Strategic Insights 31
MY NEW, PART-TIME JOB: GROWING SELECT DISTRIBUTORS’
For 34 years - this January -
I’ve been a - consultant, advisor and turnaround player - within independent -
distributor channels. I will keep doing so: half-time. The other half, I will
be Waypoint Analytics’ (http://waypointanalytics.info/wp2.asp) new “VP
of Client Results”.
I’ve consulted to Waypoint for
six years. From Line-Item, NET-Profit calculations, we have invented a growing, shed-full of
supply-chain-math tools. These tools are: designed for distributors; available
as a web service for a monthly fee; and known collectively as Line-Item, Profit
Analytics (LIPA) Management. If you focus on tweaks around your extremely, NET-profitable
and unprofitable - customers and SKUs - you can create big economic gains for
all stakeholder groups.
I’ve had an option - all
along - to buy stock in Waypoint, which I recently exercised. And, I have volunteered
to help every Waypoint client be a top 10% best-practice performer. (Newsflash:
going forward, any client can contact “Virtual Bruce” with questions for no
WHY THE BELL-SHAPED CURVE FOR CLIENT RESULTS?
Most Waypoint clients excel at
conventional, best practices. And, they crave additional competitive advantages.
But, new paradigms (like giving women the right to vote) are initially challenging
and obvious only in retrospect. Best, Waypoint gold-rushers get up to four
times better results than the average client and 6-8 times more than the bottom
10% who still get “OK” results.
There is nothing wrong with doing
a few, easy fixes to get a 300% ROI on the monthly fee. But, I believe
the bottom-10% managers all envisioned the full upside potential of LIPA insights
knew how to execute in non-threatening, baby-steps,
they’d go for all of currently still unseen gold too.
(And, so would many
non-Waypoint clients who have requested demos and attended Advance Profit
Innovation Conferences. You’re invited, BTW, to the next APIC on March 4-5 in
Phoenix. Check out the brochure at: http://waypointanalytics.com
NEW-PARADIGM, EDUCATIONAL OBJECTIVES
Best performer actions
inform my educational objectives:
Educate the top four managers of a distribution company – CEO, CFO, VP Sales, VP
exactly what LIPA Management is and
enables (in contrast to other types of canned “analytics”)
Four Levels of company transformation
possible with LIPA Management, then…
How to handle their own resistance to what
Net-Profitability, ranking reports reveal: losing (and embarrassing) customers; sales
territories; SKUs; suppliers; and marketing promotions.
How to then
educate/sell ALL other employees on how LIPA Management solutions will grow their
management can master A-D above, then their shared #1 priority will be to get Waypoint’s
service up quickly (best clients do it in 3 weeks or less) and get ALL employees
pursuing Waypoint-revealed and enabled opportunities.
If just one of the top four
managers doesn’t “get it”, then they can blunt an effective Waypoint roll out.
They and all other employees will raise many of the 39 (traditional belief
system based) objections listed in Chapter Five/Part One of my E-book posted on
the home page of my web site: http://merrifield.com/E%20Book%202013/Chapter%20Five.asp.
THE MOST COMMON OBJECTIONS OF “THE 39”
Some distributors ignore “LIPA
Management”, because “we already have analytics
software” (that isn't being fully used). Why learn about or buy more
“analytics” when the kitchen-sink of analytic “solutions” sits on the shelf? If
you haven’t done your own cost-to-process modeling to know the net profit or
loss for every line item event, then you don’t have the net-profit data that
LIPA Management is built upon. (Don’t panic. Waypoint staff does the modeling
for your on-going, continuous, editing refinement.)
Other distributors did (or
heard about) a customer profitability analysis and stopped. When some big,
“best” customers star as highly unprofitable
accounts, the fearful ‘logic” is:
Some sales rep
is getting big commissions on the account. “The Sales Force will never believe
in or want to be incented by the net-profit model and results.”
Cost-to-Serve model isn’t perfect. (So, nitpick it to death). No perfection, no
If we tell a
customer to buy differently, they will get angry and leave (along with best
If we lose any
sales activity, our payroll will stay the same with less to do. The lost GM$s
will immediately reduce profits and rebates.
Exhaustive explanations (with
links to video clip case studies) for these and other concerns are in my
E-book: Chapter 5, Part 3 (http://merrifield.com/E%20Book%202013/5_Answersto39concerns.asp)
MORE LIPA EDUCATIONAL SUPPORT MATERIALS
Want to learn more about the
LIPA Gold-Rush for distributors, go to www.merrifield.com. Click on the “Insights” tab. Click on the “exhibits”
tab and find LIPA material at #44, 56-64. Skim through the annotated index for
my 450+ Youtube video clips that support LIPA
Management. And, attend APIC on March
4-5 to hear my latest on LIPA Management Best Practices. Be “Sooner” than your