Latest Event Updates

Price Increase: If Not Now, When?

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Read excerpts of an article that highlights how important it is for distributors to be able to implement price increases given a backdrop of continually rising input costs and a strong economy with some forecasting 3.7 percent growth.  Now is the time for distributors to raise their prices.

“Why we’ve got low margins today…”

Downward pressure on margins is the universal distributor complaint. New competitors, supplier sales teams setting prices at unsustainable levels, the internet and customer pushback are all finding their way into the discussion. Further, in spite of some major productivity advancements, operating costs continue to rise. One distributor, who closely monitors operational costs, commented costs have risen nearly 25 percent faster than offsetting gross margin gains over the post-recession era. Clearly, we need to do something.

When times are tough, margins get another squeeze. During “The Recession,” many suppliers instructed their field teams and distributors “not to let price be an issue” while grabbing what little business was available. We responded. Pricing levels extended on projects and ongoing flow business took a gross margin nose dive for manufacturers and distributors alike. The problem lies in the fundamental difference in the distributor and manufacturer business model. The distributor slice of the total “supply chain” gross margin is much smaller than that of their supply partners. For example, Manufacturers make 45-60 percent gross margin and the Distributors receive 20-30 percent. Simply put, we distributors have less wiggle room.

Once The Recession ended, we found ourselves stuck with the lower prices and lower margins. On the customer side, customers discovered new base-line low prices and latched onto the savings. With this fact freshly planted in their minds, many pushed/negotiated to extend the lower level.

“Good times are the right time to ask for a little more.”

Fortunately, most of our customers are out of their own financial crisis. They no longer need to squeeze their suppliers just to survive. The new sellers pumped into our territory are mostly settled into position. They have discovered enough accounts to justify the meager commissions needed to survive. More importantly, customers are busy. They, along with their purchasing/procurement departments, are relying on you for expanded services and dependable deliveries, not record setting prices.

If ever a time existed to push margin to a new level it is now. The window, however, is narrow. Business cycles, by their very nature, move from great to poor. According to economists, this growth spurt will extend into mid-2018. Time is short. We cannot and should not procrastinate our plan.

“Strangely, many distributors have long term pricing agreements without expiration dates.”

The customer asked for longer range pricing stability and the distributor pushed competitors out of the way with a pricing agreement. Some of these are well crafted, while others ask the question: Exactly when will the distributor ever be able to execute a price increase?

Any agreement over one year old is ripe for a price increase, regardless of your current margin. With exception given to a limited number of commodities, it’s just not reasonable to assume the cost of anything has remained the same for over a year. I recommend a proposed price increase of 2-3 points here.

When establishing new agreements, put in openings for new price increases in the future. Ideally, these would be tied to a six or twelve month cycle.

“Review all Manufacturer extended Special Pricing Agreements”

These pricing agreements negotiated trilaterally with the manufacturer, distributor and customer. Typically, distributors raise the price only when the manufacturer raises the price. Sometimes, the manufacturer price increases are not passed along to the customer. This needs to be addressed as soon as possible.

Whatever the manufacturer’s increase, move the gross margin up at least full point. To illustrate, the manufacturer increases the distributor price by 2.75 percent, the distributor increases the customer price by 3.75 percent.

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.

Webcast: SPA Customer Panel Discussion: Driving Profit Improvement Through Better Pricing and Negotiation Strategies

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During this 60-minute webcast a panel of SPA clients will share their experiences and advice on how they SET optimal prices and GET improved profit margins through more effective price negotiations.

Program Description

Thursday, April 27, 2017 @ 2:00 PM Eastern

Click here to register

Improving profit margins in today’s distribution environment is a priority for every leader in business. Pricing optimization and improved negotiation capability are two elements of an effective profit margin improvement strategy.

Webinar attendees will hear from leading distribution organizations who are leveraging solutions from SPA and SPASIGMA to SET optimal prices and GET improved profit margins through more effective price negotiations.

You’ll hear how our customers have been able to quickly implement pricing tools and strategies that have improved margins as well as how they strengthened their inside and outside sales teams by undertaking negotiation training that build sales skills to sustain the margin improvement.

Webinar panelists include Rich Chadwick (United Electric), Tom Flater (Echo Group), Bob Decker (Livingston & Haven), and Jerry Molaver (Torrington Supply). They will share how they introduced new tools and strategies in their businesses to drive margin improvement and grow their businesses profitably.

