Month: June 2015

Webcast: Improving Margins Through a More Strategic Approach to Pricing

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During this 60-minute webcast SPA client, Parrish Hare Electrical Supply, will share their experiences and advice. You will gain a wealth of practical knowledge on how improve margins through a more strategic approach to pricing!

Program Description

Register to attend our webcast July 15, 2015 that starts at 2:00 PM EST where Wes Butler, Chief Operating Officer at Parrish Hare Electrical Supply, will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to improve margins through a more strategic approach to pricing.

To implement a solution that enhanced profitability, developed pricing discipline, and removed emotion from the pricing function, 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 including their fast ROI and lessons learned!

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

Other 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.

Inside SPA > Client Testimonials

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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 Clients include over 200 manufacturing companies including Parker Hannifin, Rockwell, GEExxon Mobil, Caterpillar as well as over 400 distributors including Harry Cooper Supply Company, Industrial Distribution Group, AH Harris, and ThermoFisher Scientific.

The following are just a few of the many testimonials our clients have been willing to share. We how they inspire you to explore the power of strategic pricing.

Select Client Testimonials

“Strategic Pricing is now a way of life at our company. We have embraced SPA’s principles and strategies and the financial impact will be everlasting.”

     – Equipment Manufacturer

“A big benefit we have received from Strategic Pricing is having a strategy for our pricing. It was difficult to say exactly how we decided on pricing for our customers before Strategic Pricing. Today we are three margin points ahead of last year.”

     – Pluming Supply Distributor 

“As an Industrial Distributor with a record of fifty-five consecutive profitable years, we thought we knew both how to operate a business and price products. As the SPA Pricing Program was implemented, we moved from being skeptics to believers as we saw a 2% overall gain in gross margin before the first year, and after three years margin growth continues!”

     – Industrial Distributor

“We dabbled in strategic pricing on our own but never got the results that we needed until we hooked up with SPA. The greatest benefit we have seen is the margin enhancements. We started the SPA program in the summer of 2006. Shortly after that, we suffered very difficult market conditions, however, because of the SPA program, we had our best year ever.”

     – Electrical Equipment Manufacturer

“I was the biggest non believer of strategic pricing because Zatkoff Company, an $80 million distributor of seals and packing, is primarily an automotive distributor. The automotive business isn’t doing very well and I felt that there was no possible way that we could increase margin. SPA convinced me to give them a try and it has been nothing but wonderful things after that.”

     – Automotive Parts Distributor

 

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.

Strategic Pricing Newsletter – June 2015

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SPA - LinkedIn Group Hero Image3Inside this edition:

  • President’s Message
  • Recent Articles
  • Case Studies
  • Upcoming Events
  • Featured Content

Message from SPA President, David Bauders

“Price Completion” is the Top Concern Amongst Distributors This Year

A recent article in Industrial Distribution’s 68th Annual Survey of Distributor Operations reports “Price” as the top concern amongst distributors this year.  The price concerned came in at 54 percent outpacing economic conditions, increased operating costs and even new distributor competition.  Thinking about this topic, makes one pause.  Clearly, margin pressures are real, but distributor association benchmarking reports don’t demonstrate a massive negative trend.  Could it be “Price” concerns are instead deeply rooted in the way we learn about competitive price points?

Most companies rely on their sales team for pricing-centric feedback.  And, very few of these sales organizations have hard data.  Instead, they rely on anecdotal pricing feedback; things like “We lost the big order to the other guy on price” or “The new prospect told us our prices were too high.”

Here’s the rub, customers have a vested interest in telling you “your price is too high.”  Whether they seriously consider you as a supplier or nay, passing along a high price message sets the stage for even lower pricing into the future.  Price levels that can be used to leverage current suppliers and receive even greater discounts if you ever end up with an order.  Further, feedback from the purchasing side points to “price level” excuses as sugar-coated camouflage for issues with service, trust and loyalty to incumbent suppliers.

