Volume is one of the most seductive and intoxicating measures of business success. When a salesperson announces that he or she has just landed a big account, it's the equivalent of bagging the big beast on a safari. It's celebrated throughout the organization. Everyone notices. If you're a distributor and land the big account, your suppliers are thrilled because it helps them meet their volume quotas. If you're a manufacturer's rep, management breathes a sigh of relief as their capacity targets are met. You're a hero if you bag the big one.

Well, maybe.

What happens when the big one is a low-margin sale? What if your cost of serving this customer is unusually high? How about the transaction cost of serving this customer? How much of your selling time will be consumed following up on this sale? Volume is not the only measure of business success; it is simply one measure of success.

If your company is not set up as a strong logistics player, you may discover that the big one at a lower margin may overburden your systems, causing other customers to suffer. Oh, but the allure of the big one! It feels so good to say, “I got the biggest order we've ever had.”

Account value is only one-part volume. It is one-part cost of goods sold, one-part cost of serving, one-part product mix, one-part account potential, one-part customer loyalty, and one-part impact on the rest of your portfolio of customers. And yet, it is so delicious to make the big sale.

Customers know this. They understand the perceived value of volume to a supplier. They understand the implied promise of volume. They dangle it as the ultimate carrot. Just ask anyone who sells to Wal-Mart. That is a company that knows how to leverage volume in a negotiation. Or, how about the auto industry's Big Three enticements of volume promises—provided you let them whittle your margins to the bone.

Yes, volume is enticing. It's thrilling to make the big sale and bask in the glory of the bright lights. But if it's not profitable, you can't make it up in volume. It reminds me of a speaking opportunity years ago. The president of the company set the tone with the audience: “Ladies and gentlemen, as you know, things are tough in our industry. We are now selling at ninety-seven cents on the dollar. We lose three cents on every dollar we sell. That's the bad news. The good news is that sales are down this year, so we are not losing as much money as we could have.”

When you lose money on a sale, you don't make it up in volume.

Make better decisions. You don't take volume to the bank—you take profit, which may come from volume or be destroyed by it. The value of an account is determined by more than the quantity of what they purchase.