www.quantumprofitmanagement.com Quantum Profit Management
War Stories: Cherry Pickers

Bruce Merrifield, President — Merrifield Consulting

•WayPoint Analytics •sales practices •profit strategy •profit war stories •Randy MacLean •wholesale distribution •Bruce Merrifield •Merrifield Consulting •sales tactics •taking action with customers •money-losing customers

Rating: (please click to rate the video)

From time to time, we run into what my friend and colleague Bruce Merrifield considers to be "cherry pickers". I think everybody has them, where you have people that are not profitable, and when you look at what they're buying, the items are probably not popular or profitable either.

"To frame them as a general category," Bruce adds, "when we do our customer profitability ranking reports, we see some big names that we thought were good customers, prestigious customers, and they're losing money." One possible story is that it might be "a customer who is ordering roughly $20 of stuff every single business day of the year — so maybe let's just say there's a $10 margin. You've got a $100 transaction charge roughly, and so you're losing $90. Multiply that times 250, and you're losing twenty grand. Then, when we look at the SKUs, we see there are 250 different SKUs that this customer is ordering, and they're all D items. These aren't the staples; they've got none of that. I look at it and say, this guy's a cherry picker!"

So what exactly is a cherry picker? Bruce defines it as a customer who gives all of his business to one supplier, possibly a friend or another long-standing relationship, then whatever he can't buy from him, he'll go to the next guy and try to buy those items there. It goes down the ladder until you're his last or next to last stop because you're the only one who sells what he needs.

"So you have a unique marketing proposition," Bruce explains. "You have a product he needs tomorrow to keep people busy, to keep the customers satisfied, and you're the only guy in the area that can deliver it. And you're going to take care of him for a $20,000 loss a year. Is this fair?"

The easiest way to identify a cherry picker is to ask your customer about his top suppliers. If he identifies a lot of personal connections with those suppliers, it's unlikely that the arrangement will change any time soon. If you've had him on contract because he could have possibly turned him into a big account, it might be time to take him off contract and impose minimum orders along with freight shipping to turn the account profitable.

It's not risky or dangerous to do these things; it just takes a little bit of courage to get outside the box to turn things into a win-win situation. Learn how to do this by watching the video above.

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

Beyond Business Intelligence

Randy MacLean explains the differences in business intelligence systems, and how to know what you're getting with each kind.

Why In-House Analytics Fails

In-house analytics initiatives are prone to delivering ineffective information or to outright failure. Here's why.

2020 Q4 Brief - Exploiting / Optimizing the Recovery

2020 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 Sales

The top business know not only how to innovate, but where to spot opportunities where innovation will bring the greatest results.

LIPA: Prophet of Customer Needs

See how implementing LIPA can give you the bandwidth to be more accommodating to your customers with analytics-based service excellence

An Analytical Boost to Service Excellence

Bruce Merrifield and Randy MacLean discuss the handful of key customers in your business, and how to keep them happy and loyal.

Getting a Deeper Understanding of Costs

Randy MacLean and Bruce Merrifield of WayPoint Analytics discuss different levels of cost analysis, and why deeper analytics can bring much greater benefits.

Profit-Value Segmentation

Customer 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 Analysis

Companies 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 Force

Use 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 Specialization

Discussion of how the most successful companies are adopting specialized sales functions, achieving superior results.

Managing Product Line Profitability

Managing 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 Relationships

Discussion about a 9-step process aimed at transforming a transactional relationship with an account into a partnership.

Profit Value-Based Customer Segmentation

Randy MacLean and Bruce Merrifield of WayPoint Analytics discuss profit value-based customer segmentation.

The Advantages of Segmentation

A discussion of the benefits of segmentation and how this approach can help distributors achieve far greater levels of profitability.

Gross Margin Percent: A Poor Indicator of Profitability

Most distributors have naturally occurring, high gross margin percentage accounts and high gross margin percentage (small dollar pick) SKUs.

Protecting Your Core Business

How to identify and protect the accounts at the core of profits.

Triage Customers & Set Priorities to Increase Performance

Randy MacLean and Bruce Merrifield sit down for a talk about the issues and opportunities, tactics and strategies for increasing profit performance.

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 Smarter

Using 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 Curve

Customer whale curves are a great opportunity to view the overall picture of your customer profitability and apply appropriate sales models to each

Increase Innovation with a Rule and a Tool

Bruce 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 Time

This video by Bruce Merrifield and Randy MacLean describes why you can't rely solely on gross margin to determine profitability.

The Changing Face of Sales

An 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 Accounts

What to do with your top accounts.

Gross Margin Fixation

A fixation on gross margin – without looking at cost-to-serve (CTS) – has blinded countless distributors and limited their ability to achieve profitability.

A WayPoint Client and Whale Curve Success Story

Learn 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.

Why You Should Sweat the Small Deliveries

A discussion on how little extras can sometimes add up to a lot of infrastructure cost in wholesale distribution companies.

Why You Should Be Optimizing Inventory

Randy 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

Using WayPoint's High Volume Account Report to Increase Profit

Randy discusses the benefits of the extraordinarily valuable High Volume Account Report.

Prioritizing Your Customers

A 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 Profits

Bruce Merrifield of WayPoint Analytics teaches the importance of customer segmentation and the insights it can offer your distribution company.

Quantum Profit Management

Randy MacLean introduces the core principles of QPM and illustrates how it's the most effective way to run a business.

Getting Results with a Customer Audit

Getting Results with a Customer Audit

Making Money by Giving Away Product

Bruce 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