Bruce Merrifield, President — Merrifield Consulting
•distribution management best practices •Distribution Personnel Training and Development •cost-to-serve math •cost-to-serve in distribution •line-item profit analytics in distribution
Wednesday, January 17, 2018—Randy MacLean, President of WayPoint Analytics, talks with Bruce Merrifield, President of Merrifield Consulting, about bottom-line math for determining business profit.
Merrifield Consulting has been giving companies great insights into their businesses and helping customers understand bottom-line math. This includes commonly cited figures such as 5% of the customers create 95% of the profit and that most accounts are profit losers.
Something new has to be done to take losing accounts to the next level. Executives typically don't know how to teach salespeople to look at accounts in a new light and are struggling with how to approach these accounts to change the nature of the game.
Why Distribution Companies Need Bottom-Line Math
Until now, activity numbers have trumped bottom-line math when it comes to business analytics and net profit calculation. With bottom-line math, companies can more easily recognize where the losers are and cease activities that were previously thought to be beneficial. With the new capabilities of analytics, companies can now hyper-focus on portions of the business that should have been considered all along: those that make the most money.
A new look at the customer base and reallocating resources, based on new data, can contribute to a big leap ahead of competitors. Once businesses take a look at new models, such as the cost-to-serve model, they can understand that activity does not always equal profit. In reality, some large-scale accounts, with large profits, actually have a higher cost-to-serve and lose money. This new data allows you to focus your sales team on changing the nature of the relationship.
Businesses must understand who their best customers truly are and bottom-line math can help them do it. More importantly, by understanding and rapidly adopting these new views of profit, they may just be able to get there before the competition.
For more information about Bruce Merrifield, visit: www.merrifieldact2.com
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