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.”
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