Performance issues may occur for the following reasons:
- Poor margin control
- Poor product quality
- Poor service quality
- Misaligned compensation schemes for the sales force
- Inability to qualify sales prospects
- Inability to determine the lifetime value of a customer
To improve profitability requires a systematic analysis of gross margins and expense spending levels and a review of budgeted vs. actual performance. This analysis may be at the product, division or company level in order to unlock the key to better profitability. New budgeting systems may also need to be designed or staff may require further training in the preparation and use of budgets.