Anyone taking more than a passing interest in the Gordon Brown inspired gloomy UK retail expectations will know that among others, M&S are experiencing less growth than many analysts consider achievable.
Cognisant of this terrific commentator Jeff Randall devised the Pants Index. In an allied style to the Economist’s Big Mac Index (they should really do one based on Heineken too though!), it demonstrates the alarming fortunes dip can be traced to their slashing of men’s underwear prices.
The columnist states that prices for M&S goods overall are dropping around 5%. So, what do you do if you’re in a deflationary marketplace and have previously positioned yourself as a quality provider? As the author so wonderfully opines about their under-performance:
“This is what happens when management elects to fight in the trenches on price, rather than moving to the high ground of quality, where John Lewis has just enjoyed another solid Christmas.”
I reckon this is going to be hugely relevant to B2B solution sales people in 2008. Five years ago I worked alongside 150 sales people selling into the construction arena. Their management forecast probable market shrinkage at 6% for the coming year. So what did they do when formulating negotiating strategy? They added as much extra value as they could muster into each deal, crucially maintaining their margins by providing bigger bangs for the client bucks. And the results? Well, suffice to say sales out-stripped targets leading to promotions all-round, especially for excellent boss Mark Kelly, currently pulling up tree-trunks for IMI.
It is indeed a struggle to see how M&S can make money out of enticing customers from the Primarks of the world through 60pence boxers. But it is possible to see how solution sellers can reach targets by thinking carefully about what extra services/products they can bundle up into creating a deal…