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War Stories: Service Innovations

Bruce Merrifield, President — Merrifield Consulting

•competitive strategy •profit strategy •expert interview •profit war stories •management strategies •pricing strategies •Wholesale Distribution Industry •distribution industry trends •new opportunities for distribution industryA creative solution to a common problem can provide companies with a significant market advantage. Bruce Merrifield, my friend and partner, discovered an ingenious way of resolving a logistics issue which ultimately helped his client deliver a better service to its customers than the competition. Even better, the competitors never seemed to figure out what happened.

Bruce had walked into a turnabout situation where he was helping his client identify his greatest area of business potential. After examining fifty prominent customers, Bruce realized that twenty of them were a certain kind of contractor. This sector was identified as the client's most profitable core business. Bruce's next step was figuring how he could improve the service to this sector. He met with the CEO who made some phone introductions to five of the contractors whom Bruce then went to meet in-person.

Coming in as an outside consultant, Bruce recounts, "I could ask them questions like: Who are you? Why do you buy from these guys? Who else can you buy from? Are they any better or worse? What's good service?" However, it was by asking what the business has done to annoy them, cause them to lose customers, or cause delays that provided the most insights.

One of the contractors complained that he really wanted first thing in the morning on-time delivery, mentioning that the client had a 2 p.m. cut-off for next day delivery and he hadn't always received his product on time when calling a bit before then. Bruce immediately promised the man unconditional on-time delivery then asked the contractor for a preferred cut-off time. The contractor suggested 5 p.m. And, to Bruce's surprise, the other contractors he spoke to said the same thing.

When Bruce returned to the client and informed the warehouse of the new cut-off time, he was met with immediate protests. The biggest argument was, "But the UPS guy comes at 3:30; that's why we have a 2 p.m. cutoff." Bruce talked to the UPS guy and got him to agree to having the client be his last stop, by offering the man a permanent desk (along with a few amenities) at the warehouse to do his paperwork.

The results came almost immediately, Bruce remembers. "Instead of ordering three times during the day, everybody was calling with these huge orders at the end of the day, so we also were getting larger average order size, we're getting cumulative of all the needs for the day. The average order size went to 400% as a result." Capitalizing on that success, the client opened up warehouses near UPS centers. This allowed the client to offer major area contractors a service value that nobody else had, ultimately putting several long-time competitors out of business.

Bruce's story is a really good example of how you can creatively think around some of the issues, and basically build your service model into something that's unassailable by the competition.

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

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