Podcast Ep 149 | My Gross Margin is dropping what should I do?

Gross mar­gin is one of the most impor­tant num­bers in your business.

Gross Mar­gin (per­cent­age) is a good indi­ca­tor that your busi­ness is healthy: Both on the selling/​strategy end indi­cat­ing your cus­tomer is will­ing to pay you well for what you offer, and on the oper­a­tions end demon­strat­ing that you can effi­cient­ly pro­duce what the cus­tomer wants.

The trend of this num­ber over time can tell quite the sto­ry. When it starts to fade, as it often can, it is a rea­son for concern. 

This week we talk about Gross Mar­gin ero­sion, why it hap­pens and what you should do if you find your­self in this situation.

EPISODE TRAN­SCRIPT

Please note that this episode was tran­scribed using an AI appli­ca­tion and may not be 100% gram­mat­i­cal­ly cor­rect – but it will still allow you to scan the episode for key content.

Brad Giles 00:13

Hi, wel­come to the growth whis­pers where every­thing we talk about is build­ing endur­ing great com­pa­nies, com­pa­nies that last that endure. And com­pa­nies that actu­al­ly peo­ple enjoy own­ing and work­ing in. My name is Brad Giles. And today as always, I’m joined by my co host, Kevin Lawrence. Good. Oh, Kevin, how are things today?

Kevin Lawrence 00:32

Things are great Brad. Just set­tling in here and into still in our win­ter sea­son. But yeah, good. Come for­ward to the week got a very busy week ahead and look­ing for­ward to the show today.

Brad Giles 00:46

Me too. Me too. One of in the absolute busi­ness nerd per­spec­tive. One of my favorite sub­jects, gross mar­gin, but we always like to start with a word or phrase of the day. What might be on your mind in terms of a word or phrase today GIF?

Kevin Lawrence 01:04

that, hey, it’s ramen. I you know, grow­ing up as a kid, we’d have these instant ramen noo­dles is some­thing you can make when mum or dad was­n’t around to cook. Yeah. And I thought ramen was like, right up there with Kraft din­ner like we would have what here in North Amer­i­ca. And I went out and had a ramen on the week­end. And it blew my mind. Like it was absolute­ly incred­i­ble. And I think the prin­ci­ple of it is just, it’s just how at any stage of life, you can be opened up to new expe­ri­ences that you nev­er thought so it’s not so much with the ramen. It was out­stand­ing. It was in Chi­na­town in Van­cou­ver was amaz­ing place. It was called the ramen Butch­er. And it was it was but it was more that there’s so many dif­fer­ent expe­ri­ences, per­spec­tives and things in the world. That that, that we can be sur­prised by things pleas­ant­ly surprised.

Brad Giles 02:00

Awe­some. Awe­some. For me, friend actu­al­ly asked me he said what’s your word for 2023. And I don’t real­ly get into that stuff. But I felt oblig­ed. His was adven­ture. But mine was com­pound to com­pound and com­pound and can con­tin­ue to com­pound things that are work­ing and make them bet­ter. And it felt right. And it still feels right if there is such a thing, but for me, yeah, what’s my word or phrase is com­pound­ing so

Kevin Lawrence 02:30

com­pound that’s very prac­ti­cal bread com­pound, com­pound­ing fla­vors of ramen. Maybe that sounds like I can’t wait those two togeth­er. Let’s move on.

Brad Giles 02:40

Very good. All right. So today we’re talk­ing about gross mar­gin. Oh, we How awe­some is gross mar­gin when it’s work­ing well, and how much of a pain in the butt is that when it’s not work­ing? Well, today, the ques­tion that we’re ask­ing is my gross mar­gin is drop­ping, what should I do?

