Bruce Merrifield, President — Merrifield Consulting •competitive strategy •WayPoint Analytics •whale curves •market segmentation •big data •product Line •profit strategy •Wholesale Distribution Industry •new opportunities for distribution industry •business math for distribution •wholesale distribution basic math •business model •segmentation Wednesday, January 25, 2017—What do your best accounts have in common? In this video interview, Bruce Merrifield and Randy MacLean discuss the importance of customer segmentation and the insights it can offer your company. Customer segmentation is a valuable management tactic. By grouping together similar customers, segmentation allows you to discover general insights shared by that group so you can develop programs and offerings geared to groups rather than individual companies. It's an important piece when shifting to a more customer-centric approach. "Most distributors grew up being very product-centric," Bruce explained. "The goal of the old days was to get an exclusive franchise so the manufacturer would protect us and we would protect them." "Nowadays manufacturers sell to everybody which puts more power in the hands of the consumer," Bruce said. "As a result, distributors need to adopt a much more customer-centric approach. One of your goals is to find ways to get more business from your best customers." "By following this approach, sales goes from being the engine to the caboose," Bruce explained. "You're growing your sales by capturing a larger share of your best accounts. It's all about looking at the customers you have and identifying additional opportunities for profits." In the video, Bruce presents a case where a WayPoint client with over 4,000 active accounts used a whale curve to identify their most profitable customers. The customers in their most profitable segment were very high volume accounts where the distributor believed that the activity was either break-even or incremental profit given the relatively low profit margins. However, the order volume from these accounts was large enough that it completely overcame the cost-to-serve and a large amount of the distributor's operating profit came from these 150 accounts. The client called on several of these customers and, as a result of their audit, they discovered that the accounts were ordering a lot of other things that they carried. The client then helped some of those customers with their reordering systems to streamline the process and picked up a substantial amount of new business. They were also able to use the information they learned about these customers to pick up 7 more accounts just like them and have doubled the profitability from this niche. Meanwhile, the client realized that the customers they had assumed were their best – small, self-employed mom & pop companies with a very high margin – were actually in their worst segment. They then worked to reform this part of the business. Customer segmentation is an incredible tactic when it comes to focusing your company's efforts. The whale curve is great for identifying your most profitable and unprofitable accounts while segmentation helps you figure out how to make them more profitable. For more information about Bruce Merrifield, visit: www.merrifieldact2.com |
Measuring & Managing Fleet CostsSophisticated New Delivery Costing Drives Higher Profits The 6 Attributes of Super-Profit CompaniesThe 2nd of 3 lists defining the markers of Distribution companies outpacing their peers. An Analytical Boost to Service ExcellenceBruce Merrifield and Randy MacLean discuss the handful of key customers in your business, and how to keep them happy and loyal. Beyond Business IntelligenceRandy MacLean explains the differences in business intelligence systems, and how to know what you're getting with each kind. Why In-House Analytics FailsIn-house analytics initiatives are prone to delivering ineffective information or to outright failure. Here's why. 2020 Q4 Brief - Exploiting / Optimizing the Recovery2020 Q4 is the time companies can take great leaps in market position, actively shaping their competitive landscape for years to come. Staying Effective in the Changing World of SalesThe top business know not only how to innovate, but where to spot opportunities where innovation will bring the greatest results. LIPA: Prophet of Customer NeedsSee how implementing LIPA can give you the bandwidth to be more accommodating to your customers with analytics-based service excellence Getting a Deeper Understanding of CostsRandy MacLean and Bruce Merrifield of WayPoint Analytics discuss different levels of cost analysis, and why deeper analytics can bring much greater benefits. Profit-Value SegmentationCustomer triage is key to profits in Distribution. Randy MacLean share the key elements of costing required to help you assign the right service level. Optimizing Salesforce Pay Through Deep Data AnalysisCompanies are developing more and more sophisticated approaches to sales compensation and here Bruce Merrifield and Randy MacLean examine the trends. Webinar: Profit-Based Sales Incentives (part 1)Webinar: Quantum Sales Compensation - How to Create a powerful new kind of sales incentive plan Using Profit Analytics to Manage Your Sales ForceUse profit analytics to help drive radical profit gains by balancing volume, margin and service costs for every account, doubling and tripling territory profits Sales Force SpecializationDiscussion of how the most successful companies are adopting specialized sales functions, achieving superior results. How Distributors Should Rethink Their 2017 Sales Growth PlansWaypoint Analytics uses line item profit analytics to dig deep into the numbers, and Waypoint users learn both bad news and good news about their customers. Managing Product Line ProfitabilityManaging