Other SPA Events

Set You and Your Team Up to Win Better Agreements at Battle For Margin

Your organization’s profits depend on the individual and collective negotiation skill of your employees – from sales to purchasing. The Battle for Margin negotiation intensive is a rare opportunity to dive deeper into negotiation strategy that will immediately drive for more profitable agreements. Don’t you and your team deserve to be set up for success?

Don’t miss the Battle for Margin – it will be held June 8-9 at the Mandarin Oriental Hotel in Las Vegas.

 

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.

The Ultimate Negotiation Strategy Checklist

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Negotiation is like any sport. The best negotiators, like the best athletes, never stop training. They learn new skills and work to develop them. They welcome the coaching and equipment that can improve performance.

We’ve trained thousands of master negotiators over the years, and if there’s one common trait among those who become expert negotiators, it’s that they start to see negotiation as a game. It’s not uncommon for people who want to learn “just enough to get by” get wrapped up in it, suddenly amazed by all the new opportunities made visible through the lens of negotiation.

When you start to see the art, the strategy and the techniques of professional negotiation as a game, what you have is a challenging, rewarding “hobby” that boosts your professional worth, the demand for your talents, and consequently, your income. Heck, even practicing negotiation can be an entertaining endeavor.

Ready to up your game? Get started with our ultimate negotiation strategy checklist.

❒ Brainstorm “The Golden Question”.

With a name like “the Golden Question,” you know it’s juicy. So I won’t keep you waiting – here it is: If there are pressures on me, what are the pressures on the other side?

We tend to dwell on our own pressures, and that puts us at a disadvantage. It’s easy to forget that the other party has pressures too. Brainstorming the Golden Question isn’t just a great strategic exercise that can put you on equal, if not firmer footing than the other party. It also promotes a productive mindset that allows you to approach each deal with confidence.

❒ Employ a discovery process.

Now that you’ve brainstormed a list of pressures the other party may be facing, it’s time to uncover which ones the other party is actually experiencing. Here are a few tactics you can use:

  • The Detective– Strategically probe the other party for beneficial information. Think through the “5 W’s” and ask open-ended questions. Write your questions down and review them before the meeting because it helps you ask each question at the most opportune time.
  • The Schmoozer– Use casual conversation to uncover the other party’s pressures. You’d be surprised what you can learn by simply showing a genuine interest in the other party’s business.
  • The Snooper– This is about using the internet to gather beneficial information about the other party. Dig beyond their website to unearth third-party data and marketing or sales presentations that reveal concerns, motivations and values.

Click here to access the complete negotiation strategy checklist and to learn more about SPASigma.

 

SPA Events

Click here for SPA event info including our next Battle for Margin and our upcoming webcasts.

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.

 

Webinar: Maximizing Profits – You Get What Your People Can Negotiate | 11-April

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In business, as in life, you don’t necessarily get what you deserve, rather you get what you can negotiate.

When: Tuesday, April 11, 2017 @ 2:00 PM Eastern

are-you-leaving-money-on-the-table

Many Distribution professionals are at a negotiating disadvantage because they have never been trained in the set of skills that effective negotiators have mastered.

Whether you are negotiating a major contract with a new client, a small add on deal with an existing customer, or a new supplier agreement with a manufacturer it is critical that you have the requisite skills to increase the likelihood of a satisfactory outcome.

SPASigma has created a fast paced, entertaining, and informative approach to developing your negotiation skills.

Join us for an informative webinar on a new approach to negotiation training.

WHAT YOU WILL LEARN

  • How to win at the game of negotiation
  • Strategies to uncover the other party’s pressures
  • Powerful negotiation tactics and countermeasures
  • Concession making strategies
  • Strategies to build and maintain long-term business relationships
  • Proven ways to increase the other party’s satisfaction

Click here to register

 

Set You and Your Team Up to Win Better Agreements at Battle For Margin

Your organization’s profits depend on the individual and collective negotiation skill of your employees – from sales to purchasing. The Battle for Margin negotiation intensive is a rare opportunity to dive deeper into negotiation strategy that will immediately drive for more profitable agreements. Don’t you and your team deserve to be set up for success?

