Commercial excellence simplified

Due to the current global economic environment, commercial excellence is living its golden age. Inflation, supply chain problems, and a negative economic outlook create a lot of pressure on the profitability of the companies. Therefore, it forces companies to revisit their commercial operating system.

Commercial excellence is a fancy vague term. It sounds like only big multinationals can afford to work on commercial excellence. Indeed its foundations lie in the basics of commerce. Over the centuries, merchants have primarily used the principles of commercial excellence to survive in the business. 

So any business of any size can (and should) implement commercial excellence principles. But, what exactly is commercial excellence?

Bain & Company defines it as “… the design and delivery of commercial best practices that maximize profitable revenue, including programs to consistently improve pricing, salesforce effectiveness, product mix, customer selection and focus, and distributor management.”

Still a fancy definition, no?

For me, the short answer is “Selectivity.”

Selectivity in defining your prices, selectivity in deciding which customers you would like to work with, selectivity in how to reach your customers, selectivity in determining which products you would like to sell more, selectivity in where to put your attention, selectivity in choosing your team members… The list goes on.

And you do not need to have a multibillion-dollar business to be (commercially speaking) selective. You can be selective from day one.

Then, the second question comes. How to be selective? 

Selectivity in commerce lies in clarity. It is about knowing why you are doing what you are doing. Is it a one-off commercial transaction, or are you working on building a commercial network that would bring you compound benefits in the long run? Are you looking for being the best in your field, regardless of the financial results, or are you just playing it safe to survive? Once you have clarity, you can align your price, customers, sales team, offering, partners etc.

Simon Sinek wrote a whole book about the why, so I would not go deep in this topic. But please remember that if you do not know your why, you will hardly have clarity.

At the end of the day, I am working in commercial excellence, and of course, I have a fancy long answer as well.

I describe it (like a consultant 😊) with SPOT: Strategy, Performance, Operations and Technology. 

And don’t worry I am not going there now. Maybe in another post… And in all cases I prefer the short answer: Selectivity.