‘Share Doesn’t Pay The Bills. Profits Do!’

Whenever my appendages hit the keyboard, this philosophical entity invades my body and out spews idyllic ideas.
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Whenever my appendages hit the keyboard, this philosophical entity invades my body and out spews idyllic ideas.

I’m thinking about manufacturers caught in this web called growth. Typically, it’s top line growth. How much more can we sell? Are there new customers somewhere that are untapped?

Then invariably I get a call along the lines of, “Richard, we’ve made a decision to add this dealer, or this buying group, or this chain.” My first reaction, which is a result of years of experience, is to say, “OK, we’ll see how it works out.”

Now an upscale brand has usually made a bad decision to go down-market in hopes of capturing more business. Chase the top line! Change your “go-to market philosophy” because “you need more sales.”

Here’s my answer, “Share doesn’t pay the bills. Profits do!”

How many Japanese TV manufacturers learned this cruel lesson the hard way? Great companies like Mitsubishi, Sony, Panasonic, Fujitsu, Hitachi, and JVC all prided themselves on share.

AU’s No. 1 goal is “to deliver profits to members to ensure their long term success.” (Don’t forget that both dealers and vendors are members.) Instead of widening distribution, why not try to develop more business with your existing clients? Why not get more share from your current dealers by devising sales promotions, better training, more alacrity of communication between the parties, or maybe a hard working rep to motivate the troops?

Dealers are culpable too. By adding lines on top of lines, the sales and focus are dramatically diminished. Be important to your suppliers, and they will reward you in ways you never thought. Think bottom line, not top line. And don’t forget to charge more for your scarcest resource, labor.

We are all in this together. We should work in unison to get as much business as possible from every existing dealer and the smoothest most fulfilling relationship with every supplier.

Enough with the philosophy, who’s going to win the NCAA basketball tourney?

Richard Glikes is group president of Azione Unlimited, which is holding its spring conference March 19-21 in Las Vegas.

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