Kevin Lawrence 02:59

Yeah, you should­n’t you need to do some­thing. And here the thing is, is you know we talk about often it’s it’s one of the most impor­tant num­bers in busi­ness because it indi­cates busi­ness health, and indi­cates the health of the front end. And it’d be able the abil­i­ty to sell to cus­tomers at pric­ing that is ide­al­ly, you know, pre­mi­um in some way, depend­ing on your busi­ness mod­el so that you’re get­ting the right pric­ing in the mar­ket, you’ve got a com­pet­i­tive advan­tage allows you to price well. And then also, you’ve got an oper­a­tional advan­tage that you’re able to buy or build inex­pen­sive­ly, which leaves a gap between the two. So it’s the mar­ry­ing of oper­a­tions and sales, it that gross mar­gin tells you that they’re both doing excep­tion­al or some­body could be doing an extra excep­tion­al job. But it tells you that that there’s a lot of good things that are hap­pen­ing at a macro lev­el before you zoom in. And the trend of this num­ber can real­ly guide us on what’s going on. We look at it all the time in busi­ness­es. There’s more to it than just that. But when it’s going well or when it’s not. It’s some­thing that deserves our atten­tion and worth dig­ging into to fig­ure it out. Yeah, and it can be fig­ured out.

Brad Giles 04:16

And it kind of deter­mines the effec­tive­ness of the strat­e­gy and the lead­er­ship team. Obvi­ous­ly the you know, there’s, it’s demon­stra­tive in one way of a lack of dis­ci­pline, dis­ci­pline, but very much. If your strat­e­gy is effec­tive, you should have a healthy gross margin.

Kevin Lawrence 04:38

Yeah, well, yes. The espe­cial­ly the front end com­pet­i­tive strat­e­gy on the sell­ing part of it. Yeah. But your oper­a­tions team could be hav­ing all kinds of prob­lems and mess­ing it up once the busi­ness comes in and out. So no mat­ter what it’s impor­tant, for exam­ple, a com­pa­ny that this is going back, Gosh, 15 years ago, a com­pa­ny that was in a com­mod­i­ty busi­ness. So that’s the way most peo­ple looked at it. And we were able to take that busi­ness from about 18% gross mar­gin to 28. And even at the point we had the whole team ral­lied around get­ting the gross mar­gin. And if we hit it, the whole team and their part­ners got to go to Mex­i­co for a cel­e­bra­tion, which we did. So I will nev­er for­get that one. But

Brad Giles 05:29

I mean, that’s awe­some. 18 to 28. That is remark­able. Remark­able. They

Kevin Lawrence 05:37

Yes. And to this day, when I talked to peo­ple in that indus­try, and I said, Yeah, we worked with one that did 28, they shake their head, like how. And as we went into it, what it became is that we had this one sales guy, inter­est­ing­ly, we were recruit­ing him for three years. So the CEO was recruit­ing him for three years. And he came in, he had a way to do all kinds of extra ser­vices out­side the core prod­uct was, we’ll call it com­mod­i­ty. Yeah. And he had all ani­mals and limb and no con­trol of pric­ing, because they were dis­trib­ut­ing a prod­uct, basi­cal­ly. But this guy had this mod­el where he had all kinds of addi­tion­al ser­vices, while we’re in there doing what you need, they would do all this oth­er stuff. And with great ser­vice, and the cus­tomer was thrilled some­body was get­ting it done. And was not con­cerned on the mar­gin on the stuff that was­n’t in the core com­mod­i­ty space. The accoun­tants could line up and the pur­chasers could line up pric­ing on the core com­mod­i­ty stuff, not the oth­er. Yeah. And it was so they tran­si­tion to the whole busi­ness. It was amaz­ing. Absolute­ly amazing.

Brad Giles 06:41

That yeah, that’s a an out­lier sto­ry. Because it’s such a huge dif­fer­ence. So con­grat­u­la­tions. I remem­ber what the

Kevin Lawrence 06:50

levers the what they did, yeah, the prin­ci­ples that they use to get there any­one can use to look for the high­er mar­gin pock­ets of things that they can make more mon­ey on, while serv­ing the cus­tomer and the cus­tomers thrilled.