Additional pricing issues arise when distributors fail to understand the concept of price sensitivity.  One example from our daily life is the bread and milk loss leader strategy.  Here’s how it works.  Grocery and convenience stores all recognize most families are closely tuned to the market price of the most commonly purchased products (in this case bread and milk).  This creates price sensitivity.  Advertising very low prices on these and a few other commodities, which have high price sensitivity, gives the impression of low prices throughout the store.  Consequently, the margins of a short list of high sensitivity items are far lower than the rest of the shopping basket.

The theory applies to every industry, yet few distributors consider price sensitivity in setting their pricing strategy.  The “price competition” may very well be coming from a savvy competitor who understands the concept.

The short answer to addressing at least a portion of this top concern comes via a data-driven pricing process.  Strategic Pricing Associates has assisted over 400 distributors in developing a proven system for understanding price sensitivity and establishing fair margins for the products and services they provide.  We’ve discovered the typical distributor using SPA adds over two full points to their gross margin.   What’s more, these same distributors report top line sales growth commensurate with the markets they serve.

The whole SPA team invites you to explore our time tested process, eliminate the “price concern” and hopefully sleep better.

Articles

A Pricing Tale: Old Joe
Read an article that highlights how important it is for distributors to realize the power of a solid, scientific pricing process that will stop unnecessary discounting by sales people.

Kris Kringle’s Executive Meeting
Read part one of a two part series of fun articles that highlight how important it is for customers to focus on the value added by distributors to their operation’s supply chain efforts and why paying a premium is worth it to Santa and his executive team.

Knowledge-based Distributors Save Santa
Read part two of a two part series of fun articles that highlight how important it is for customers to focus on the value added by distributors to their operation’s supply chain efforts and why paying a premium is worth it to Santa and his executive team.

Why do they buy?
Read our article about the keys to effectively communicating the value of your products and associated services and pricing them accordingly.

What do your people believe about your company’s profitability?
Read our article about the importance of educating your sales reps on the actual profit margins your company makes and the value you provide to your customers. This will go a long way towards reducing their inclination to offer discounts as a matter of course.

Click here to read more articles.

Case Studies

Torrington Supply Company, a successful New England plumbing/ HVAC distributor, selected Strategic Pricing Associates to help retain and improve margin in an increasingly competitive market.
“For us, Strategic Pricing was the most effective, systematic way to improve our margins.”

          – Joel Becker, President/CEO | TSC Distribution Group

Philip Rosenau Co. Inc. selected Strategic Pricing Associates to save time in managing manufacturer price increases and provide flexibility to modify and customize forms, screens, and fields in the system.
“…The Strategic Pricing module essentially paid for the whole Prophet 21 implementation process in about a year.

      – Scott Holland, Executive Vice President | Philip Rosenau Co. Inc.

General Electric’s Consumer, Commercial and Industrial Channels selected Strategic Pricing Associates to lead them away from an undisciplined, non-strategic “cost-plus” approach to a market value-based, strategic architecture with improved internal processes and controls.

Click here to read more Case Studies.

Upcoming Events

June 12

SPA Strategic Pricing Conference | Las Vegas, NV

Equal parts strategy and practical tactics, this full-day complimentary Strategic Pricing Conference in Las Vegas, NV will address key topics that are particularly relevant in a recovering economy. This seminar will bring together an outstanding group of industry experts that will offer strategies on driving shareholder value – register soon as space is limited.

This big-picture seminar is focused on strategic topics of importance to the owners, CEOs, CFOs, and general managers of distribution and manufacturing companies. Experts will address the topics essential to accelerating the customer value proposition, competitive positioning and market value of any distribution or manufacturing business. The seminar addresses the strategic, analytical, process and cultural issues that are fundamental to maximizing shareholder value. The seminar will focus on the high-level, strategic and structural issues that are easily neglected in the hustle and bustle of daily business demands. It will help you to re-focus your organization on the drivers of economic value.

David Bauders of SPA, Dolores Bauders of SPA, Jonathan Bein of Real Result Marketing and Frank Hurtte of River Heights Consulting will lead presentations and best-practices panels with executives of leading manufacturing and distribution businesses.

Space is extremely limited for this event. It is not necessary to stay at Vdara Hotel and Spa at Aria, as there are many other fine hotels in the area. There is no fee to participate in this event.

