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Common Mistakes to Avoid in a Profitability Overhaul | Modern Distribution Management

Claims vs. Reality

In examining pricing strategy, members of the sales team will often say a distributor is overpriced in the market — don’t buy that claim, said Real Results Marketing Managing Partner Jonathan Bein, Ph.D. His company has done years of customer research that shows pricing is not a top factor for clients. When asked to rank eight or nine attributes of a distributor, he has yet to see — in nearly 100 surveys — a customer state price as the most important metric.

“If price comes in fourth through about sixth, that’s where we expect it. If it comes out below that, price is really not an issue,” Bein said. “It’s powerful when we compare [those results with] what the salespeople say. … So, don’t believe what the salespeople say, necessarily. You have to get the data.”

A challenge for Profit Isle, said CEO John Wass, is when the profitability analytics company is working with C-suite executives who either aren’t ready to take action until they get increasingly precise data, and are therefore immobilized, or who direct their full attention to their money-losing customers and declare, “We’re going to solve that problem!” instead of seeking early wins. “They’re not getting the value that they could have gotten if they focused on their strengths,” Wass said.

He encouraged distributors to keep in mind that almost nothing works the first time exactly the way it’s envisioned. Trying to tackle the hardest, biggest problem first will create a negative feedback loop, Wass explained.

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Common Mistakes to Avoid in a Profitability Overhaul | 2019-04-22 | Modern Distribution Management.

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