Imagine the impact of two additional points of additional margin to your business. Since I got into the business back in the 70s, distributors have talked about adding just a single point. They held rah-rah employee meetings, made posters embarrassed with things like “The Power of One” and listened intently as experts extolled the virtues of Matrix Pricing. Nothing sustainable happened; they were largely unsuccessful.
Over the past couple of years, I have had the opportunity to study the margin results enjoyed by the clients of Strategic Pricing Associates. Being an engineer by training (and a bit of a computer geek), it was their scientific computer analysis of invoiced pricing that originally drew me to their company. However, after learning more and interviewing dozens of their clients for my own research in sales process, I would say I am struck with their process.
It’s a combination of analytics, documentation, metrics and coaching; precisely what I believe goes into a great process. Here’s a quick breakdown:
Analytics
Computer-based scientific analytics give distributors a better view of their situation than is humanly possible. The typical distributor has millions of pricing permutations – think 2,000 customers x 1,000 SKUs equals 2,000,000 unique pricing situations. It’s not humanly possible to manage this kind of data even using a really good spreadsheet.
Documentation
The SPA plan segments both customers and products. It spells out a plan for pricing agreements which have been abandoned or abused. It lays down documentation via reliable system prices that take the burden of decision off of inside sales people.
Metrics
SPA refers to these metrics as Ratios of Attainment. They provide the tools to measure how much of your business is selling at management set prices versus discounting. These numbers are available by customer, territory, branch and product lines. Remembering, that which is measured improves, the very act of setting measures drives results on its own accord.
Coaching
Not only does SPA’s process provide solid data for coaching their client’s employees, using experience garnered from over 350 distributor implementations SPA provides management level coaching to drive the greatest results.
Why am I sharing this? SPA will be holding a FREE Strategy Seminar in Chicago on September 19th. I have taken part in a half dozen of these sessions and I feel they provide value. I will be speaking to the group and taking part in some of the panel discussions.
If you would like to register or learn more, I suggest you click here of contact Sheri Morford at 216-455-1544. These things fill up fast.
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