www.quantumprofitmanagement.com Quantum Profit Management
9 Steps to More Profitable Relationships

Bruce Merrifield, President — Merrifield Consulting

•competitive strategy •order fullfilment •distribution management best practices •profit training •big data •profit strategy •management strategies •new opportunities for distribution industry

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In this video interview, Randy MacLean and Bruce Merrifield discuss tactics with the potential to redefine your relationship with customers. This includes a 9-step process aimed at transforming a transactional relationship with an account into a partnership.

This 9-step process is targeted towards high gross profit, high velocity accounts.

"It's easy to say that a client needs to take their 5 best and 5 worst accounts to a new level," Bruce explained. "However, many clients are at a loss how to go about it. A while back, I wrote a 26 page guide which explains the process in great detail."

"This advice can be simplified into a core 9-step process," Bruce continued. "The first thing you need to do is qualify that the account is big enough. If you've done a 5-5-5 Report and looked at your big winners and losers, you've already qualified the accounts. The second step – which involves cultivating and penetrating the account – is also already done if you've gone through the 5-5-5 Report."

The next step involves doing a customer audit or walk-through of their organization. Some of our clients are hesitant to try this because they don't know how to begin the conversation.

"I have lots of verbiage in the 26 page document when it comes to things you can say," Bruce said. "The most important element is authenticity. You want to be clear about how you want to follow your product through their organization to find places where problems or delays may be costing both of your companies either time or money."

The goal is to reduce friction and errors by gaining a better understanding of their systems. This allows you to remove many of the frustrations that employees on both sides may be experiencing. Because you've never done this process before, you're virtually guaranteed to find room for improvement.

This is followed by an in-depth analysis where you'll use statistical purchasing math to identify empty activity; for example, your customer may be placing 2 or 3 orders a week for something that logistically could be performed in a single order. After this, you can come back with a proposal.

"In many cases, you'll identify opportunities to put in systems that improve the customer's processes," Bruce said. "This may come in the form of a new inventory management system that organizes items more efficiently and enables easier re-ordering. Maybe it's additional on-site storage solutions so you don't need to replenish a supply as often."

"Who's going to implement these solutions?" Bruce asked. "You can volunteer to handle it yourself. This can work out especially well because you can set things up exactly as you want them. You can quote the customer a negotiable fee for the service or, if they're an outstanding customer, you may even offer to do it for free."

The process doesn't end with putting the solution into place. Now you need to monitor to ensure that it's working and to make appropriate changes when needed.

"The final steps involve documentation," Bruce said. "This involves collecting data demonstrating improvements in performance as well as getting testimonials from your customers. You want people from various departments to discuss how these solutions have helped them and describe the ways that your company has done a great job."

"These testimonials and documents are aimed at more than just finding you new customers," Bruce continued. "At this point, you're selling a bottom-up sales chain. As people get promoted and replaced, the new managers might not see the value that your company is providing them. They could be lured by a competitor's promise to do the same thing and give them an extra 2% off."

"When that happens, you can simply show those new managers your documentation," Bruce said. "These testimonials will show that your solutions are making life easier for a lot of people at their company and the way that your company is integrated with theirs makes purchasing that much more efficient. All of this evidence may intimidate the new managers who might not understand exactly how much effort would be involved in a change."

The benefit of this system is that not only does it improve the way you do business, saving a lot of money for both companies, but it creates an incredible entry barrier for any competitor looking to steal the account.

When your systems are closely integrated, you're providing a solution that competitors can't hope to immediately match and, more importantly, would cause headaches for your customer's people. You'll often find your customer's employees going to bat for your company to avoid those kinds of inconveniences.

For more information about Bruce Merrifield, visit: www.merrifieldact2.com

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