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In pursuing better cash flow, the challenge is identifying the sales that are canceling profits already made, and that's where analytics comes in.
Analytics-driven operations can deliver staggering profit gains, but it takes a visionary leader who won’t accept a company’s current limited analytical expertise. In this article the author, who will outline these concepts at MDM’s Pricing & Profitability Summit, www.pnp.com, Apr. 15-17, argues that distributors can shift from a revenue-share mindset to a profit-share mindset by zeroing in on three key metrics: gross profit, cost-to-serve and net before compensation. It also outlines how the concepts of line-item profit analytics and quantum costing can create an effective analytics environment. This article is an excerpt from a chapter in A Distributor’s Guide to Analytics, a book published by MDM.
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There is often a perception in sales that the smallest accounts are not worth the time and effort to obtain the small amount of sales they provide. But a shift in how these customers are served can result in a significant improvement to the bottom line. This special report examines ways distributors can overcome the challenges of selling to smaller customers to make these accounts a profitable part of their business.
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