Month: July 2014

Case Study: IEC Supply – Pricing Process and the Specialty Distributor

Posted on Updated on

After considering a number of options, IEC Supply selected Strategic Pricing Associates based on what they considered to be one of the smoothest implementation processes on the market.  In just slightly over 90 days from signing the initial agreement, SPA came live with the IEC organization.  The following are excerpts from the IEC Supply case study.

casestudiesAnother myth exists around the pricing process

Over the years distributors have developed a mythology of their own.  Some believe technology is out of their price range.  Others feel process building a solid process around their business negates the creativity of their staff.   Another myth exists around the pricing process; where distributors conclude that pricing process is something that only works for those mega distributors selling commodity products.  Mike Zielinski of Arizona’s IEC Supply doesn’t buy into any of these commonly held beliefs.  Recently, we had the opportunity to speak directly with Mr. Zielinski, the president of IEC Supply.

“We don’t think like a small distributor.  Our investments in technology and systems puts us on an even playing field with anybody on the planet.”

Doing business across the state of Arizona, New Mexico and parts of Nevada, IEC Supply provides mission critical automation and electrical products to a wide variety of customers.  Compared to many of his competitors, Mike’s company is small.  But, as he puts it: “We don’t think like a small distributor.  Our investments in technology and systems puts us on an even playing field with anybody on the planet.  The only thing small about our world is our willingness to provide customized concierge quality service to our customers.”

IEC Supply utilizes the P21 ERP system coupled with a state of the art CRM system to drive business metrics.   “The products we sell are technical, I am technical (Zielinski is a degreed engineer), my people all devote a great deal of time and effort to staying up to speed on the cutting edge solutions available to our market and why shouldn’t we push this technology savvy into our business model?”, says Zielinski.

IEC Supply’s efforts have been well recognized by others.

In September, 20113, IEC Supply was the featured story for The Electrical Distributor (TED) Magazine.  In January 2014, it was announced that IEC Supply won second place in their division for business growth within the Affiliated Distributor organization.

One of the latest additions to this “scientific technology” bent comes in IEC Supply’s addition of the Strategic Pricing Associates pricing process.  IEC Supply has been “live” with Strategic Pricing Associates’ pricing process since August of 2013.  To Mike and his leadership team, the implementation of a scientifically-based pricing process was the logical step in giving his business the technological edge required to move forward.

IEC Supply has seen dramatic results.

According to Mr. Zielinski, the payback period for this piece of technology was less than two months.  Further, the ease of installation and implementation took a great deal of strain off of his administrative staff.  Per Zielinski, “We are a 20 employee company and we regularly push the limits of our staff.  Any kind of extra load on the IT department quickly spills over into other parts of the business.  The Strategic Pricing Associates program takes away much of the work required to get data from our business system to their pricing algorithms.  We basically assigned a trusted senior inside sales resource to identifying product and customer classes.  And overseeing the operation of the process.”

Advice for his fellow distributors

During our time together we asked Mike if he had any advice for his fellow distributors.  Here are a few of his comments.

“First, technology is your friend.  When I started this business some 25 years ago, technology was expensive, maybe outside the price range of a fledgling distributor.  Today, this is certainly not the case.  As a matter of fact, armed with the right systems, the advantage falls to the smaller distributor.  Accessing trends and analyzing data, gives the smaller organization the ability to act more nimbly than the big guys who need dozens of layers of approval to make a move.”

“I would encourage everyone to explore the options of a scientifically based pricing process.  With thousands of products and hundreds of customers buying these products, determining the right pricing level is nearly impossible.  When you don’t have a solid price on the system, it puts extra strain on your inside sales team.  Their role shifts from coming up with a price to finding the best way to serve the customer.  And, IEC Supply is about serving our customers.”

Click here to read the entire IEC Supply case study.

Click here to read more SPA case studies.

SPA Events

Click here for other SPA Seminar dates and locations and click here for upcoming SPA webcasts.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Inside SPA > Client Testimonials

Posted on

The following are a few examples of SPA’s client testimonials that showcase the powerful strategic advantage and fast ROI gained by implementing SPA’s strategic pricing tools and processes.

“SPA enables you to tighten up these variances and increase your margins. In the products we have added so far to the program, we have seen about a 2.5 percent margin increase year-over-year in our first year with SPA.”

– Jimmy Sobeck, VP of Finance & Administration | New South Construction Supply

 

“The results are as predicted…Strategic Pricing works! As long as you spend the time to analyze the data properly, there can be a fast payback.”

– Larry McMullin, Chief Financial Officer | Harry Cooper Supply

 

“Strategic Pricing provided the easiest ROI I’ve ever seen in my career. We tell other Prophet 21 customers, Strategic Pricing pays for the entire system investment!”

– Russ Frazee, COO | FCx Performance Inc.

 

“We now understand that total optimized pricing is not an event, but a lifestyle. And this price-optimizing lifestyle will bring more profi tability and allow us to serve our customers better, a winning combination. We are very pleased with the results of Strategic Pricing so far.”

