GEB Distribution Improves Margins With SPA

George E. Booth Co. is a $30 million distributor based in Indianapolis, Indiana. They have 40 employees and cover a four state area including Indiana, Ohio, Kentucky, and Tennessee. With a customer base of 1200-1500 in five major segments, they sell process instrumentation products and automated valves and piping.

Says Alan Peterson, General Manager of George E. Booth Co. about the company's experience working with SPA, "Clearly, everyone partners with SPA to improve margin and increase profitability. And we saw those improvements. SPA helped us shift away from cost-plus pricing to a more rational, value-based pricing approach that delivered immediate benefit. But there were other significant, longer-term benefits too. We now have a strategic process and plan in place for future pricing decisions, and we know how to do it. Additionally, going through this process has improved our culture and relationships and created closer connections between management and our employees. SPA has been a great teacher. They encouraged us to ask questions and always made sure we understood what they were doing. We learned a lot about pricing in the process, and we will continue to push forward and do this better with each pricing change." 

To learn more, visit the SPA Newsroom.

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Developed through a partnership with Industrial Supply, Contractor Supply Magazine and Brown Smith Wallace Advisory Services, these 12 page Supplement Guides provide valuable, independently researched information. Each Guide details software company information, identifies vertical markets, highlights functions and technology features, new developments to the software package, shows graphs of the user range, basic entry price point, sales channel (how and where the software is sold), along with company contact information. The Supplement Guides provide everything you need to know when beginning your software selection and evaluation process.

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Embarq Logistics Enhances Pricing With SPA

Embarq Logistics is a $750 million distributor of telecommunications products and services.

Says Brad Clark, Senior VP of Sales and Marketing, of Embarq's utilization of SPA:
"Our division was in the process of soliciting buyers for divestiture and we needed to improve our EBITDA as much as possible. We employed SPA because our results had plateaued and we thought we might be leaving money on the table. And we were. SPA likes to talk about delivering 2-4 margin points but from our experience we were leaving 6-10 points on the table. We provide some degree of price flexibility to our inside sales reps and even with those modifications, we still see meaningful margin improvements. We expect these increases to continue, and we will continue to cash checks with each improvement!"

"We started working with SPA in early spring and we had new pricing for 140,000 SKUs analyzed, designed and implemented by September. Because we were nervous about potential customer backlash, we established a control group that didn't receive the SPA-determined price increases as a way to be sure that the SPA program would not negatively impact sales. This was tracked every week and not only did the SPA program not hurt sales, the margins for the SPA group improved over the control group."

To learn more, visit the SPA Newsroom.

New Software Research Guides Available
Finding that you cannot keep up with all the changes in the latest software? Want to know how the software's features and functions can assist you? Please contact sjay@bswllc.com for more information about these latest editions.

For 2019 Distribution and Manufacturing Software Guide:

http://www.software4distributors.com/downloads/2019_Distribution_Manufacturing_Software_Guide.pdf?utm_source=DownloadElectronic&utm_medium=Blog&utm_campaign=2019Guide

Visit our website to learn more about the Brown Smith Wallace Advisory Services at http://www.software4distributors.com and to use our Software Features Comparison Wizard, visit http://www.software4distributors.com/compare/default.aspx.

Also, read our 2019 Mid-Year Supplements at http://www.software4distributors.com/downloads/2019_Mid_Year_Supplement_Blog.pdf?utm_source=DownloadPDF&utm_medium=Blog&utm_campaign=2019Supp.

Developed through a partnership with Industrial Supply, Contractor Supply Magazine and Brown Smith Wallace Advisory Services, these 12 page Supplement Guides provide valuable, independently researched information. Each Guide details software company information, identifies vertical markets, highlights functions and technology features, new developments to the software package, shows graphs of the user range, basic entry price point, sales channel (how and where the software is sold), along with company contact information. The Supplement Guides provide everything you need to know when beginning your software selection and evaluation process.

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Industrial Distribution Group Optimizes Pricing With SPA

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

Said Charlie Lingenfelter, CEO "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."

Once the IDP associates saw the results and the ease with which their customers responded to the new pricing approach, they were on board and fully supported the effort. Says Lingenfelter, "Working with SPA has given us ideas we’d never have thought of ourselves. I always learn something new, something that makes a difference, every time I’m with them. The relationship has been extremely rewarding, across the board.

Learn more on the SPA website.

New Software Research Guides Available
Finding that you cannot keep up with all the changes in the latest software? Want to know how the software's features and functions can assist you? Please contact sjay@bswllc.com for more information about these latest editions.

For 2019 Distribution and Manufacturing Software Guide:

http://www.software4distributors.com/downloads/2019_Distribution_Manufacturing_Software_Guide.pdf?utm_source=DownloadElectronic&utm_medium=Blog&utm_campaign=2019Guide

Visit our website to learn more about the Brown Smith Wallace Advisory Services at http://www.software4distributors.com and to use our Software Features Comparison Wizard, visit http://www.software4distributors.com/compare/default.aspx.

