How Product Mix Affects Your Revenue

Having a healthy product mix should be as essential to your business as a batting average is to a professional baseball player. Consider this scenario:

Sales guy #1: Sells lots of lower-end and cost-effective products, produces a high close rate but low margins.

Sales guy #2: Sells few high-end and top of the line series, produces a low close rate but high margins.

In keeping with the baseball metaphor, you can equate sales guy #1 to a batter that hits for the bases every time. While he's not hitting them out of the park with stellar home runs, he's actively and consistently loading the bases. Sales guy #2 is inconsistent, but an excellent home run hitter. So which player is best to have on the team? Neither.

In order to have a successful team you need a group of individuals with knowledge of both the high and low-end, as well as specialty and common products. In an ideal product mix, your team would be selling about 10 percent low-end, 7 to 9 percent high-end and an 80 percent mix of in-between sales. This protects your margins, their close rates, and the overall stability of your company. Regular sales with a good mix of product will help keep your installers busy every day, morale high, and the company successful.

So dealers, here's what it boils down to: if you can't sustain or grow your business because your margins don't cover your overhead, consider training your sales people to offer a wider variety of product mix in their sales process.

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