Deconstructing the ‘Profit Sandwich’ - Modern Distribution Management

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Deconstructing the ‘Profit Sandwich’

The three things distributors need to focus on to grow profitably.

Distributors need to focus on three things to grow profitably, according to Steve Deist of Indian River Consulting Group: data and insight, market strategy and alignment.

Deist spoke at the Advanced Profitability Innovation Conference, held in Phoenix, AZ, this week for distributors.

Deist, who also spoke in the recent MDM Webcast on CRM and sales strategy, framed his discussion with what he called a “profit sandwich.”

Investments, such as software, training and projects, and results in the form of short- and long-term financial performance, are the bread.

Inside that bread are data and insight, market strategy and alignment.

Data and insight are critical to understanding what’s really happening with customers and other parts of distributors’ businesses, Deist said. Distributors need to go beyond anecdotes, including those of the sales force, to get the underlying data that will show the full picture distributors need to make better data-driven decisions.

Market strategy involves a “sober evaluation of the services you’re offering,” Deist said, and where you can improve that value. Don’t complicate it, he said. He provided an example of a distributor that wanted to know why a particular type of customer did business with it. Turns out, it was not the suite of services the distributor provided; it was the distributor’s location. For the product the customer needed, location was everything.

And finally, alignment of the organization is important to follow-up effectively on the insights and strategies that distributors pursue. This includes sales force realignment to more effectively deploy resources.

Top-performing distributors, Deist said, are analytically grounded, strategically driven and structurally aligned.

Learn more from Deist by ordering the DVD of the recent MDM Webcast, CRM & the Strategic Sales Force. The webcast is also available on-demand.

Find Lindsay on Google+

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