Don’t miss the Battle for Margin – it will be held June 8-9 at the Mandarin Oriental Hotel in Las Vegas.

 

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.

5 Ways Negotiation Training is the Source of Enduring, Powerful Revenue Streams

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Way #1: Negotiation training helps you identify what matters most to win better deals

Victoria Pynchon, Negotiation Consultant, She Negotiates, says that trained negotiators begin with small talk which builds trusts and turns the conversation to their negotiation partner’s goals, preferences, desires, needs, fears, priorities, risk aversion, and attitudes toward the future. It also uncovers hidden constraints and unknown stakeholders.

“Trained negotiators know how to ask open-ended, diagnostic questions,” she says.

Way #2: Negotiation training increases the likelihood everyone wins

“Negotiation is about finding the win-win,” says Koka Sexton, Global Industry Principal, Social Selling, Hootsuite.

He believes that sales professionals will position themselves better when “they can articulate the natural give and take of a deal” and understand what the buyer is really interested in.

“Negotiation training is probably one of the most important sales skills besides making initial contact with the buyer,” says Koka.

Click here to access the full list and to learn more about SPASigma.

 

SPA Events

Click here for SPA event info including our next Battle for Margin and our upcoming webcasts.

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.

 

SPA Featured in The Distributor Channel article “Every Silver Cloud has a Dark Lining: Things to Consider in a Growth Economy”

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SPA was featured in a recent The Distributor Channel article, “Every Silver Cloud has a Dark Lining: Things to Consider in a Growth Economy”, which discusses the fact that a strong economic growth business environment can “distract from strategic thought” and why a solid pricing process is an essential part of any strategic initiative.

Excerpts of the article follow.

“Every Silver Cloud has a Dark Lining”

Not to be a perennial bummer, but all this growth stuff presents a few issues for distributors.  For the next couple of weeks we will explore issues tied to operating in a good economic times.  So, without further ado, let’s explore the dark lining in what most view as a silver cloud.

“Issue One: Brisk Business Masks Process Breakdowns”

Surging sales provides stealth cover for many problems.  You lose market share, but since the numbers are looking good you don’t notice competitors poaching business from some of your accounts.  Mediocre sellers post growth dollars and their lack of skills go unnoticed.   Sellers announce they are too busy for CRM data input.  Warehouses get dirty, shelves get cluttered.  Customer returns languish for months before suppliers are notified and credit received.

“Issue Two:  Great Business Climates Distract from Strategic Thought”

Without the right kind of discipline, distributor types find themselves consumed by urgent issues and procrastinate strategically critical issues.  It feels good to be busy and even better when busy is tied to the instant gratification of big business.  But our world is changing… Actually spinning faster than ever before.  Investing in strategic issues during good times is more important during upticks in the economy.  Experience dictates, those with solid strategy go into recession better positioned and rise faster with the next upturn.  Let’s think of strategically important topics.

“I believe a solid pricing process is an essential part of any strategic initiative.  There’s three big reasons why:”

> Pricing Process drives bottom line results.  The typical distributor using David Bauders’ Strategic Pricing Associates improves gross margin by two points.  In some industries, this nearly doubles the bottom line results.  For most distributors the gain is still in the 50 percent range.  You can’t ignore this size of an increase.

> Company value is dramatically improved.  Distributor businesses are valued on a multiple of bottom line profits before tax and interest (EBITA).  Here’s a simplified example of how it works.  A company putting $1M to the bottom line could be valued at 6 times earnings or $6M.  That company increases the bottom line via pricing by 50 percent to $1.5M.  Using the same formula, the company is now valued at $9M.  Further, our research indicates companies with higher performance than industry norms often attract a higher multiple of earnings.  So, the process may actually improve the value substantially more think multiple of 8, which means a value of $12M.  Yep, pretty strategic.

> Processes in the sales department tend to interact.  Building a credible pricing process requires detailed customer and supplier segmentation; marketing improves.  Salespeople are forced to think more critically about the customers they invest time with.  Targeting improves.  And, sales teams with well-developed targets are 47 percent more effective in reaching their goals

Click here to read the complete article.

