93. Amazon (AMZ) Backcasting Strategies

Does your company plan to sell – physical or digital – goods to AMZ Prime members in 2020 and beyond? Then, backcast about the ideal customer shopping journey that AMZ will be dictating. And, start changing now.

WHAT’S BACKCASTING?

It’s visionary planning:

  1. Start with an ideal vision of what customers might want in 2020+.
  2. With that end in mind move backwards from the vision to the present.
  3. Then ask: “What do we do today – step by step – to move towards the vision”.
  4. “Back” contrasts with “fore”- casting which takes our past and extends it into the future. Backcasting will move you towards the future you will need.
  5. Talk in the future perfect tense. “By 2020, AMZ will have achieved this next-level shopping experience. And, we will have accomplished…” (What: to stay vital?)
  6. For backcasting slides search the term at Google Images.

Continue reading 93. Amazon (AMZ) Backcasting Strategies

92. Tight Labor Market Challenges? Here Are Solutions!

A February 2017 survey by Vistage Worldwide found that 67% of small business owners report a shortage of skilled workers. To try and bridge the gap, 87% have increased recruiting and 60% have boosted wages.

The answers beg more questions

But, what company doesn’t worry about skilled worker shortages, recruiting, and wages? Continue reading 92. Tight Labor Market Challenges? Here Are Solutions!

91. Your People Bets Are Only as Good as Your Beliefs

Imagine a distributor that has 10 outside Reps making 4.5 calls per day at an all-in cost per call exceeding $100. They must believe that the costs of these rep calls are worth the benefits. So, what cluster of beliefs guides those daily bets that add up to over $4500?

What beliefs lie behind your rep call cost bets?

Here are two belief clusters that serve as poles on a continuum. Where do your beliefs fall?

We’re supply-chain value creators

  1. All our reps are certifiably excellent at knowing which are the highest net-profit potential accounts
  2. All our reps plan and proactively pitch (with team help) the best, win-win solutions to these accounts that deliver a one-stop shop array of SKUs throughout a customer’s business and are executed with perfect, basic service metrics tuned to the customer’s needs
  3. These solutions lower the total procurement cost of the customer’s replenishment process, while boosting their uptime productivity using our goods and lowering our cost-to-serve expense as a percent of sales
  4. We also take care of all (new) product knowledge needs customers may have
  5. Our goal is to secure a bigger, win-win share of spend, if not a 100% partnership
  6. When we partner with the best growing customers, they grow us
  7. Our sales (and rebates) grow faster than industry averages due to customer-centric, service-value innovations for replenishment of commodities (which now comprise 90% of our sales)

We maximize “relationship value” to get economies of sales

  1. Our “good” reps make just-in-case, regular calls to befriend customers and react to their needs (often economic concession demands)
  2. More reps secure more active accounts
  3. Our goals are to push products to more accounts to grow sales, margin dollars and rebates.
  4. With all operational costs (seemingly) fixed in the moment, incremental GP-dollars will flow increasingly to the bottom line. These profits will hopefully grow faster than sales. (But, they haven’t!)

Relationship beliefs stopped working long ago

Financial survey data shows years of low returns for 90% of distributor participants. Isn’t it time to update your beliefs and analytics to improve your odds for better returns on your rep-call bets?

Conclusions

Business is like poker. You can’t have perfect information or consistent good luck. The winners are statistically a few percent better at deciding when to fold or hold; and at winning the hands they play.

Focus your best people-talent bets on creating more value for your biggest net-profit growth potential customers. Customer/SKU profitability analytics will upgrade your beliefs and improve your betting odds.

How? Contact me for a free, desktop session.

90. Pink Kit Kats v. Niche Domination

On January 18, 2018, after 10 years of development, Nestlé rolled out Ruby chocolate KitKats in Korea and Japan, just in time for Valentine’s day. The pink KitKat, made from the Ruby cocoa bean, will make premium a line that has hundreds of flavors, including green tea and strawberry.

Asian distributors will race to be the first to market with the pink KitKat, but will greater consumption of the KitKat line result? What sustainable edge and profits will distributors get from Nestlé’s promotional bribes and intensive distribution policy?

In 2018, how many U.S. distributors, across channels, will be also racing to market with new micro-niche products within non-exclusive lines? And, for what sustainable gains? Continue reading 90. Pink Kit Kats v. Niche Domination

89. Get an Outrageous ROI from Analytics

Most distributors have analytics software, but few get needle-moving results. So, what’s missing?

A case study’s best practices

A recent Harvard Business Review blog reported on a company that took their analytics seriously. Here’s what they did:

  • Created a separate analytics business unit that reported to the C-suite
  • Staffed the new business unit with young, ambitious people from outside the industry
  • Charged the team with achieving at least a 10X ROI for the unit’s budget cost
  • Targeted customer-centric results for the operating companies
  • Trained the operating companies to take over and improve upon the new initiatives
  • Incented both the analytics and operating folks with the same profit increases

The first year the new unit hit 46X their budget. Now, with all the operating companies begging for the no-charge analytics help, the unit hit 106X in year two and 200X in year three. Continue reading 89. Get an Outrageous ROI from Analytics

88. Amazon Promotes Long-Tail Spending Cost Reduction: You Can Beat Them

According to an Amazon Business (AMZ-BIZ) funded study, reported in the December 2017 issue of Spend Matters magazine, procurement pros increasingly want to reduce long-tail spending costs.

The big-spend items have been automated and integrated, but the pesky bottom 35% of items eat 1% of the spend dollars, take over 50% of purchasing’s time, and are a pain for everyone to easily buy. Corporate citizens want Amazon’s B2C shopping experience in their B2B world, but purchasing wants controls. So, AMZ-BIZ continues to invent cloud tools for purchasing control and analytics and continues to win sales.   Continue reading 88. Amazon Promotes Long-Tail Spending Cost Reduction: You Can Beat Them