Bruce Merrifield, President — Merrifield Consulting •profit analytics •distribution management best practices •Wholesale Distribution Industry •new opportunities for distribution industry •personnel development •leadership training •designing customer education •cost-to-serve math •cost-to-serve in distribution Wednesday, June 8, 2016—In this video interview, Randy MacLean and Bruce Merrifield discuss the cost-to-serve (CTS) math course that Bruce recently put together with iKlarity. This includes details about the course structure as well as its benefits, origin, and an explanation of why distribution companies like yours may find it useful. "The course consists of 50 separate 5-minute videos," Bruce explained. "Each video includes a quiz with some 'homework questions.' If the viewer can't answer the questions, they can always re-watch the video and that repetition helps them understand and internalize the information. You could further reinforce each video with some group discussions." "After the viewer goes through all the videos – whether it's the full 50 or as many as you feel that they need – then you have a little final exam which takes some of the questions from previous quizzes," Bruce continued. "Everybody would ideally take the exam as many times as needed to get 100 on the test. If they missed a question, they could go back to the relevant video." "What will be different about somebody once they finish the course?" Randy asked. "What will they have that they didn't have before?" "Most people have been raised in a world where we only look through the financial management lens," Bruce said. "That viewpoint is necessary for a lot of functions, but it doesn't show things like CTS." "Following only the financial viewpoint will lead your company to do a lot of dysfunctional things," Bruce added. "Sure, it might be okay as long as the competition is equally dysfunctional, but if you had the tools to do better, wouldn't you want to use them? Would you rather go to war using guns or bows & arrows?" "By using these principles, you can find ways to command a larger and more profitable share of your market," Bruce said. "It's also the kind of a tool that complements what you learn and get through Waypoint Analytics." "There are two things that distributors need to focus on when running their business," Randy added. "The first is making sure that you're generating enough gross profit to run your operations. Historically, distributors do a great job in this area." "The second thing is controlling the CTS and ensuring that it's always less than your gross profit so you're making money on every sale," Randy said. "Because most distributors don't put much thought into managing this second area so there's more room for improvement. Many companies that manage their CTS well are turning in a bottom line that's two to three times greater than that of the average distributor. However, this first requires mastering new skills and acquiring an ability to look at the business from a different perspective." "The genesis of this project is that I was talking with two WayPoint clients who understood the concepts and were absolutely hitting it out of the park," Bruce said. "One company went from $15,000 operating profit per employee to $75,000 operating profit per employee in 30 months and was even giving out some substantial gain-sharing bonuses in the process. In the second full year, everybody in the company – including warehouse workers and drivers – got a $6,600 bonus." "However, these clients had a problem," Bruce continued. "Although they knew the material really well and were able to get results in their business, they realized that some of their employees just weren't getting it. These employees either didn't understand how things were supposed to work or were just ignoring the new ideas." "One of the companies had to let go of a vice president because he couldn't wrap his head around the idea that not all sales are good sales," Bruce said. "Then you had a lot of front-line guys who wanted to take every call and treated all customers the same way instead of prioritizing the most important customers." "The clients wanted to find a way to get a pure, unadulterated message throughout their organizations," Bruce said. "A system where everybody learned the same material so they'd understand the benefits and act accordingly. This prompted me to partner with iKlarity to put together this course since, as a video series, it doesn't matter if you have 1 location or 50 locations because each location has access to the same material." "The course is broken up in a way that you can either teach your employees the basics or give them a comprehensive understanding," Bruce said. "And, since it's online, the course also has a very affordable and convenient delivery method." An understanding of CTS is central to obtaining benefits from the WayPoint systems and Bruce's new course outlines many of the principles beautifully. The course is a great way for distributors to raise the skill levels of their employees and get everybody in the organization focused on the things that are going to improve the company's overall profitability. For more information about Bruce Merrifield, visit: www.merrifieldact2.com |
The 7 Areas That Need Your Focus (brief)The 3rd of 3 lists defining the markers of Distribution companies outpacing their peers. Beyond Business IntelligenceRandy MacLean explains the differences in business intelligence systems, and how to know what you're getting with each kind. A Culture of Innovation Starts at the TopSteve Epner and Randy MacLean discuss topics from Steve's book. In this video: How to Innovate. 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. 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. 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. Protecting Your Core BusinessHow to identify and protect the accounts at the core of profits. 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. Discussing the Enterprise Account Selling Model (#2)A continuation of the discussion between Bruce Merrifield and Randy MacLean over Bruce's Enterprise Account Selling Model (part 2). Discussing the Enterprise Account Selling Model (#1)Bruce Merrifield and Randy MacLean discuss Bruce's Enterprise Account Selling Model, as presented 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. Increase Innovation with a Rule and a ToolBruce Merrifield discusses the Wheel of Learning and how this simple tool can catapult you forward with innovative thinking. 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. 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. It's Not Who You Think It IsRandy MacLean discusses key profitability metrics for QPM. 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. How Customer Segmentation Unlocks Hidden ProfitsBruce Merrifield of WayPoint Analytics teaches the importance of customer segmentation and the insights it can offer your distribution company. 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. 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? 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 |