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.