Problem: Most Distributors Can’t Do Needle-Moving Change
B2B Cloud Commerce will be shaking business models in most channels by 2021. But, many distributors can only fine tune their past. Why? Check the fuzz factor on these four vitals: vision; strategy; innovation metrics; and can-do culture.
A Vision That Engages All Employees (and Stakeholder Groups)
What would employees think if you told them that:
- We are going to seek to double the Gross Profit Dollars per employee.
- We’ll do it by working smarter (not harder). We will invent better, measurable service value and total buying economics for our best net-profit (potential) customers.
- Customer profitability highly correlates with average margin-dollars per order. So, we will creatively fix unprofitable, small-order customers (both big and small in sales) while winning more big-order business.
- The boost in margin-dollars per head will afford: higher total compensation for all, more profits to reinvest in growing inventory and receivables to support growing sales, and secure growth for everyone’s career at the company.
- Better retention and penetration of best customers will grow sales, which will please suppliers and earn bigger rebates. All stakeholder groups will win and be re-energized.
By fixing unprofitable customers, hands are freed to serve more profitable orders from most net-profitable customers. By hyper-focusing team efforts on increasing service value to only 10 accounts per location, you can out-compete competitors that rely on a solo rep to “do more”.
New Objectives Need New Innovation Metrics
With best Customer and SKU Profitability Analytics you can set net-profit improvement goals (and incentives) for key accounts, key customer niches, and sales territories. You can set targets for reducing the overall percentage of unprofitable line-items, orders by customer, etc.
Field research on key accounts (and within target niches) will define more, better-tuned service metrics. Improving these metrics will then retune your service systems and skills.
Don’t Forget to Upgrade Your Culture and Courage
If vision is your roadmap and strategy is your car, then culture is the engine. “We can’t do that (we might fail)” cultures eat vision, strategy, innovation and passion everyday, all day.
A “How Exactly To Do All of This” Document?
For a comprehensive, pull-no-punches document that will help to clarify your Four Fuzzies, request my “Core Renewal Roadmap” by emailing me at firstname.lastname@example.org
Tailor it to your company and start successful, big change.