Brad Giles 07:06

And it’s wor­thy of effort, no doubt, I remem­ber we there was a retail­er that we’re work­ing with their gross mar­gin, it used to be 48%, for a retail­er, is prob­a­bly aver­age, maybe medi­um to aver­age. And we got it up to 52% over suc­ces­sive years. And then we had a year­ly and a quar­ter­ly theme to dri­ve it from 52 to 54, which was a huge change, because broad­ly for them, that 2% of rev­enue fell straight to the bot­tom line. Yes. It’s remarkable.

Kevin Lawrence 07:43

We also had one with a retail­er where we did a quar­ter­ly theme. And it was I believe it was just one was the theme, just one. And it was a lux­u­ry goods orga­ni­za­tion. And, you know, a lot of high end depart­ment stores and high end shops. And the idea was and what the head of retail would say is, you know, if we can get the cus­tomer to buy one extra lip­stick, that incre­men­tal extra sale on a extra high mar­gin prod­uct, lip­stick had a very high mar­gin for them. It was it was dri­ving incre­men­tal sale of an incre­men­tal or of a project that had above aver­age mar­gin. And again, we had a whole theme go through the whole org whole orga­ni­za­tion think­ing about it. Obvi­ous­ly, it adds up quite well at the end.

Brad Giles 08:31

That reminds me of McDon­ald’s, maybe not so much today, but sev­er­al years ago the say­ing going around was that the ques­tion Would you like fries with that actu­al­ly was respon­si­ble for 100% of their prof­it. Basi­cal­ly, all of their prof­it at the p&l lev­el was com­ing because of that upsell in the trans­ac­tion? Rather than just Yes, I’d like a ham­burg­er or what­ev­er it might be. And that’s what you’re say­ing is look­ing for the upsell oppor­tu­ni­ties to increase the over­all gross mar­gin because real­ly chips fries pota­toes that are fried and I have a very good gross margin.

Kevin Lawrence 09:12

Yes and there’s two things that are hap­pen­ing they’re not only hope prob­a­bly improv­ing the over­all gross mar­gin per­cent­age because of the mix sell­ing more high­er mar­gin prod­ucts but to their increas­ing the total buck­et of gross mar­gin dol­lars with the extra sales so that that they’re called com­pound­ing while you’re just wait­ing you had that teed up Hey, that was all it is com­pound­ing is it’s it’s a dou­ble wham­my on the gross mar­gin, a high­er mar­gin prod­uct the­o­ret­i­cal­ly if the pota­toes indeed are and more mar­gin dol­lars. And yeah, there’s two levers that make a big, big dif­fer­ence. That’s why for exam­ple, when you go to like an ath­let­ic shoe stores, and when I was grow­ing up as a kid, they always had the bins of socks Yeah, right there by the till. And they always have those ceil­ing things you can spray on your shoes, which do they work? Or do they not? I don’t know. Yeah. But what I do know is they have big fat mar­gins. So not only do they have mas­sive gross mar­gin per­cent­ages, it’s incre­men­tal dol­lar. So those add on sale. So these are all things to look at. And that’s where things start to fall apart. I mean, in those com­pa­nies, you could nev­er leave it with­out them offer­ing you both of those things. And maybe it’s still the same way today, I

Brad Giles 10:28

don’t know, anoth­er quick way that retail­ers do what is called the snake. So as you approach the till to pay, there’s a wait­ing line. And that’s dec­o­rat­ed with all sorts of small­er inci­den­tals like per­haps chew­ing gum, or lol­lies or what­ev­er it might be that you might want to buy to increase the aver­age dol­lar sale. But also, these are often very high mar­gin products.

Kevin Lawrence 10:55

I saw a bril­liant one today I bought some tick­ets on Tick­et­mas­ter, my son and I are going on a trip and we bought tick­ets to a show. And as I’m doing the check­out this one no, it was a dif­fer­ent trans­ac­tion on it dur­ing the check­out for the tick­ets. It’s offer­ing me Oh, you’ve got, you’ve just earned a free blank from HelloFresh a free meal kit. To get it, you just earned a dis­count. So this is Tick­et­mas­ter. But they are now offer­ing me if I had four oth­er things, I had to click no to on the way out, because that each of those is worth more dol­lars to them. And this has noth­ing to do with the core prod­uct, which I thought was real­ly interesting.