– Dan Rice, CEO | Service Supply of Victoria

 

For us, Strategic Pricing was the most effective, systematic way to improve our margins.

– Joel Becker, President/CEO | TSC Distribution Group

 

Click here to read more testimonials.

Click here to read our customer case studies.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Event Recap: SPA Mastering Strategic Pricing in a New Economy Seminar in Chicago, IL June 6, 2014

Posted on

The following are highlights of an article we have compiled a few highlights and data points shared by distribution and manufacturing leaders as well as industry experts for those of you that were not able to attend this informative event.

The event focused on strategic topics of importance to the owners, CEOs, CFOs, and general managers of distribution and manufacturing companies. Experts addressed the topics essential to accelerating the customer value proposition, competitive positioning and market value of any distribution or manufacturing business. Their presentations addressed the strategic, analytical, process and cultural issues that are fundamental to maximizing shareholder value and on the high-level, strategic and structural issues that are easily neglected in the hustle and bustle of daily business demands.

Attendees learned best-practice strategies and tactics to:

  • Achieve faster growth and market-leading profitability
  • Develop stronger customer relationships
  • Maximize your company’s valuation
  • Drive real change in sales force culture
  • Break the cycle of undisciplined pricing
  • Build a sales process based on customer value
  • Quantify and Communicate Customer Value
  • Achieve pricing flexibility with discipline
  • Improve operational efficiency with reporting and analytics

Major themes covered at the event included:

  • Now is the time to focus on strategic fundamentals to set the stage for outperformance in the rebound
  • Inflation and pricing challenges are looming; those who don’t master pricing will experience a margin squeeze
  • There are significant capital markets opportunities to increase shareholder value today
  • Pricing excellence is a key wealth-maximizing capability
  • Analytics and the information system are key
  • Training drives execution
  • Sales culture and change management are the challenge
  • Prioritization, long-term commitment, and focus are the keys

One of the benefits of attending an SPA Seminar comes via expert analysis of the distribution business. The Chicago event featured an in depth presentation by Jason Kliewer, Managing Director of Robert W. Baird and Company. Each year Baird co-sponsors a series of distribution oriented surveys which provide a candid snapshot of the pulse of our industry. During his presentation Jason provided an overview of the results of the latest polling.

Distributors are more optimistic than last year

  • Industry leaders forecast 5% growth through 2014
  • The same group was forecasting only 3 percent growth in 2013

Industrial Distribution is working to improve their business model

  • New emphasis has been placed on traditional topics like Integrated Supply and other supply contracts.
  • Identifying opportunities to build fee-based service offerings.
  • Improved data quality and flow within the organizations weighs heavily on many of these distributors’ minds. One area being explored is the use of mobile “apps” to enable real time flow of data from a number of applications.

Expansion is driving much of the growth

  • A large majority of the distributors surveyed see geographic and product portfolio expansion as key driver.
  • Since the last recession, distributors have banked on selling more product to the same customers as profitable model.

Consolidation marches forward

  • Many companies searching for acquisition and merger partners.
  • Mr. Kliewer made the comment that publically traded distributors in this sector are seeing numbers which rival blue chip stocks (for instance Fastenal is currently trading at over 20 times earnings).

Change Management in the Sales Culture

Frank E. Hurtte Jr., President of River Heights Consulting, who has 28 years of distribution industry experience and a lifetime in sales and is a senior advisor to over 50 distribution companies, spoke on the topic of “Change Management in the Sales Culture”. He discussed how distributors have done a good job of improving their business models and have implemented key new processes in many areas.

“As an Industry we have done a credible job of adapting to the environment around us.”

However, he pointed out that the sales department is still an area that is ripe for improvement.

“The Sales Department – The Last Frontier, or… The Wild West?”

Some of his observations and questions for consideration follow:

  • Fear of customer alienation is still prevalent
  • The Sales force still has very little day to day management
  • Old axioms die hard…
    • “Leave them alone and let them sell”
    • “Our guys have 15 years of experience”
  • Does it make sense for salespeople to set prices?
  • Does it make sense for salespeople to determine what lines are promoted?
  • Does it make sense for salespeople to make decisions on customer investment?

“We need to put process into Sales”

SPA’s Dolores Bauders provided an overview of The SPA Pricing Cube which offers executive dashboards with intuitive visual indicators of performance as well as drill downs to actionable detailed data. She discussed how implementing the SPA Pricing Cube can help manufacturers and distributors improve their sales process by helping them:

  • Uncover missed opportunities and lost pricing dollars
  • Rank pricing performance of Sales Reps, Order Writers, Branches, Vendors and Product Categories
  • Understand and manage Pricing Methods Mix
  • Highlight trends as well as monitor and manage performance over time

Most manufacturing and distribution leaders are experts in their field.  They understand customer intimacy.  They appreciate the need to build strong Supply-partner relationships.  They manage the daily operation of their business and understand how immediate competition interacts with their own efforts.

What is often lacking is a detailed view of the industry as a whole.  Strategic Pricing Associates’ free seminars allow these leaders a wider focus, a bigger view into national and international pressures on their industry.  Now is the time to begin thinking about how your own expertise might expand by taking in one of these sessions. Further, the no cost sessions are focused on distribution and manufacturing leaders’ concerns and conducted in a way that encourages networking.

