Bruce Merrifield, President — Merrifield Consulting
•competitive strategy •distribution management best practices •leadership training •business model
Monday, April 03, 2017—A Two Step Strategy for Being Number One
In this video, Bruce Merrifield, Vice President of WayPoint Analytics, turns the tables on Waypoint President Randy MacLean, and asks Randy to strategize on how to beat the competition.
Bruce plays the role of an established distribution company that has been very successful for a long time and strives to please every customer. So how does Randy use analytics to win business away from Bruce and increase profits?
The first step is to know your company's whale curve. Every company has a whale curve, even those that don't know it. Randy knows the whale curve shows how profits are supported by super profitable customers on the left side, and how profits are drained at the other end by money-losing customers. In the middle are the customers who have no real effect on the bottom line.
The other bit of data that Randy knows is the cost structure for the customer. He knows this because he has already worked with and traded these customers before. But, now he understands the numbers.
Randy's plan is to first take Bruce's profit away, leaving him with low or no cash flow. The best way to do this is to poach two or three of Bruce's top customers. Because Bruce operates under the assumption that margin equals profit, all Randy has to do is come in with a margin that covers his cost-to-serve rate. He knows that Bruce has no idea how low he can go on margin, and he knows Bruce will never go too low because he thinks he is cutting into profit.
Randy knows that margin percentage has nothing to do with profit.
The second thing Randy can do is to allow some of his profit draining accounts to flow over to Bruce. Because Randy has already replaced the cash flow with one of Bruce's best accounts, he can afford to give up the losers.
What happens is that Bruce gets super busy with new accounts, thinking he is gaining all this new business, but there will be no margin dollars. If Bruce decides to take a hard look at the numbers, he may catch on. But, by then, it will be too late.
For more information about Bruce Merrifield, visit: www.merrifieldact2.com
Steve Epner and Randy MacLean discuss topics from Steve's book. In this video: How to Innovate.
The top business know not only how to innovate, but where to spot opportunities where innovation will bring the greatest results.
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.
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.
How to identify and protect the accounts at the core of profits.
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.
A continuation of the discussion between Bruce Merrifield and Randy MacLean over Bruce's Enterprise Account Selling Model (part 2).
Bruce Merrifield and Randy MacLean discuss Bruce's Enterprise Account Selling Model, as presented 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.
Customer whale curves are a great opportunity to view the overall picture of your customer profitability and apply appropriate sales models to each
Bruce Merrifield discusses the Wheel of Learning and how this simple tool can catapult you forward with innovative thinking.
An in-depth look at some historical limitations to sales compensation, and why those factors no longer apply with the availability of LIPA.
Randy MacLean discusses the value and utility of segmenting your customer accounts.
A fixation on gross margin – without looking at cost-to-serve (CTS) – has blinded countless distributors and limited their ability to achieve profitability.
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 MacLean discusses key profitability metrics for QPM.
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
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.
Randy MacLean introduces the core principles of QPM and illustrates how it's the most effective way to run a business.
Have you had trouble conveying the importance of CTS to your team? Learn how this course provides an affordable and convenient educational solution.
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