Category Archives: WayPoint Analytics

138. The Peter-Principle, Sales-Rep Solution(s)

The Peter Principle?

The book, “The Peter Principle”, was first published in ’69. It was a #1 non-fiction, best-seller for 20 weeks. The key concept: most everyone gets promoted until they reach their level of incompetence where they stay, bumble, and resist any real changes. (A humorous writing style helps the medicine go down.)    

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137. Amazon’s Channel-Model Innovation Challenge

LEVELS OF INNOVATION: INCREMENTAL, BUSINESS-MODEL, CHANNEL-MODEL

All businesses innovate. But, rearranging the deck furniture on the Titanic (an incremental innovation) is not as powerful as getting an iceberg-resistant ship or an ice-berg-free route.

Business-model innovation is when you rethink the system of how you organize your resources to create a breakthrough value for some target group of customers. You may also, simultaneously, eliminate wasteful or dying activities. Common phrasings: Weed to feed. Prune to grow. Downsize, Upgrade, Refocus and Revitalize. Do a “Blue Ocean Strategy”, etc.

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136. SELL WIN-WIN, LOWER PRICING (?)

PRICING EFFICIENCY ISN’T PRICING EFFECTIVENESS

Practice good-pricing hygiene. Don’t underprice SKUs or customers if they will continue to (happily) buy from you at higher prices. But, consider also the positive trade-off of lower prices in exchange for larger average order-size buying. What are your general buying and selling incentives for increasing order size?

CASE STUDY ON ORDER-SIZE ECONOMIES

For 2018, a $100MM contractor-supply distributor had roughly 4000 active accounts. More facts:   

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135. Fix Your CRaP Items and Their Root Causes

AMAZON’S WAR ON CRaP

Amazon’s analytics can identity SKUs on which they Can’t Realize a Profit” (CRaP). Even with their improving, world’s best fulfillment and last-mile delivery costs, they can’t cover costs on items lower than $15 per pick/order.

AMZ’s fixes to date?  

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134. The Small-Customer, Small-Order “Lollapalooza Effect”

Lollapalooza Effect: (A Charlie Munger term) When multiple cognitive biases reinforce one another within a group, irrational beliefs will take over.   

THE PROBLEM WITH SMALL CUSTOMERS WITH UNPROFITABLE, AVERAGE-ORDER SIZES

When distributors create a Cost-to-ServE (CTS) model to estimate and rank customers by net-profitability, there are typically two, customer-group shocks:

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133. Your Reply to the 2020 “Crisis of Capitalism”

FIRST-WORLD EMPLOYEES ARE RESTLESS

The “Yellow Vest” protests in Europe echo the “We are the 99%” (Occupy Wall Street movement) – back in August ’11. Both are symptoms of declining, discretionary income for the bottom 95%+ of households (in first world economies). Buying homes and having kids in the US is unaffordable for the average Millennial. And, if you have any promising, young employees, are they job shopping?   

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