SPA Events

Click here for other SPA Seminar dates and locations and click here for upcoming SPA webcasts.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Inside SPA > An interview with Brad Mack – A distribution guy with a project bent

Posted on

Gain valuable pricing process insights from SPA’s Implementation Leader, Brad Mack, a distribution industry veteran who knows the business needs of a distributor. Brad has leveraged his project management and process building skillset to help hundreds of distribution businesses improve their pricing function.

Excerpts of the article follow.

Implementation Leader, Brad Mack

As his expertise grew Brad served as a regional consultant for Hughes Supply. He describes his role in this way, “I played Joe Friday around issues with inventory management, customer interface, training, evaluation of acquisition targets for support needs and tons of IT related interaction.”

Over the course of his time in distribution, he handled literally hundreds of projects both large and small. Those of us who have ever lived through an ERP system rollout, can only imagine the learning experience of starting up Epicor’s Eclipse at 500 separate branch locations. It was during these early experiences that Brad came to truly understand his affinity for distribution. Again quoting directly: “I loved the exposure to all facets of the business. Each department, each new function of the whole wholesale industry was fascinating to explore. I was expected to know a little about everything. And, during this time, I noticed the marked differences between the operational needs of big and small branch locations. I learned the stress of making system wide changes while keeping things moving forward with the customers.”

What kind of advice can you give a distributor getting ready for a pricing process implementation?

“First, the owner or top leadership needs to take an active stake in the project. I’m not implying they need to do the work, but they must send the message ‘this is important to me and I’ll be following the project’ on a regular basis. A few executives have told me, the pricing process is their hobby. Some have taken on a portion of the workload. But, no matter how you slice it, the leadership team can’t just make the decision and then walk away.

Secondly, it’s never too early to start building the culture. Leadership at the company needs to set a stage for change. They need to promote the idea that they totally support the pricing leader and have set aside the resources for long term success.”

What else can streamline the process?

“Distributors should look at cleaning up data in their system. This is especially true if they have made any recent acquisitions. Things like product files, customer data and vendor information are in a constant state of flux anyway. It’s a best practice to constantly review data, but it often finds itself low on the list of priorities.

I tell clients not to fret if their data isn’t perfect; it never is. But improving the overall quality of the data in your ERP system is still a great idea.”

Since you mentioned the position, who makes a good pricing leader?

“Good pricing leaders come from a whole lot of areas. So it is easier to say who doesn’t make a great price leader. The price leader is not an administrative or purely IT task. Whoever is selected must know the business. Driving change requires respect; so they need to be somebody the sales team respects. The person must be able to stand firm on decisions and occasionally push others to modify their selling style. A price process that can be easily over-ridden by salespeople afraid to sell on the distributor’s value proposition simply will not drive the best results.”

Anything else a potential SPA client should consider?

“If there is one thing a distributor should consider in their pricing process, it would be this. Pricing is not a onetime deal. Instead think of it as an ongoing, living and breathing thing. The more you exercise it, feed it, tweak it, the greater the results will be for the client. Most of clients will tell you, it’s well worth the effort. The typical distributor adds two points to their gross margin. A good many have publically stated, the SPA process is the best investment in distribution.”

Click here to read the complete article.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.

Learn How Strategic Pricing Tools Can Help You Increase Prices and Margins Without Losing Sales

Posted on Updated on

During this no cost 60-minute webcast a SPA client will share their experiences and advice, you will learn about the Strategic Pricing approach to increasing margins and the strategy that can lead to pricing excellence, and you will gain a wealth of practical knowledge!

Program Description

Register to attend our webcast Tuesday, July 15, 2014 at 2:00pm EST where a SPA client will share their journey to pricing excellence and how they are using science-based strategic pricing tools to increase margins without losing sales.

To support their efforts to maximize profits, they turned to SPA to implement a proven strategic pricing initiative founded on SPA’s powerful pricing analytics tools. During this 60-minute webcast, they will share their experiences and advice that will provide you with a wealth of practical knowledge!

Click here to read SPA Client Testimonials

SPA’s Dave Lienert will also discuss how our solutions, which leverage experience from working with hundreds of companies to drive 2-4 margin point gains on affected revenue with minimal customer pushback, can help your company.

Attendees will learn how to address the following all too common issues and opportunities for increasing profitability:

  • Customer relationships focused on product/service value, not price
  • Identifying and capturing available margin premiums
  • Identifying price-sensitive products and services
  • Improving sales reps’ confidence in prices
  • Stopping undisciplined discounting
  • Tracking metrics for sales force accountability
  • Improving pricing consistency and fairness

This webcast draws on SPA’s experience working with hundreds of companies to drive pricing gains of 2-4 margin points on affected revenue with minimal customer pushback.

Click here to Register

SPA Events

Click here for other SPA event dates and times. Sign in or click here to register on our website to view our library of past webinars which covers a variety of strategic pricing topics.

Follow SPA

To easily keep up with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.