Ep. 106 – The Second P of Sales: Performance

FourPs-ImageNow that we’re laid the groundwork for the “Four Ps of Sales” by thoroughly examining “Process,” it’s time to dive into the second P: “Performance.” Understanding the optimization of performance means having a firm grasp on your expenses, your gross revenues, and your overall revenue goals.

In this episode, host and business coach Tom Ryan guides listeners through the fundamentals of sales performance. As always, Tom is joined by co-host Jason Pyles. To catch up on the “Four Ps of Sales,” check out: Overview; “Process” (Part 1, Part 2, and Part 3).

• Introduction, and recap of the “4 Ps of Sales”

• Performance: How many sales you need to hit your goals and cover your expenses

• Revenue goals, and knowing where you’re going

• Profit & Loss exercise

• Knowing what your expenses actually are

  1. Average sales
  2. Cost of goods
  3. Net profit
  4. Operating expenses

• The Sales Cycle: The time it takes to convert an opportunity into a closed piece of business

• Example: Kickass Cat Sweaters

  • Total Cost: $24.95
    • Product cost: $18.95
    • Packaging: $1
    • Shipping: $3.50
    • Credit card fee: $1.50
  • Retail Price: $49.95
  • Gross Profit ($49.95 – $24.95): $25
  • Operating & fixed expenses (rent, insurance, salaries): $150,000/year.
  • Gross profit divided by fixed expenses ($150,000/25) = 6,000
  • Annual sales needed to break even: 6,000

• Sign off, and ways to contact the show

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