Cost cutting is the tool of choice for sales managers who wish to survive today’s tough economy. While cutting and controlling costs is vital, however, it is not a strategy – it’s a tactic. Cost cutting offers no competitive advantage and can easily lead to diminishing returns. Dave Anderson, author of No-Nonsense Leadership (Learn to Lead Press, 2001), offers these tips for growing your business in tough times without pinching pennies.
1. Don’t just optimize; innovate!
Optimizing, a.k.a. cost cutting, is a tactic. Innovation, or finding better ways to do things, is a strategy. Innovative ways of building a business include developing and quickly promoting a pool of upcoming talent; creating an owner loyalty program that makes it insane for a customer to buy elsewhere; implementing unique marketing that sets your business apart from your competitors; and establishing a proactive, year-round recruiting program that builds a pipeline of talent.
2. Don’t make cuts that will affect your capacity to produce.
Don’t cut the training and tools that might help boost your salespeople’s performance. Managers who boast about underspending on a budget miss the point. The point is not whether the budget was underspent, but if it was well spent.
3. Don’t obsess over numbers.
Don’t waste your time excessively examining your competitors’ financial statements and best practices. Financial numbers are lagging indicators. Put your time and effort into strategic reviews – it’s more productive for a sales team to spend time on different business practices and less time on best practices. In other words, rather than just optimizing and getting better, it’s smarter to become strategically different in a way that makes your business stand out.
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