How to Spin Data into Profit in 2022 - Modern Distribution Management

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How to Spin Data into Profit in 2022

In a recent MDM webcast, ProfitOptics CEO and Founder Tony Pericle summarizes how distributors can overcome supply chain challenges by addressing product availability issues, building better customer-profit models and asking the right questions.
How to spin data into profit in 2022

As supply chain issues and inflation headaches persist, the challenge laid before distributors is twofold: first to stabilize operations, but second — in the midst of the struggle — to unearth valuable, profit-friendly information hidden in analytics. Distributors in 2022 can look toward data-driven practices to make team members more agile and allow them to prioritize time and resources to grow revenue and margin in the coming year.

That’s according to Tony Pericle, founder and CEO of ProfitOptics, who says companies like his can quickly move to create “highly differentiated solutions” that help clients solve their most difficult and complex business problems and improve profit and productivity.

During a recent MDM webcast, Pericle outlined how distributors can leverage analytics to — among other things — overcome supply issues by addressing product availability, build and act on customer-profit models, and know where to look to maximize profit.

Proactively Address Product Availability Challenges

“We’ve seen a lot of disruption as it relates to the supply chain,” Pericle says. “There’s not a distributor out there that we work with that has not experienced shortages and shortages from their suppliers.”

Pericle says supply chain issues have caused ripple effects on demand that don’t allow some companies to map out accurate forecasts. In today’s business environment, distributors must account for things they can see and plan for — but also for things they cannot see but still need to plan for, he says. A good solution is to respond faster once supply issues arise, and a better solution is to offer options or alternatives to customers before impending issues occur. But the best option, says Pericle, is to combine the better option into a “load balancer,” which in practice dictates how servers are set up to prevent customers from experiencing delays when ordering on e-commerce platforms. Distributors also can prioritize internal data efforts to get the most of out of their partnerships.

To do this, Pericle suggests three routes:

Build a foundation that allows you to go from reactive to proactive by having a robust product cross reference. Pericle says companies need to leverage what he calls “tribal knowledge,” which is accumulated information from experienced sales reps who know the company’s top 50-100 products inside and out and can divide them into categories such as clinical equivalents or functional equivalents. “If you’re able to capture that information, then when a problem occurs, you have that cross reference to lean on in order to present an alternate in order to say to the customer: ‘Look, I don’t have this one. But this one is apples-to-apples. It’s just in a different colored box, or this one is not exact, but it does the job,’ with confidence based on tribal knowledge.”

Digitize customer comments and practices into a central database. Doing this can help eliminate inefficient practices where sales reps are dealing with back orders far more than they should, says Pericle. If distributors have this information in a central database, then it can be distributed in a way that will allow them to potentially eliminate “rework” in these particular, sometimes-recurring instances. It also will allow companies to pay special attention to the behavior of consistent, high-profit customers and be alerted to suspicious purchases that could negatively and unexpectedly affect inventory, he says.

Present a fuller picture of options to customers. When a customer requests a certain product but a distributor is out of stock, companies cannot merely suggest a face-value alternative, says Pericle. Distributors should consider offering detailed side-by-side comparisons, catalog listings, material safety data sheets or other information that will be vital to a customer’s decision to purchase the alternate product. Distributors also should create sample hubs, which can allow customers to compare products in a digital setting before making an informed choice.

During the webcast, Pericle also details how distributors can:

  • Build and act on ABC customer-profit models.
  • Use automation to manage inflation.
  • Ask questions and find out where to look to maximize profit.
  • Find and retain data analysts.
  • Increase revenue 20% without making cold calls.

 Watch the on-demand webcast in its entirety here.

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