For 140 years fortunes have been made on Wall Street by exploiting insider information. While this tactic is illegal on Wall Street, there is a way to use information your competitors don’t have ethically and with enthusiastic front-line employee engagement. How?
Get line-item profit analytics to generate both customer and SKU/vendor profitability rankings. No competitor has your same internal rankings. Nor, do they have your underlying capabilities that have co-evolved with your history of capturing and keeping your profit winners.
With small, fine-tuning efforts at the extremes of your ranking reports, you can win big increases in profit gains. But, you can expect initial disbelief and resistance.
Flawed Beliefs and Perverse Incentives
Profit-ranking information contradicts traditional data-free beliefs and the underinformed, poor decisions of the past. Honchos don’t like to be embarrassed. Reps, who are just coasting along with incentives for maintaining existing margin-dollar levels (and giving away service costs), don’t want to rock any accounts with new win-win ideas. And, some reps won’t want team help with their most net-profitable or unprofitable accounts. But, what do they fear?
Sales leaders may not want to upset reps. Nor, do they want to stop excelling at commodity-supplier promotions. Who wants to learn, lead, and sell customer-centric, supply-chain cost solutions for the first time? Experts of past practices don’t like to look like beginners at new ventures.
Customer Profitability Gains are Prerequisites for Digital Innovation
The average distributor who puts both customer and SKU profitability insights to work:
- Doubles sales and increases profits per employee by 5—10 times
- Gets all employees engaged, even those overpaid coasters, who will make more too. Making “Service Excellence” happen for the right, the best, and specific customers and niches is a compelling vision!
- Reduces the number of losing customers from over 50% to less than 5%
- Provides the free cashflow, innovation momentum, and courage needed to excel at digital innovations
What are Digital Innovations?
Having a better website is only one milestone on the way to becoming effective within digital cloud ecosystems. By 2021, one hundred percent of product information, availability, delivery, and pricing from every seller will be online and include multimedia.
You can’t fund digital innovations without first solving all the profit-leeching customers and SKU picks and orders within your daily activity. In addition, you must move towards doing more for and with your best customers and niches.
If you have questions about what steps to take, request my “Core Renewal Roadmap” by email: bruce@merrifield.com
Feel free to critique and discuss it. Then, be in touch as needed.