SELLING SHORTER

MAXIMIZING YOUR AND KI’s PROFITABILITY

By the End of this Session,You Will:

• Understand the 2005 Commission Tables• Understand how discounting effects your

commissions, accruals, and KI’s profitability.

• You will be able to recite and execute at least 3 Strategies that will help you shorten your discounts and increase your commissions.

What is more complicated ?

• The IRS Tax Code

OR

• The KI Commission Schedule

Answer:

• The IRS Tax Code

but the 2004 KI Commission Schedule is a close second !

3 Objectives for The New 2005 Commission Schedule:

• Simplification !!

• Increase the Financial Reward for selling at a Shorter Discount and increasing the profitability for the Rep and for KI.

• Keep it Revenue Neutral.

Previous Commission Tables

• 8 Separate Product Tables each with a different schedule.

• 13 Total Tables to remember.

• 5 Pages

• Difficult to understand or even remember what your commission is at what discount.

2005 Commission Tables

• 5 Tables / 4 Product Categories

• 1 Page

• Easy to understand and retain.

• Higher commissions for selling shorter.

• Payout overall is actually higher in aggregate than in 2004.

Why Sell Shorter?

• Make more money for yourself ! • Help make KI more profitable ! • More profits at KI means more earnings to

reinvest in new products & innovations, people, marketing, and other resources.

• Help Roy to pay for his kid’s college education

Why Sell Shorter

Examples:1. What is the impact to the rep of moving a

sale from 55% off to 50% off ?2. What is the impact to the Rep of moving

his/her annual sales from 55% off to 53% off ?

3. What if the District shortened its discount from 55% off to 54% off ?

Strategies to Sell Shorter

1. Control the Selling Process!Control the specification at the A&D level or with the end user – its much easier to keep control of your pricing and discounting if KI is specified !

• Get in early in the project !• Ask more questions – SPIN !• Know your competition !• Sell solutions that are relevant to the customer!• Be Credible ! Be likeable!• Sell Quality !

Short Sell

The difference between quality and low-cost production

Ferrari from Italy

Ferrari from India

1st Press this Button

2nd Press this Button

2. Spec Specials !

• Use specials to set the specification apart from other competitors !

• Do what others can’t do !• Specials often don’t need to be discounted as

deeply as standard product - since there may not be a direct competitive comparison.

3. SSN – Sell Specials @ Net With Specials …

• There is no need to use standard discounting practices !• There is no need to show a discount – just Net it out !• Don’t sell discounts – sell solutions. • Tell them that you built it up from cost. • Sometimes there is nothing a customer can compare to –

that’s ok… and its also its ok to make a little extra profit on a special !!

4. Negotiate the true value of the services !

• Manage/Negotiate accruals and overbills to truly reflect the level of services and value rendered by any 3rd Parties (ie. installers, dealers …).

• Ex: Schriever AFB

So… what can you do to Sell Shorter ?

• Be aware of your Commission Tables and the impact that discounts have on YOUR revenue.

• Change your habits.

• Control the selling process.

• Scrutinize what is being paid for services.

• Use Specials to your advantage.