Presentation Topics

  • Introduction: Driving Change That Matters in a Rebound Economy
  • Best Practices Panel Discussion: Strategic Pricing in a Rebound Economy
  • The SPA Pricing Cube™ Reporting Tool
  • Making Money with E-Commerce in a Multi-Channel World
  • Best Practices Panel Discussion: Change Management and Sales Culture – Execution on the Drivers That Matter
  • Six Sigma Pricing Process and Reporting
  • Summary: Execution Excellence in a Rebound Economy

Click here for complete agenda

Click here to register

July 15

Webcast: Improving Margins Through a More Strategic Approach to Pricing

A SPA client will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to improve margins through a more strategic approach to pricing.

August 12

Webcast: Increasing Prices and Margins Without Sacrificing Sales Volume

A SPA client will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to increase prices and margins without sacrificing sales volume.

September 23

Webcast: How to Change the Pricing Culture in Your Company

A SPA client will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to change the pricing culture in their company.

Featured Content

SPA Videos

The following videos provide valuable perspective for all companies that would like to improve their performance through strategic pricing. We work with your team to think strategically about pricing; segment your markets; analyze your invoice data; and rebuild your pricing structures to maximize your profitability. We help you build the guidelines and process metrics to ensure effective execution. We help you train your sales force in the practical and cultural dimensions of this process.

SPA Overview

 Inside the SPA Program

Click here to watch these videos on our YouTube Channel

Archived Webcasts

You can 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.

About SPA

SPA is the leading provider of pricing analytics to complex companies of all types: manufacturing, distribution, equipment, services, and software/technology products. Since 1993, we’ve built a strong platform of proprietary analytics to quickly and efficiently help companies convert their own invoice data into pricing architectures that maximize their pricing performance and competitive position. Our typical client applies our pricing architecture and improves profitability by two to four percent of sales: $2 to $4 million per $100 million of affected revenue. The benefits are staggering; and they are typically accomplished in less than 90 days.

SPA Clients include over 200 manufacturing companies including Parker Hannifin, Rockwell, GEExxon Mobil, Caterpillar as well as over 400 distributors including Harry Cooper Supply Company, Industrial Distribution Group, AH Harris, and ThermoFisher Scientific.

Click here to read SPA Client Testimonials.

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.

Inside SPA: A Chat With a Six Sigma Master Black Belt on Pricing

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Read an interview of Greg Preuer, the newest addition to the SPA team, who will be developing a program for training others in a Six Sigma Black Belt of Pricing program. Greg applied the same concepts while successfully serving as the Director of Pricing at Cooper Lighting. Excerpts of the interview conducted by Frank E. Hurtte Jr. who has 28 years of distribution industry experience and a lifetime in sales follow.

“I asked Greg about the concept of Six Sigma and pricing.”

“While it is true that most of the early Six Sigma work focused on manufacturing issues, all of my training and experience is commercially focused. I became a Six Sigma Master Black Belt in commercial process while working for GE. I have been involved in projects, led projects and supervised the leaders of many Six Sigma efforts over the years. All were commercially focused in nature,” commented Mr. Preuer.

“we asked Preuer to tell us what he learned during his nine year tenure in this position”

“Over time we discovered the most critical part of moving the pricing process forward came in helping people deal with change. Establishing a plan for the human reaction to all change is incredibly important.

Secondly, we discovered that if you want a process to stay in place over the longer term, you need to automate it. I know this sound counterintuitive, but think about this; if a person has to ‘crank the engine’ to make the process work, they tend to ignore the strategic and take care of the urgent. This is an elephant boneyard of projects where the process has ground to a halt because of the leadership burned out handling little urgent issues along the way. Automation solves those issues.”

“ In spite of the amazing bottom line potential of a well-run pricing process, few companies have a defined training plan for the person who makes it happen”

The soon to be released first of its kind training will train pricing leaders in applying time tested Six Sigma techniques specifically to the pricing process. This program is not an SPA add-on. Greg describes it as “nearly SPA agnostic and applicable to even those who want to try a do-it-yourself pricing tool.” However, he did go on to state, “it is Strategic Pricing Associate’s approach to providing the automation tools to make a pricing process that first attracted me to the company as a customer and later to join as one of the associates.”

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.