Bruce Merrifield, President — Merrifield Consulting
•competitive strategy •business model •business analytics •customer profitability analysis •Bruce Merrifield
Wednesday, December 13, 2017—Customer whale curves are a great opportunity to view the overall picture of your customer profitability and apply appropriate sales models to each.
The whale curve is built by taking the number one most profitable customer you have and placing those profits on the grid. Next, add the profit from the second, third and fourth most profitable customers. As you add customers by profitability, the curve rises and eventually gets to a peak, known as the peak internal profits. This is then followed by a long flat sloping curve that represents the small accounts that don't make or lose a lot of money. Then, as you add the decreasingly less profitable accounts there is a sharp plunge, known as the tail of the whale. Big money is being lost on these big accounts.
The whale curve shows you several valuable categories you should be focused on for growth. At the head of the whale are your profitable accounts. This is where you need to focus on penetration and offering these customers even more for more business.
The most important may be the long flat back of the whale. These are accounts where the margin dollars annual spend per year is not enough to support a traditional outside sales, face-to-face model. One option is to try a whole-tail model. This level falls between retail and wholesale; between customers helping themselves and a full-service wholesale model. This type of model can be profitable with fewer orders, the customer paying a little more and an overall decrease in cost to serve. This allows you to free up sales to focus on more profitable business.
The tail of the whale is another place to focus. Only being concerned about product and price misses the opportunity to increase profits by improving processes. To help yourself, and the customer, you need to find solutions that massively reduce both sides of the activity cost. Customers will be grateful when you uncover not only your hidden costs, but theirs.
Using the whale curve to understand your customer mix is a valuable tool for creating and using different models that will address the issues with different types of customers, all with the focus on increasing profitability.
For more information about Bruce Merrifield, visit: www.merrifieldact2.com
The 2nd of 3 lists defining the markers of Distribution companies outpacing their peers.
Bruce Merrifield and Randy MacLean discuss the handful of key customers in your business, and how to keep them happy and loyal.
Randy MacLean explains the differences in business intelligence systems, and how to know what you're getting with each kind.
In-house analytics initiatives are prone to delivering ineffective information or to outright failure. Here's why.
The top business know not only how to innovate, but where to spot opportunities where innovation will bring the greatest results.
See how implementing LIPA can give you the bandwidth to be more accommodating to your customers with analytics-based service excellence
Randy MacLean and Bruce Merrifield of WayPoint Analytics discuss different levels of cost analysis, and why deeper analytics can bring much greater benefits.
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.
Webinar: Quantum Sales Compensation - How to Create a powerful new kind of sales incentive plan
Discussion of how the most successful companies are adopting specialized sales functions, achieving superior results.
Discussion about a 9-step process aimed at transforming a transactional relationship with an account into a partnership.
Randy MacLean and Bruce Merrifield of WayPoint Analytics discuss profit value-based customer segmentation.
A discussion of the benefits of segmentation and how this approach can help distributors achieve far greater levels of profitability.
Top companies like Amazon can leverage big data to predict consumer buying habits. Bruce Merrifield discusses how you can do this too!
Most distributors have naturally occurring, high gross margin percentage accounts and high gross margin percentage (small dollar pick) SKUs.
Randy MacLean and Bruce Merrifield sit down for a talk about the issues and opportunities, tactics and strategies for increasing profit performance.
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.
Using the negotiation process to achieve CTS savings, allowing you to offer your customers lower prices while leaving the table with a larger profit.
Bruce Merrifield discusses the Wheel of Learning and how this simple tool can catapult you forward with innovative thinking.
Randy MacLean discusses the value and utility of segmenting your customer accounts.
Learn how this distributor was able to massively ramp up its profitability even as it lost many of its customers.
Learn why distributors can't simply rely on gross margin when determining whether a sale will add to the bottom line.
Randy MacLean talks about the emergence of a new sales strategy.
A discussion on how little extras can sometimes add up to a lot of infrastructure cost in wholesale distribution companies.
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
In this video, Bruce Merrifield turns the tables on Waypoint President Randy MacLean, and asks Randy to strategize on how to beat the competition.
Randy discusses the benefits of the extraordinarily valuable High Volume Account Report.
Bruce Merrifield of WayPoint Analytics teaches the importance of customer segmentation and the insights it can offer your distribution company.
It'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.
What is the value of the APIC conference for a business, and why does it stand out above other education programs?
Bruce Merrifield and Randy MacLean discuss profit strategies for wholesale distributors that will raise their cost-to-serve and profits.
Webinar: Quantum Sales Compensation Plan Part 2
Webinar: Quantum Sales Compensation: Designing Your Plan
Webinar: Quantum Sales Compensation for the Wholesale Distribution Industry: Launching Your Plan