A Better Approach to Margin Management
There Are Two Key Principals in Margin Optimization…You Have To Gain Trust to Gain Margin and It Takes Work To Keep The Gain
You have to gain trust…
We believe margin optimization is a behavioral not a technical challenge. Sure, there’s a lot of analysis we take care of for our clients. However, the path to success is getting your sales force to use your new pricing. In order for the sales force to use the pricing, they have to understand how it is set and trust the price. They need to feel confident they can address customer concerns and be fully motivated to succeed. So our advice is to discard those that make a margin optimization program sound simple. If you just buy some tool or send a staff person to a workshop, and delegate the process, your chances of success go down. With Profit2’s comprehensive service, we do the behind the scenes work so you and your executives spend your time leading a culture change.
It takes work to keep the gain…
In margin optimization, getting a margin gain is easier than hanging on to the gain.
Our industry is extremely dynamic. If you aren’t prepared to keep your pricing system current, sales will suffer and your people will lose trust in the program. You need to watch over sales continually to spot prices that are now too high as conditions have changed. It’s also important to spot where you have opportunities to further increase margin. Our practice has taught us that margin gains can be kept and further increased but it takes work. All system prices need to be reviewed at least quarterly…60+% of prices need to be modified at least once a year.
Do-It-Yourself or Profit2?
There are two basic options for how to proceed in increasing margin. You can do it yourself or enlist the comprehensive services of Profit2.
Doing something yourself always sounds tempting, especially in lean times. You can probably do anything yourself with enough time and resources. The question becomes do you have the resources to devote and to keep focused on the work and at what cost to the rest of your business? If you can dedicate several people, feel confident you have the IT expertise; you can get the work done in 12 to 24 months.
Many companies have popped up recently trying to sell software and advice. However, even if you buy some software, or send your folks to a workshop you need to understand you are doing it yourself. In order to gain margin and keep the margin gain you will have to deploy resources.
Therefore, the question becomes what is the most profitable way you can deploy your internal resources…performing specialized analytical tasks and price system maintenance or serving your customers?
Profit2 provides a better approach to improving your margin…
- Our methodology is designed to safeguard your business
- The approach enables your sales force to trust your pricing
- There’s no software to buy, pay to modify or update
- We do all analysis and program startup work
- You set strategic direction and review recommendations
- We analyze every sale you make for risks and opportunities
- You have complete information to manage the program with our Executive Margin Management Dashboards
- It’s our job to keep your pricing system up to date based on current market conditions
- We provide additional analysis to help you price all sales
- Profit2’s comprehensive service costs no more than doing it yourself