Case Studies

Case Study: Torrington Supply Company

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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

Company

TSC Distribution Group, the parent for Torrington Supply Company, based in Waterbury, Connecticut, is a plumbing/HVAC/PVF distributor that has 135 employees and 13 locations. They have been serving contractor, industry, and institutional customers throughout Connecticut and western Massachusetts since 1917.

Challenges

  • Help a successful New England plumbing/ HVAC distributor retain and improve margin in an increasingly competitive market.

Solution

  • Epicor Prophet 21 with Strategic Pricing

Benefits

  • Margin improvement of 4.9% on 30% of 2011 sales yielded an overall margin increase of 1.5% that went directly to the company’s bottom line
  • Increased bottom line margins by 3 percent
  • Minimal customer pushback on price increases

Achieving Incremental Margin Gains

According to Becker, “I always thought we had additional pricing opportunities and were not using our sales history data effectively to set our pricing. When I heard about Strategic Pricing from Epicor, it was exactly what we had been trying to do on our own.”

“For sales priced using the SPA matrix, we earned an additional 4.6 and 4.9 percent in margin in 2010 and 2011, respectively. These are enormous margin gains with virtually no customer pushback that we never could have achieved without Strategic Pricing,” observes Becker.

Click here to read the entire Torrington Supply Company case study.

Click here to read more SPA case studies.

SPA Events

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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.

Case Study: Philip Rosenau Co. Inc.

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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.

“We have been very pleased with our Epicor Prophet 21 implementation. We went live on time and under budget. Epicor Prophet 21 was ready to go out of the box, without a lot of customization required…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.

Company

Philip Rosenau Co. Inc. is a diversified distributor of sanitary maintenance supplies and equipment that has been supplying cleaning solutions to the janitorial industry for nearly 60 years. Serving Pennsylvania, New Jersey, Delaware, Maryland, and Washington, D.C., the company employs 75 people in three offices, including a 65,000–square foot distribution center in Warminster, Pennsylvania, and two satellite offices and warehouses in West Chester, Pennsylvania, and New Castle, Delaware.

Challenges

  • Provide a Northeast janitorial/sanitary distributor with the business data, flexibility, and visibility into pricing to support growth.

Solution

  • Epicor Prophet 21 with Strategic Pricing

Benefits

  • Gross margins are up 2% while using Strategic Pricing
  • Saved time in managing manufacturer price increases
  • Flexibility to modify and customize forms, screens, and fields in the system
  • Seamless integration with third party applications

Focus on pricing improves margins

Holland notes that the Epicor Prophet 21 pricing service template helped Philip Rosenau considerably with pricing, which is not typically standardized in jan/san distribution. “Prophet 21 saves us countless hours in managing manufacturer increases,” he states. “With the previous system, item costs had to be changed manually, which was very cumbersome, considering there are more than 50,000 items we can supply.”

In addition, Philip Rosenau has made effective use of Strategic Pricing, a pricing architecture based on the principle that there are many small margin opportunities which, in aggregate, can yield 2% in additional pricing margin points for the distributor. It involves detailed segmentation of a distributor’s customers by size (from “tiny” to “huge”) and type (“core” and “non”–core”), profiling of their price sensitivity, analysis of past pricing performance, definition of new pricing standards, and development of metrics to support pricing processes and compensation. Recognizing the value that strategic pricing would provide to distributors, Epicor formed an exclusive relationship with Strategic Pricing Associates (SPA) to seamlessly integrate a strategic pricing module into its Prophet 21, Eclipse, and Prelude products.

According to Holland, “The Strategic Pricing module has improved our gross margins by about 2 percent, enabling us to recoup our investment quickly; it essentially paid for the whole Prophet 21 implementation process in about a year. The integration of Strategic Pricing and Prophet 21 was so easy; we could automatically generate sales data for SPA’s analysis, and then import their files back into the ERP. Best of all are the security and approvals levels that are built in, so we have complete visibility and can analyze and control pricing changes and/or exceptions.”

Click here to read the entire Philip Rosenau Co. Inc. 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.

Case Study: General Electric

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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.

SPA developed pricing strategies that maximized profitability in the following areas:

  • Competitive strategy and positioning
  • Channel pricing strategy into distribution: list prices, discount tiers, rebates, exception pricing guidelines
  • Distributor special price request rationalization
  • Value-based economic analysis of brand value in the consumer channel by segment
  • Good/better/best positioning of products
  • New product pricing strategy for the reveal product line
  • Global pricing agreements

Click here to read the entire General Electric 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 > Case Studies – Distributors

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The following are highlights from some of  our distributor client case studies that will help you to learn more about the significant margin improvement with a fast ROI realized by some of the 400 distributors that have partnered with SPA. These case studies cover all aspects of SPA’s work with clients including data and analytics, sales force training, behavior/culture change, and sustaining ongoing profitable pricing strategy.

