Maximize Profits By Minimizing ‘Departmentalism’

Posted on Friday, February 15, 2019

If you could never run another newspaper, radio, television, direct mail or online ad, how could you bring in customers?"

Your firm needs to institute a profit process so there is something in it for all staff members. Tremendous additional revenue can come simply by providing a way for your departments to collaborate with each other. Consider developing a commission system for all employees so that sales referrals are rewarded.

The simple answer is by working together. Frequently, many companies have absolutely no impetus for one department to collaborate with another. This kind of "departmentalism" can defeat a company.

But by sharing information, your sales staff can tap into clues that an existing or past customer needs more products or services. For example, here's how one auto dealership works as a team to find leads for new car sales:

In the service department, when a customer decides the estimate for repairing their old car is too high.
In the body shop, when a customer refuses an estimate because it's too expensive to fix the dents in a car.
In the warranty department, when a customer's extended warranty runs out, leaving them financially exposed in the case of a major service problem.
In the leasing department, when a customer's lease expires.

These are all opportunities to sell a satisfied customer a new car. But an auto dealership can't capitalize on them unless all of its departments are communicating with each other and working with the sales department.

In many companies, if you ask customer service employees why they don't inform the sales department when someone asks about additional products, they say: "It isn't my job and there's nothing in it for me."

At one company, a similar reward system improved sales starting from the very first phone calls that came in from prospective customers. The receptionist became very irritable in the late afternoons when many calls came in at once. But now, the receptionist is paid $2 for every product sold because she successfully routed a call to a salesperson. This changed her entire attitude and made her part of the company's profit culture. Her focus became courteous customer service and sales, not just answering the telephone.

Look around your company for these types of opportunities. You may find that sales increase when your employees are all on the same profit team.

Posted in Tax Topics For Individuals, Tax And Accounting Topics For Business

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.