Also, read our 2018 Mid-Year Supplements at http://www.software4distributors.com/downloads/2018_Mid_Year_Supplement_Blog.pdf?utm_source=DownloadPDF&utm_medium=Blog&utm_campaign=2018Supp.

Developed through a partnership with Industrial Distribution, Industrial Supply, Contractor Supply Magazine and Brown Smith Wallace Advisory Services, these 12 page Supplement Guides provide valuable, independently researched information. Each Guide details software company information, identifies vertical markets, highlights functions and technology features, new developments to the software package, shows graphs of the user range, basic entry price point, sales channel (how and where the software is sold), along with company contact information. The Supplement Guides provide everything you need to know when beginning your software selection and evaluation process.

 
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SPA Outlines How Pricing Agreements Drain Profits

Distributors must carefully and proactively manage Special Pricing Agreements (SPAs) to prevent margin erosion. Unfortunately, faced with the complexity of managing thousands of line items, all with different expiration dates, terms and pricing structures, many distributors have allowed their contracts to run on autopilot, resulting in significant value erosion.


This is exacerbated by three common scenarios:
1. Vendor pricing inevitably changes over time, usually increasing distributors’ cost to serve. The problem with keeping SPA agreements the same year after year is that the variables that made them profitable initially – such as volume and vendor pricing – tend to change over time.


2. Sales reps, who lack the time to carefully review existing SPA agreements (and who don't want to rock the boat), request extensions at the last minute. Unless they are equipped with a contract management solution, distributors have no good way to handle these last-minute requests leaving little time to determine which contract extensions are truly warranted as-is and which leave pricing below market.

3. In the absence of data, emotions drive pricing and customer negotiations. Many distributors can’t easily see whether a contract is under-performing. When the fear of losing a customer isn't balanced against the data, even the most lopsided SPA agreements are renewed.
SPA's Contract Management Solution (CMS) has simple options from highly granular and flexible to sweeping and efficient for searching, summarizing and modifying what’s always been a hornet’s nest of data. Distributors can eliminate unprofitable contract scenarios and quickly and efficiently update contract pricing for low-volume and low-sensitivity items, maximizing profits while minimizing customer push-back. SPA provides the analytical tools and online training to drive continuous improvements in adoption and thus profit improvement.


To learn more about what SPA can do for your business, visit http://www.strategicpricing.com/clients/industries




New Software Research Guides Available

Finding that you cannot keep up with all the changes in the latest software?
Want to know how the software's features and functions can assist you?
Please contact snelson@bswllc.com for more information about these latest editions.

For 2017 Distribution Software Guide: http://www.software4distributors.com/downloads/2017_Distribution_Software_Guide.pdf?utm_source=DownloadInteractive&utm_medium=Blog&utm_campaign=2017DSG 

For 2017 Manufacturing Software Guide: http://www.software4distributors.com/downloads/2017_Manufacturing_Software_Guide.pdf?utm_source=DownloadInteractive&utm_medium=Blog&utm_campaign=2017MFG 

Visit our website to learn more about the Brown Smith Wallace Advisory Services<http://www.software4distributors.com/> and to use our Software Features Comparison Wizard<http://www.software4distributors.com/compare/default.aspx>.

 

Also, read our 2017 Mid-Year Supplements. http://www.software4distributors.com/downloads/2017_Mid_Year_Supplement.pdf. 

Developed through a partnership with Industrial Distribution, Industrial Supply, Contractor Supply Magazine and Brown Smith Wallace Advisory Services, these 12 page Supplement Guides provide valuable, independently researched information. Each Guide details software company information, identifies vertical markets, highlights functions and technology features, new developments to the software package, shows graphs of the user range, basic entry price point, sales channel (how and where the software is sold), along with company contact information. The Supplement Guides provide everything you need to know when beginning your software selection and evaluation process.

Visit our website to learn more about the Brown Smith Wallace Advisory Services and to use our Software Features Comparison Wizard.

Are You Using Your ERP To Create Better Pricing?

When your salesperson goes in for a pitch, where does the pricing model come from? Instincts — or hard data?

Unfortunately, most companies rely on the former, letting sales reps’ knowledge of the market dictate the organization’s pricing. It’s a bad idea, according to an article on the Modern Distribution Management website. Companies should use their ERP systems to analyze the previous 12 months of transactions to segment customers, products and pricing sensitivity. Using big data analysis, management can determine how much a customer would be willing to pay for an item. That pricing information can be unlocked right from a distributor’s data — and turned into valuable, actionable knowledge the sales team and management can use.

Read more on the Advanced Distribution Today blog.

The Brown Smith Wallace 2012 Mid-Year Supplements are available. Visit our website to download your copy!

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