Brad Giles 11:38

Well, it’s just a refer­ral fee, but that refer­ral fee is 100% Gross Margin

Kevin Lawrence 11:45

100% Because there’s no cost involved. Exact­ly. So there’s lots of dif­fer­ent exam­ples. Same thing when you book, you know, hotel rooms or flights, and then they offer you insur­ance and all these oth­er things, these, you know, those add on sales are a, a real­ly, real­ly big piece, you know, anoth­er com­pa­ny we worked with, and we also increased it fair­ly sub­stan­tial. I’m a big fan of gross mar­gin because again, it shows how smart and effec­tive the team is. Yeah. And you know, in this one, we took it and it was mid 20s. And we got it on aver­age just over 30. So say 25 to 31. In that range. I don’t have the exact num­bers here. But that is at least that, again, con­sid­ered a com­mod­i­ty type busi­ness. And we insure we got this, this con­sul­tant work­ing with us, just to help us on high­er mar­gin sales strate­gies, and find­ing big mar­gin pock­ets. And that there’s it’s the hunt, the hunt for where there’s more mar­gin, and we found a way to sell at a slight­ly high­er price. And then at some cas­es, we found a way to dra­mat­i­cal­ly low­er our input cost, like dra­mat­i­cal­ly. Yeah, and and it was it was it was awe­some. But the thing that made the dif­fer­ence, real­ly is that, you know, they and they have a lot of sales­peo­ple, you know, maybe at that time was 100. Now it’s a cou­ple 100. But a lot of sales­peo­ple, and we just were train­ing the sales­peo­ple, the sales­peo­ple are paid on mar­gin. So they have that, right. That’s a big piece. If if the pric­ing is flex­i­ble, but we just had this thing where they would put in the sale price and the cost, and it would give them red, yel­low, or green if the mar­gin was good. Like a lot of sales­peo­ple aren’t math­e­mati­cians. Yeah, their rela­tion­ship peo­ple, and they may or may not even under­stand mar­gin or how to cal­cu­late it. But we made this basic cal­cu­la­tor that they had to sub­mit with every deal. Yeah. And basi­cal­ly, it’s like, how would you just play with the num­bers until it’s green? Because if it’s not green, your boss can’t approve it or there has to be work. And so they could just they could take the price up because it was a lot of units. They could take the price up 75 cents, and they’d be green, and they can raise mar­gin a few points. Yeah, that was it was very sim­ple. So we edu­cat­ed the sales­peo­ple, we had the CFO edu­cat­ing them, we armed them with this tool. And we also cre­at­ed a theme around it and no prob­lem dri­ving it. And it moves around some­times depend­ing on what’s going on. It also moves around with a mix of busi­ness, but I will tell you, one of those pock­ets of prof­it that we found was so good. It dis­tort­ed the entire income state­ment. That means the mar­gin the gross mar­gin was so high again, that one those ones were what the 40s in the 40s in an indus­try that’s in the 20s Yeah, and mas­sive projects of mas­sive dol­lars. And it actu­al­ly cre­at­ed a prob­lem because that because it was so good because the income state­ment start­ed to look bet­ter than it was in the oth­er areas because it’s a story.

