this article in early February as the countertop industry is pulling out of the annual January business slump and heading toward the high demand months of spring. It’s the perfect time to talk about how to tie the need for more sales to the capacity of the production process.
Nature abhors a vacuum. Where a vacuum exists, nature will attempt to fill the void. It is a powerful law of nature, and it’s a law you can leverage to help drive sales in your business. When your sales team know there is a void to fill, they will be more likely to rise to the occasion.
The picture above is at the top of the Sales Daily Standup Meeting page of our Synchronous Flow Operating System software. It compares capacity against the sales forecast for the remainder of the year. The blue area of the chart is the UNSOLD capacity of this business’s production Constraint.
In the software, this chart headlines the top of the Sales page and must be monitored daily, to leverage the Law of Vacuum in sales. Even at the peak of demand in late summer (the valley in the chart), there is almost 20% capacity yet to be sold. It is a daily reminder that selling is an ongoing game with a specific goal in mind. That goal is to fill the capacity of the business with work to ensure profitability.
When there is capacity to be sold there is opportunity. The opportunity is to offer incentives to desirable new prospects. Those prospects are the difference between filling your capacity, which will pump dollars to your bottom line, and letting that capacity sit idle.
There is an interesting conundrum with this concept: you don’t sell on price you sell on value. What keeps this pursuit of other’s clients from turning into a price war and a doom loop race to the bottom? Good question!
Let’s flip the script. That target prospect above – that is YOUR client, and it is your competition, with idle capacity, eyeing them, making them a Mafia offer – an offer they cannot refuse. Now what?
“You don’t sell on price you sell on value” better be more than a quaint cliché. Your customer service better be second to none. Your error rate 2% or less. Your responsiveness; legendary.
Your countertop business needs to be excellent. Excellence comes from having great business systems managed by great managers: great marketing systems, sales systems, customer service systems, production systems, field systems, financial systems, HR systems, and on and on.
Business systems are implemented, monitored, and continuously improved by talented managers. What investment are you making in your management team to stave off the competition?
2024 was a wake-up call for many in this industry. Countertop fabricating capacity exceeded demand, resulting in many of you taking a big hit on the bottom line. That picture of unsold capacity at the top of this article was your picture. It was also your competitor’s picture.
Nature arbores a vacuum. That giant sucking sound you hear is your hungry competition coveting your prized clients.
The best defense is a strong offense. Go on the offensive; get your management team working to get your systems to world class performance levels. Then keep constantly improving them to stay that way. Make the cost of leaving you for the competition so high and so risky, your clients wouldn’t dare to even think about it. REALLY sell on value.
Understand the implications and impact of unsold capacity on your business. Understand the huge potential that creates for your sales team, and make sure they understand it as well. Find creative ways to make Mafia offers that won’t destroy selling on value and won’t degrade your marketplace.
Nature abhors a vacuum. Use it to your advantage. Keep visibility of your unsold capacity front and center every day. Get uncomfortable with it. Get your sales team uncomfortable with it. For a business, it is abhorrent; do something about it!
And when your complacent salesperson, satisfied with the status quo, tells you the downturns are just the way this business is, happens every year. Don’t accept the excuse; do something about it!
Synchronous Solutions guides fabricating companies in implementing world class business systems that span the business, from marketing to invoicing, while simultaneously developing the managerial and leadership talent required to manage, maintain and improve those systems.
If the graph above looks anything like what you experienced, we need to talk. CLICK HERE to identify your Top 5 Business Challenges.
