www.quantumprofitmanagement.com Quantum Profit Management
A Two Step Strategy for Being Number One in Distribution

Bruce Merrifield, President — Merrifield Consulting

•competitive strategy •distribution management best practices •leadership training •business model

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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

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The 2nd of 3 lists defining the markers of Distribution companies outpacing their peers.

A Culture of Innovation Starts at the Top

Steve Epner and Randy MacLean discuss topics from Steve's book. In this video: How to Innovate.

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.

Webinar: Profit-Based Sales Incentives (part 1)

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Sales Force Specialization

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

9 Steps to More Profitable Relationships

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

The Advantages of Segmentation

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

How to Turn Big Data Into Big Profits!

Top companies like Amazon can leverage big data to predict consumer buying habits. Bruce Merrifield discusses how you can do this too!

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.

Discussing the Enterprise Account Selling Model (#2)

A continuation of the discussion between Bruce Merrifield and Randy MacLean over Bruce's Enterprise Account Selling Model (part 2).

Discussing the Enterprise Account Selling Model (#1)

Bruce Merrifield and Randy MacLean discuss Bruce's Enterprise Account Selling Model, as presented 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.

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.

Maximizing Account Potential through Segmentation

Randy MacLean discusses the value and utility of segmenting your customer 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.

Changing Sales Strategy Using LIPA

Randy MacLean talks about the emergence of a new sales strategy.

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.

It's Not Who You Think It Is

Randy MacLean discusses key profitability metrics for QPM.

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.

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.

The Element of Pricing

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.

Quantum Profit Management

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

The Benefits of a Cost-to-Serve Math Program

Have you had trouble conveying the importance of CTS to your team? Learn how this course provides an affordable and convenient educational solution.

Why Come to APIC?

What is the value of the APIC conference for a business, and why does it stand out above other education programs?

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)

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Webinar: How to Create a Sales Compensation Plan (pt 3)

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Webinar: How to Create a Sales Compensation Plan (pt 4)

Webinar: Quantum Sales Compensation for the Wholesale Distribution Industry: Launching Your Plan