Brad Giles 14:46

Yeah, we I’ve done sim­i­lar things with a com­pa­ny ask­ing a team what was your gross mar­gin per­cent­age last year, either com­pa­ny or depart­ment depend­ing on the breakup of prod­ucts and stuff? It was, let’s say it was 52%. Last year, well, let’s set that as being the bot­tom of green. And then we’ll, for the sales team will go up 5% Is the green band­width, so 52 to 57, then any­thing above 57 is super green, then revert­ing 50 to minus 547 is Ember and any­thing below 47 is red. And that using that dis­ci­pline is bound to increase to the ques­tion of the episode, our gross mar­gin, if we can adhere to that dis­ci­pline, and I love what you do, we do the same thing, which is, if you’re going any­thing out­side of green, or super green, you need to get your man­ag­er to sign that off in writing,

Kevin Lawrence 15:43

build­ing dis­ci­pline and deal because at the end of the day, I’m a sales­per­son, and I’m gonna, I’m mak­ing up num­bers here, but I’m gonna close, you know, a $250,000 deal. And, and I’m gonna get, you know, 10 or 15, grand 10 grand a com­mis­sion, whether the mar­gins A plus A point or minus a point, unfor­tu­nate­ly, does­n’t affect me dra­mat­i­cal­ly in most comp mod­els, even if you’re paid on mar­gin. So I might get eight grand, instead of 10, grand or 12. Grand. And for a lot of peo­ple, they’ll take the aid if they can, because in their world, it could be sig­nif­i­cant. Yeah, where the com­pa­ny is los­ing a lot of mar­gin dol­lars. So, so build­ing those dis­ci­pline and rig­or into it is is key. I’ll give you an exam­ple. I got one com­pa­ny that, you know, we had two major prod­uct lines in a busi­ness. And the busi­ness was start­ed based on 140 years ago. And it was basi­cal­ly wood and met­al. And we could­n’t find a way to be com­pet­i­tive on the wood side of the busi­ness and the main and, and that’s where the busi­ness was found­ed. It was the heart and soul and the pas­sion. And we sold it off. And we ran with a met­al side, because we could now it took a few years, obvi­ous­ly, it was a big change. But there was no way that we could see that we could con­tin­ue to scale and get bet­ter mar­gins and based on who our com­peti­tors were, and the and the struc­ture of the indus­try. And maybe it was pos­si­ble, we could­n’t see it. So we phased that out, stuck to the met­al side, which had more growth, and at notably bet­ter mar­gins for us based on our dynam­ic. So does­n’t mean that it always works. Some­times you got to make a change. And that’s the hard part. But we least we got to know­ing the answer. We did this book called islands of prof­it islands of prof­it and a sea of red ink, which teach­es you to break your busi­ness down gran­u­lar­ly by gross mar­gin, and then allo­cate a pro­por­tion­al­ly over­head costs based on the amount of ener­gy or time and resource it con­sumes. So you’re real­ly look­ing at a more sophis­ti­cat­ed or a prof­itabil­i­ty per mod­el. And again, it was a lot of work. But with the insights we had, we knew we had to do it, it just was time to get the point of it being it some­times you’re not the per­son to make it work based on how an indus­try is struc­tured or what­ev­er’s going on. Well, a

Brad Giles 18:13

cou­ple of points. There’s a team that I’ve worked with, we need­ed to piv­ot the busi­ness, we went through this ques­tion. And basi­cal­ly, it was a b2c cus­tomer b2c indus­try. And it was fund­ed by the gov­ern­ment. And of course, gov­ern­ment decides to spend mon­ey else­where. And so they’re just dri­ving down and down and down all of the income that they’re get­ting. But the wages are con­tin­u­ing to go up. So we over a mul­ti year peri­od decid­ed to piv­ot to B to C. And the gross mar­gins were two and a half times high­er. Wow, per hour because it was ser­vice. It was just out­ra­geous. Yeah. And so the com­pelling case was there. But it was found­ed in that all of those things, I guess, two of the real­ly impor­tant points is that no one owns gross mar­gin per­cent­age, often in a com­pa­ny. Okay, so you might have a sales man­ag­er, for exam­ple, where a VP of Sales who is account­able for the total gross mar­gin dol­lars to bud­get if you’re doing well, but who is account­able for gross mar­gin per­cent­age, it’s it’s not that com­mon in small and medi­um busi­ness that some­one has actu­al­ly and so it kind of falls back to strate­gic days or wait­ing until we notice an ero­sion or some­thing like that. And so that can be this, this hap­pened actu­al­ly with a retail­er. The sec­ond point for them and this is the sec­ond point that I’m mak­ing, and you kind of allud­ed to this before is that the sales­peo­ple were com­pen­sat­ed on rev­enue, so sales­peo­ple were com­pen­sat­ed on rev­enue num­ber one on. And so the more rev­enue they sold, the more basi­cal­ly per­son­al comp they made. But also there’s nobody account­able or even own­ing or watch­ing gross mar­gin per­cent­age. And those two things togeth­er can cre­ate the sit­u­a­tion that we’re talk­ing about here, which is your gross mar­gin is drop­ping, what do I do?