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Featured Distributor Case Studies

Chas. E. Phipps Company

Chas. E. Phipps Company of Cleveland, Ohio, is a general distributor with 30 employees in three locations, and 2,300 commercial and industrial contractor customers. The company uses the Epicor Prophet 21® platform to manage its 7,000 product SKUs and was looking for a disciplined approach to its product pricing.

According to Tony Filipovic, Vice President of Administration at Phipps Company, “We knew there was a lack of pricing consistency among our branches and among salespeople. We believed that many smaller customers were getting an undervalued price.”

Phipps Company has seen about 1 percent overall margin improvement with Strategic Pricing, and a 2-3 percent overall margin improvement specifically with “tiny” and “small” customers. Filipovic reports, “Working with SPA after the full implementation, we’ve set goals of achieving a 60 percent strategic pricing threshold, meaning that 60 percent of our total sales for our ‘tiny’ and ‘small’ customers should be going through as strategically priced item sales. Phipps is currently at a 50 percent threshold and working toward this goal.”

In addition, the overall knowledge gain impressed Filipovic. “The discipline of Strategic Pricing is valuable; the combination of the software plus the theory is what makes it succeed,” he says. Phipps’s people can now trust that products are being priced accurately, within a range of where they need to be. “Part of the process was getting our salespeople to think strategically,” notes Filipovic.

Click here to read the complete case study.

Harry Cooper Supply

To take profitability to the next level, Harry Cooper Supply Co. set out to achieve an incremental implementation of Strategic Pricing, from “tiny” to “huge” customers. The initial data extract was started in April 2010. By August 2010, the company was live with its first set of customers.

McMullin enthuses, “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. We are more disciplined and not as emotional in our pricing process, so there is more consistency. Prices are the same across the board, and there has been very little customer pushback.”

The benefits were both quantitative and qualitative, according to McMullin. “We see real potential for increased profit, and better insight into our customer base. We learned that some customers were not as profitable as we thought,” he says.

Click here to read the complete case study.

IEC Supply

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.

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.

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.”

Click here to read the complete case study.

Industrial Distribution Group (IDG)

IDG is a $500 million industrial distributor with 31 sales offices and 10 distribution centers. One segment — our $200 million general distribution business — was underperforming.  We partnered with SPA to get help creating the discipline, controls, process and strategy we lacked in our pricing, with the hope that this could help us deliver acceptable results.

I knew we needed to do something with pricing because it was the place where we had the most opportunity. Our pricing approach was “cost-up.” Good sales reps had high margins and average sales reps had poor margins, and pricing decisions were in the hands of our sales and service teams.   The lack of any centralized process or control was somewhat embarrassing.

When selecting someone to help us, we looked for someone who could offer an aggressive and comprehensive approach.   We chose SPA because they offered not only a program, but also a compelling philosophy which made sense to us.

Positive results?  There have been so many.  Our investment in the SPA program has delivered a 6-fold return on investment.  Our profitability improved by $3 million in the first year alone.  And, we get far fewer customers calling with pricing complaints, which frees up our associates to focus on providing real service to our customers.

Click here to read the complete case study.

 

Click here to read more Case Studies.

Upcoming Events

September 11

Learn How Harry Cooper Supply Uses Strategic Pricing Tools to Identify and Capture Available Margin Premiums

Register to attend our webcast that starts at 2:00 PM EST where Larry McMullin, CFO at Harry Cooper Supply will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to identify and capture available margin.

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!

Click here to register

September 17-19

SPA will be participating in the Eclipse User Group Conference in Atlanta, GA.

September 21-23

SPA will be participating in the Prophet 21 User Group  Connect 2014 Conference in Dallas, TX.

Follow SPA

To easily keep us 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 > Case Studies – Manufacturers

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The following are highlights from some of  our manufacturing client case studies that will help you to learn more about how companies have partnered with SPA to realize significant margin improvement with a fast ROI. These case studies cover all aspects of SPA’s work with clients including data and analytics, sales force training, behavior/culture change, and sustaining ongoing profitable pricing strategy.

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Featured Manufacturer Case Studies

Parker Hannifin

Working with operational leaders worldwide, SPA developed pricing strategies that maximize the profitability of each business unit. Parker distributors have consistently achieved improvements greater than 2 percent of sales; and many have reached 4 percent of sales.

The project covered virtually every aspect of Parker’s pricing mix including:

  • competitive strategy and positioning
  • channel pricing strategy into distribution: list prices, discount tiers, rebates, exception pricing guidelines
  • value-based economic analysis of customer usage
  • good/better/best positioning of products
  • new product pricing strategy
  • direct account pricing strategy: customer/part number pricing recommendation
  • global pricing agreements
  • management of freight recovery, EDI incentives, other terms and conditions

Click here to read the complete case study.