 

Upcoming SPA Events

Set You and Your Team Up to Win Better Agreements at Battle For Margin

Your organization’s profits depend on the individual and collective negotiation skill of your employees – from sales to purchasing. The Battle for Margin negotiation intensive is a rare opportunity to dive deeper into negotiation strategy that will immediately drive for more profitable agreements. Don’t you and your team deserve to be set up for success? Don’t miss the Battle for Margin.

It will be held June 8-9 at the Mandarin Oriental in Las Vegas, NV.

Get negotiation intelligence you’ll find nowhere else:

Revolutionize how you and your team view negotiation. Give your organization the tools and knowledge to drive more profit than ever before with compelling and eye-opening case studies, critiques, and group exercises. Instill knowledge fast. The day will fly by because our seminars are purposefully entertaining and educational; people learn more when they’re having fun.

Attendee Testimonials

Here what our clients have to say about the power of strategic pricing tools from SPASigma Negotiation Training Seminars.

“SPASIGMA breaks the standard mold of slow pace seminars. It’s engaging, fun, and interactive in a setting that feels warm and comfortable.”

     — Mitch Koepp, Marketing Manager, All World Machinery

Other SPA Events

Click here for other SPA event dates and times including our upcoming 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.

Industry Leaders SPA and Tour de Force Announce Partnership

Posted on Updated on

Strategic Pricing Associates and Tour de Force to deliver a joint solution.

Strategic Pricing Associates (SPA) Inc. and Tour de Force Inc., two market-leading, respected providers of technology and training solutions to the distribution and manufacturing industries, have announced a Partnership to deliver an integrated pricing/quoting solution based on their respective platforms.

Tour de Force, a leading provider of customer relationship management (CRM) and business intelligence (BI) software and SPA, a leading provider of pricing analytics, negotiation training and LMS to complex companies of all types have announced their intent to jointly develop and deliver a new solution offering called Tour de Force Quote to Order (QTO) Optimization powered by SPA Pricing Analytics.

“By integrating what we have developed with our Tour de Force QTO functionality and what SPA has built with their pricing analytics, the integrated solution will create tremendous shareholder value by improving our mutual clients’ work flow efficiencies and profitability by streamlining quoting, providing SPA optimized pricing recommendations and conversion to order process”, said Matt Hartman founder and CEO of Tour de Force.

Founder, President and CEO of Strategic Pricing Associates, Inc. David Bauders added, “We are extremely excited about this offering. The ability to bring pricing analytics directly into our clients’ workflow process will enable sales reps to deliver profit gains of 2-4 percent of affected sales, or $1-2 million per $50 million of affected revenue. These tools also integrate nicely with SPASIGMA’s negotiation training and other LMS offerings.”

Tour de Force and SPA Inc. will be combining the core strengths of their respected platforms to create this new offering. Through the integration to an ERP system, Tour de Force and SPA will be able to analyze and provide a SPA Pricing Cube™ pro forma that will offer customers the ability to see where they can improve profitability in their specific market. In addition to the SPA Pricing Cube™, Tour de Force and SPA will provide a QTO – SPA integration utilizing the Tour de Force Quote Manager. The SPA Pricing Bands™ from SPA will be accessible from the Tour de Force Quote Manager, allowing customers access to real-time pricing based on the SPA pricing capabilities.

The timeline for this offering is expected to hit the market in Q2 2017 and will be showcased in a joint product release by both companies.

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About Tour de Force Inc.

Tour de Force, Inc. develops, sells, implements, and supports enterprise software solutions with a focus on customer relationship management (CRM) and business intelligence (BI). Tour de Force was developed for the distribution and manufacturing industries and is currently being used in a variety of B2B industries, while distributors and manufacturers continue to make up 90% of the current user base. To learn more about Tour de Force, including our cloud and on-premise solutions, visit http://www.TourdeForceInc.com.

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About Strategic Pricing Associates Inc. (SPA)

SPA is the leading provider of pricing analytics, negotiation training, and LMS systems to complex companies of all types in manufacturing, distribution, equipment, services, software and technology products. Since 1993, SPA Inc. has 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. To learn more about SPA Inc., visit http://www.strategicpricing.com. To learn more about SPASIGMA, SPA’s training business, visit http://www.spasigma.com.

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Contact:

Ken Ledyard
Director of Marketing
Tour de Force, Inc.
419-425-4800 ext. 2017
Ken.Ledyard@tourdeforceinc.com