Kevin Lawrence 20:20

Yeah, and it’s inter­est­ing, and you’re say­ing there, but I mean, obvi­ous­ly like, and the key point about own­er­ship or sales peo­ple’s comp, if sales­peo­ple can con­trol pric­ing and dis­count­ing, if they’re allowed to move the num­bers, it’s pret­ty impor­tant that they’re con­nect­ed to gross mar­gin on a comp. If the pric­ing is sol­id, and they can’t touch it, you can pay them on rev­enue, because they can’t influ­ence it. But there was a real­ly key point in what you were say­ing there on gross mar­gin, we often find, because the gross mar­gin is a com­bi­na­tion of a lot of vari­ables. So in a lot of com­pa­nies, we will make the sales­per­son account­able for sell­ing mar­gin, which is a the­o­ret­i­cal mar­gin, it’s what we believe will make based on our under­stand­ing of our cost base, so we’ll report sales mar­gin. And then on oper­a­tions, it’ll be pro­duc­tion mar­gin, if we’re mak­ing stuff. So we kind of split up kind of split it apart because of dif­fer­ent things, pieces of con­trol on what was the oth­er com­pa­ny we had, we had sales were both and even at anoth­er retail­er, we would the buy­ers, would we would be the buy the buy in mar­gin, what we bought it out. And we were also man­age them on the sell through mar­gin. So the buy­ing is what we pur­chased it. But if the buy­ers bought a lot of stuff that did­n’t sell them at the DAS dis­count lat­er, we also tagged them with that. Yeah, because if you bought and it did­n’t sell sure you bought it at 80% mar­gin con­grats. But in the end, we only got 42, because we had to prac­ti­cal­ly give it away. You know. So it’s it’s very, as com­pa­nies get big­ger, it gets com­plex. But let’s just go through a few of the key themes you’ve touched on, we made a list of a few things for peo­ple to think about. And we’ve talked touched on one of these sto­ries, but like one is line by line analy­sis over a long peri­od of time, I like to look back five years, yep. Because when you’re when some­thing’s going wrong, either mar­gin, I like to look a min­i­mum of five years of his­to­ry data. And what we want to look for is as a per­cent­age, by cus­tomer by prod­uct by region by Sales Team graphed with five years of data so we can see what’s going on and visu­al­ize the data.