Product Line Profits shows how operations can have a significant impact on net profit and examines Peak Internal Profit, accumulated profit and more 9 Steps to More Profitable RelationshipsDiscussion about a 9-step process aimed at transforming a transactional relationship with an account into a partnership. Profit Value-Based Customer SegmentationRandy MacLean and Bruce Merrifield of WayPoint Analytics discuss profit value-based customer segmentation. Gross Margin Percent: A Poor Indicator of ProfitabilityMany naturally occurring, high gross margin percentage accounts and high gross margin percentage SKUs are operating profit losers. The Advantages of SegmentationA discussion of the benefits of segmentation and how this approach can help distributors achieve far greater levels of profitability. How to Turn Big Data Into Big Profits!Top companies like Amazon can leverage big data to predict consumer buying habits. Bruce Merrifield discusses how you can do this too! Gross Margin Percent: A Poor Indicator of ProfitabilityMost distributors have naturally occurring, high gross margin percentage accounts and high gross margin percentage (small dollar pick) SKUs. Triage Customers & Set Priorities to Increase PerformanceRandy MacLean and Bruce Merrifield sit down for a talk about the issues and opportunities, tactics and strategies for increasing profit performance. Increase Profits: Rank Customers and Act AccordinglyHere is a case study in which the lowest gross margin percentage niche was the most profitable and the highest gross margin percentage was the loser. Discussing the Enterprise Account Selling Model (#3)Continuance of the Enterprise Account Selling Model video series. Refers to a preceding video. Drawn from Bruce's presentation at APIC on March 1, 2016. Getting Your Salespeople to Negotiate SmarterUsing the negotiation process to achieve CTS savings, allowing you to offer your customers lower prices while leaving the table with a larger profit. Looking at a Customer Whale CurveCustomer whale curves are a great opportunity to view the overall picture of your customer profitability and apply appropriate sales models to each Cost-to-Serve Math: Why Gross Margin May Fool You Every TimeThis video by Bruce Merrifield and Randy MacLean describes why you can't rely solely on gross margin to determine profitability. The Changing Face of SalesAn in-depth look at some historical limitations to sales compensation, and why those factors no longer apply with the availability of LIPA. Maximizing Account Potential through SegmentationRandy MacLean discusses the value and utility of segmenting your customer accounts. Working on Your Best AccountsWhat to do with your top accounts. Gross Margin FixationA fixation on gross margin – without looking at cost-to-serve (CTS) – has blinded countless distributors and limited their ability to achieve profitability. Amazon Tactics: Know Your SKU Profit Winners and LosersSee why your most profitable 200+ items are typically popular commodities with lots of picks for lots of customers with a high average sales dollar per pick. A WayPoint Client and Whale Curve Success StoryLearn how this distributor was able to massively ramp up its profitability even as it lost many of its customers. Cost Structures: What Makes for a Good Sale?Learn why distributors can't simply rely on gross margin when determining whether a sale will add to the bottom line. Changing Sales Strategy Using LIPARandy MacLean talks about the emergence of a new sales strategy. Why You Should Sweat the Small DeliveriesA discussion on how little extras can sometimes add up to a lot of infrastructure cost in wholesale distribution companies. Increase Innovation with a Rule and a ToolLearn how to boost your company innovation IQ by adopting the Anti-Nitpick Rule and the Wheel of Learning Tool. Why You Should Be Optimizing InventoryRandy and Bruce explain why it's important to optimize inventory in the same way you optimize personnel and other resources toward the best profit opportunities A Two Step Strategy for Being Number One in DistributionIn this video, Bruce Merrifield turns the tables on Waypoint President Randy MacLean, and asks Randy to strategize on how to beat the competition. Using WayPoint's High Volume Account Report to Increase ProfitRandy discusses the benefits of the extraordinarily valuable High Volume Account Report. Prioritizing Your CustomersA discussion of the perils of a cookie cutter approach when it comes to sales and service in the wholesale distribution industry. The Element of PricingIt's not necessary to compete with AmazonSupply on pricing when you've got your ordering and delivery systems, fill rates and customer service at a high level. Quantum Profit ManagementRandy MacLean introduces the core principles of QPM and illustrates how it's the most effective way to run a business. The Benefits of a Cost-to-Serve Math ProgramHave you had trouble conveying the importance of CTS to your team? Learn how this course provides an affordable and convenient educational solution. Why Come to APIC?What is the value of the APIC conference for a business, and why does it stand out above other education programs? Getting Results with a Customer AuditGetting Results with a Customer Audit Making Money by Giving Away ProductBruce Merrifield and Randy MacLean discuss profit strategies for wholesale distributors that will raise their cost-to-serve and profits. Webinar: How to Create a Sales Compensation Plan (pt 2)Webinar: Quantum Sales Compensation Plan Part 2 Webinar: How to Create a Sales Compensation Plan (pt 3)Webinar: Quantum Sales Compensation: Designing Your Plan Webinar: How to Create a Sales Compensation Plan (pt 4)Webinar: Quantum Sales Compensation for the Wholesale Distribution Industry: Launching Your Plan |