PRICING OPTIMIZATION FOR DISTRIBUTORS
Your company has a great sales and technical support team, solves customer problems and provides even better service than ever before. In spite of your investment in people and systems, margins have not improved and may have even slipped. Your distribution business needs a strong pricing foundation more than ever.
Tracking customer profitability and cost to serve must be built into an effective distributor pricing system. Our SMARTPricing strategic pricing analytics is not just a powerful tool; we also bring our experience and expertise with systems, finance, training, sales compensation and sales management. As a matter of fact, we wrote the book on strategic pricing for distributors - literally!Smart Pricing Objectives:
- 200+ “basis points” (2%) hidden gross margin
- 2% of sales generates ROI increase of 12-16 percentage points
- Price based on value to customer – true market value – not cost to distributor
- Build a better pricing infrastructure
- Highest & best use of precious sales resources
- Make order out of a highly complex, chaotic environment
- 3000 customers X 5000 SKUs = 15,000,000 combinations
- How much pricing responsibility is delegated to the sales team?
- Segment customers and products for pricing purposes
- Determine item sensitivity
- Design a business intelligence cube for your ERP system
The following documents and videos provide detailed strategy on how to use these analytics meet the Smart Pricing objectives...
- For Distributors, Strategic Pricing is Red Hot
- An Advanced Distribution Partners Whitepaper by Brent R. Grover
- The Big Boys Chase After Distrbutor Software Business
-Published in Industrial Suypply, Sept/Oct 2010 By Brent R. Grover
Brent Grover of Evergreen Consulting, LLC
presentation at ExxonMobil