37. Service Value Innovation Guidelines

Are you distributing commodities? Then, wrap them in the best – not “good’ – service. For fresh ideas on – defining, achieving and selling – truly best service value:

“BEST SERVICE” VARIES BY CUSTOMER: NICHE, SIZE AND SOPHISTICATION

“Good service” for all customers delivered in a standard way is a commodity. You will have no pricing or account-share power and a commodity-hell, weak pretax Return on Total Assets (ROTA).

But, to average over 20% ROTA like the top 5% of distributors, you must have varying service metrics for each customer niche and strata-size you target. Most-progressive customers also want “supply chain solutions”. Oblige them! Have the analytics and solutions in addition to your perfect, partner-able, basic service excellence.

STEPS TO BEST SERVICE PER CUSTOMER NICHE:

  1. Rank all customers by profitability.
  2. Sort top 50+ customers into niches. (One super-profitable customer can be a “niche”.)
  3. Investigate 5 or so customers per target niche to find Next-Level, unmet, service needs.
  4. Convert those needs into metrics that employees can measure and improve.
  5. Have everyone memorize the 5 most profitable and 5 highest, profit-potential, target accounts within a target niche.
  6. Teach them why and how-to’s for doing “heroic acts” and “service triages” to give the 10 accounts consistently, exceptional service.
  7. Team-sell key accounts to help reps do “audits” of how your products flow through the accounts. Find snags and fix them. Also note any best replenishment practices to share with other customers. Evolve into being able the expert that can tune any customer’s replenishment process to: lower both their total procurement costs and your service-activity costs while improving their uptime productivity.
  8. Motivate employees to achieve Service Excellence. Create a “line of sight” from their personal efforts to improving – Gross Margin Dollars per Full-Time-Equivalent Employees – (GM$s/FTEE). Profit dollars/FTEE will then, in turn, explode to provide gainsharing bonuses for all.

Best service induces customers to trust and partner you. Earn 100% share of their business. Keep the relationship “evergreen” by continuously improving the buy-sell, inter-business processes for mutual gains.  Their future growth will then grow you.

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