General Electric

Working with GE operational leaders, SPA developed pricing strategies that maximized the profitability of both business units. The project covered virtually every aspect of GE Lighting’s pricing mix:

  • competitive strategy and positioning
  • channel pricing strategy into distribution: list prices, discount tiers, rebates, exception pricing guidelines
  • distributor special price request rationalization
  • value-based economic analysis of brand value in the consumer channel by segment
  • good/better/best positioning of products
  • new product pricing strategy for the reveal product line
  • global pricing agreements
  • management/rationalization of channel coop funds
Click here to read the complete case study.

American Standard

Working with operational leaders, SPA developed pricing strategies appropriate to maximizing the profitability of both business units. The project covered virtually every aspect of American Standard’s pricing mix:

  • competitive strategy and positioning
  • channel pricing strategy into distribution: List prices, discount tiers, rebates, exception pricing guidelines
  • distributor special price request rationalization
  • good/better/best positioning of products
  • management/rationalization of channel coop funds
Click here to read the complete case study.

ExxonMobil

SPA provided ExxonMobil’s Lubes & Specialties Business with its Product Sensitivity Profiling to build list prices using a market-sensitive approach focused on  discounting only where it produces results. Using the SPA proprietary Price Indexing methodology, ExxonMobil assessed its rebating process to identify leakage points.

Click here to read the complete case study.

 

Click here to read more Case Studies.
 

Upcoming Events

September 11

Learn How Harry Cooper Supply Uses Strategic Pricing Tools to Identify and Capture Available Margin Premiums

Register to attend our webcast that starts at 2:00 PM EST where Larry McMullin, CFO at Harry Cooper Supply will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to identify and capture available margin.

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!

Click here to register

September 17-19

SPA will be participating in the Eclipse User Group Conference in Atlanta, GA.

September 21-23

SPA will be participating in the Prophet 21 User Group  Connect 2014 Conference in Dallas, TX.

Follow SPA

To easily keep us 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.

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

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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.

Case Study: SPA Strategic Pricing Project for Parker Hannifin Provides $800 Million Impact

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SPA was selected to drive Parker Hannifin’s Strategic Pricing initiative that involved leading them away from an undisciplined, non-strategic “cost-plus” approach to a value-based, strategic architecture with improved internal processes and controls and the impact was estimated at $800 million by Parker’s CEO.

Strategic Pricing Associates led Parker Hannifin’s Strategic Pricing Initiative through its pilot stage from 1999 to 2001, and through the global roll-out from 2001 through 2005.  Encompassing all of Parker’s operations worldwide, roughly 90 manufacturing businesses and 30 trading subsidiaries (company-owned distribution channels), the initiative was a central part of CEO Don Washkewicz’s WIN Strategy, a three-pronged approach to improving profitability in this $10 billion, NYSE company (PH). The initiative involved leading all of Parker’s operations away from an undisciplined, non-strategic “cost-plus” approach to a value-based, strategic architecture with improved internal processes and controls.

The impact was estimated at $800 million by Don Washkewicz, as reported in a front-page Wall Street Journal article (March 27, 2007 ).

“In early 2001, shortly after Donald Washkewicz took over as chief executive of Parker Hannifin Corp., he came to an unnerving conclusion. The big industrial-parts maker’s pricing scheme was crazy. For as long as anyone at the 89-year-old company could recall, Parker used the same simple formula to determine prices of its 800,000 parts — from heat-resistant seals for jet engines to steel valves that hoist buckets on cherry pickers….”

Parker’s share price more than tripled during the period, easily outpacing peer industrial companies’ performance.

Working with operational leaders worldwide, SPA developed pricing strategies that maximize the profitability of each business unit. The project covered virtually every aspect of Parker’s pricing mix including:

  • Competitive strategy and positioning
  • Channel pricing strategy into distribution: list prices, discount tiers, rebates, exception pricing guidelines
  • Value-based economic analysis of customer usage
  • Good/better/best positioning of products
  • New product pricing strategy
  • Direct account pricing strategy: customer/part number pricing recommendation
  • Global pricing agreements
  • Management of freight recovery, EDI incentives, other terms and conditions

The project led to Parker Hannifin’s decision to employ a strategic pricing manager in each division. SPA also helped Parker recruit a VP of Strategic Pricing, Dick Braun, with whom they had worked earlier in his career at GE Lighting.

SPA also helped Parker with training and development to institutionalize the positive impact.  Beginning in 2004, SPA developed the Strategic Pricing Workshop program for Parker’s distribution channel. From a pilot program of six distributors, the program has expanded to over 60 of Parker’s leading distributors, with a majority of the elite distributors in each business segment participating in the program. Over half of the participants have progressed from Generation I to Generation II or beyond, with the original pilot six distributors now in Generation III.  Parker distributors have consistently achieved improvements greater than 2 percent of sales; and many have reached 4 percent of sales.

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.