You Must Own Your Own Segments and Pricing Strategy Many distributors are confused regarding a fundamental question: should I optimize pricing internally, or utilize an outsourced pricing service? Both options offer enough benefits to warrant further attention from the savvy executive. But either way, you must own the responsibility for the results of your segmentation…
DetailsRemoving Risks in Resegmentation If you get your segments wrong, you can skew the data that you use for decisions across your organization. Bad segments generate increasingly inaccurate data, causing a cascade effect where bad data leads to decisions generating more bad data. Here are a few short illustrations of gross profit losses that can…
DetailsImproving Segment Definitions Segmentation only leads to higher profits when you segment well. It may be necessary to modify how you think about segment design. You need to ask more questions about your customer base, look at more factors than basic demographic information and go deeper into your sales history to find similar customer groups.…
DetailsAvoiding Data Free Segments The most common mistake made by many distributors in implementing a segmentation strategy is relying on data-free segments. It may seem obvious to segment customers based on company size, industry codes or geographies but in fact, these types of segments are often too broad to be useful. Worse, these kinds of…
DetailsWhy Should You Consider Enhancing Your Segmentation Strategy? In analyzing the business of hundreds of distribution companies, we’ve found that most distributors rely on very simple segmentation. Some companies even operate without any segmentation, flying blind hoping to come out at a reasonable price based solely on their own instincts and their ability to muscle…
DetailsIn Distribution, Better Segments Lead to Higher Margins Optimized pricing is one of the best—and often untapped—sources of profit optimization for a distributor. And few strategies can improve pricing in the distribution industry as well as precise, effective application of segmentation principles. In fact, many distributors are adding two to four points of gross margin…
DetailsThe Flexibility of a Cloud Subscription We’ve made it easy to get started with epaCUBE Profit Optimizer® by offering the software in a cloud subscription model. That means you can immediately improve your gross profit without a large capital expenditure with the financial flexibility of a monthly payment. And there’s no need to purchase new equipment…
DetailsAnalyzing the Impact of a Vendor Cost Change Naturally, when your vendors change their costs, this has a direct impact on your profitability. And while costs are more likely to increase than decrease, cost changes almost always present you with an opportunity to improve your gross profits. Unfortunately, vendor cost changes can happen rapidly and…
DetailsBasing Your Pricing Decisions on Current ERP Data Product data can be the Achilles heel of any pricing strategy. Without using your current data, you can only go so far with the science of price optimization. Your analysis is only as good as the data you start with. Preferably, the software you use to design…
DetailsThe Secret to Continuous Gross Profit Optimization epaCUBE allows you to take action to continuously improve your gross profit. Your analysis isn’t a one-time event but a process that keeps your margins moving in the right direction. Your pricing manager may want to remove some segments out of the analysis by tagging them and then…
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