Read these words: footfall, basket spend, purchase frequency, cash cycle, margin mix, promotional mix, shelf productivity, stock investment, stock cover, waste reduction, mark-downs. Feeling a bit nauseous? Don’t assume the only way to motivate your customer is by conceding margin and paying fees. The buyer’s commercial motivation is driven by all these business fundamentals.
But do you have the capability to play them to your advantage too? Reach for your calculator… as the ability to use numbers can persuasively transform your results.
Excellent account management boils down to skills in selling, negotiation and planning. Whatever you need to do or say will fit under those broad headlines: communication and presentation skills are subsets of selling trading is part of negotiation and category management is within planning.
So as long as your planning, selling and negotiation strategies and values don’t conflict, you stand a chance of driving great results through. But financial acumen is fundamental to all three disciplines. I would even describe it as the fourth pillar - a cornerstone of capability.
Commercial managers need to be confident and agile with numbers under pressure. Some are gifted, with a natural talent for mental arithmetic, but for others the calculator is more important than the pen. Buyers are working their magic on a calculator and spreadsheet every day. They have the ability to confuse and abuse so take your time and get it right. Don’t let them baffle you with numbers. In order to negotiate effectively you need to understand whether what you are being told is financial reality or financial abuse. You must understand the difference between your costs and the value to the trade.
Of course, identifying the financial tactic is only part of the answer, as you must also disarm it. A great way to stand your ground when under financial abuse is to calculate what I call the ‘sitting on’ number how much of your money they are sitting on due to payment terms earning them a double margin.
So get crunching. If you don’t understand the financial fundamentals of the sell and buy, you can’t complain when the buyer robs you blind.