Brad Giles 22:30

So this is the first thing to do this is absolutely,

Kevin Lawrence 22:33

you got to start What’s the truth? Oth­er­wise? It’s just an opin­ion. What are the facts? Yep? What are the for sure. And then also watch for any lit­tle pock­ets where peo­ple can hide, you know, dis­counts or stuff like that some­times, you know, one com­pa­ny that, you know, they can offer ship­ping. So we had to build the ship­ping into some­thing because sales­peo­ple con­trol that. So basi­cal­ly, under­stand­ing all the levers, under­stand­ing pric­ing, as we talked about, we talked about that in episode 148. About pric­ing, but pric­ing, dis­count­ing. Now how sales­peo­ple are paid, we talked about it and do your sales­peo­ple under­stand mar­gin a lot don’t. Because they just haven’t been trained on oper­a­tions costs. Look­ing at those. After the sales­peo­ple brought the busi­ness and look at all those costs as a per­cent­age of rev­enue. Some­times you got to look at the over­head they absorb too. Because you know anoth­er com­pa­ny I work with they have they gen­er­al­ly oper­ate in the 32% 34% mar­gin. But they have a prod­uct line that oper­ates at 12% mar­gin. But it’s high­ly prof­itable, because they don’t even touch it. It’s a paper trans­ac­tion. There’s no over­head real­ly, yeah, look at that. And then the final thing is the mix. Because as we talked about, if you’ve got prod­ucts you sell at 60% mar­gin and prod­ucts sell 20, the mix of what you’re sell­ing, you need to under­stand it, often the mix can com­plete­ly mess up the mar­gin, an exam­ple where ser­vices have high mar­gin and prod­ucts has low. Like in con­struc­tion, labor can be high­er mar­gin, prod­uct mate­r­i­al can be low­er when you get a dif­fer­ent mix. And the final thing is that just

Brad Giles 24:12

on that pre­vi­ous point that comes back to water­fall graphs, one of those sec­ond things, I think that we said there, so we want to ana­lyze what are all of our prod­ucts and ser­vices per gross mar­gin over mul­ti­ple peri­od of time. So you could go back three quar­ters or three years and you could say this was our most prof­itable cus­tomer or prod­uct or ser­vice, and all the way down from the most to the least and under­stand­ing, real­ly under­stand­ing what is going on there. And then what are the dri­vers behind that?

Kevin Lawrence 24:42

Exact­ly, and it helps you to see because basi­cal­ly you have to get under­neath and see what’s actu­al­ly going on. And final­ly in this account­ing, just dig in and spend some time with the account­ing team. I love work­ing with the account­ing teams. They always have a good sense of this. The good ones know they know what’s going on. They can get you the data. They’re actu­al­ly not biased about it because they don’t have a horse in the race. They did­n’t do the work. Yeah. Yeah. So the idea here is that there’s lots of oppor­tu­ni­ties, you just have to spend the time and dig in, the answers are there. And whether it’s oper­a­tions, or pric­ing, or the mar­kets that you’re chas­ing, there’s always ways to find and enhance it. But like a lot of things, if you leave it on its own idling for too long, it will degrade eas­i­ly. It eas­i­ly degrades with­out a lot of focus on it and strat­e­gy to help pump it up

Brad Giles 25:35

into a so my gross mar­gin is drop­ping, what should I do? You should take action, you should ana­lyze like that’s the that’s the quick and dirty, don’t let it keep going. Because it’s a very, very expen­sive thing to have hap­pen. So ana­lyze look through things look for, I guess we’ve been through it all, but look for all of the bits through sales, dis­count­ing oper­a­tions, and the mix and then take action and fire bul­lets before can­non­balls as we would always say, do small tests but take action. So there’s a cou­ple of episodes relat­ed to this episode 148, the pre­vi­ous episode to this one, we need to increase in pric­ing, but the sales team is resist­ing inter­est­ing chats there. And then quite a long time ago, Episode 21 Gross Mar­gin under­stand­ing the most impor­tant num­ber in your busi­ness two episodes of rel­e­vance there. Well, thanks for lis­ten­ing. This has been the growth whis­pers Pod­cast. I’m Bran­don, my co host with the Cana­di­an accent here is Kevin in Van­cou­ver, Cana­da. Of course, please be sure to check us out on youtube if you’re inter­est­ed in our smil­ing faces. And please don’t for­get to sub­scribe. Every time peo­ple sub­scribe and rate us we actu­al­ly see our stats rise so it means the world to us if you could rate the show. Give us a five star we would love that in your app of choice. And then of course you can find Kevin and his very inter­est­ing newslet­ter week­ly newslet­ter at Lawrence​and​co​.com and myself bread you can find at evo​lu​tion​part​ners​.com There are you with our newslet­ter. I hope you’ve enjoyed the episode. Hope you got some prac­ti­cal advice there and do have a good week. Look for­ward to chat­ting to you again next week. Take care