Blog: Case Studies - Distributors | Strategic Pricing Associates (SPA)

Chas. E. Phipps Company

Chas. E. Phipps Company of Cleveland, Ohio, is a general distributor with 30 employees in three locations, and 2,300 commercial and industrial contractor customers. The company uses the Epicor Prophet 21^® platform to manage its 7,000 product SKUs and was looking for a disciplined approach to its product pricing.

According to Tony Filipovic, Vice President of Administration at Phipps Company, “We knew there was a lack of pricing consistency among our branches and among salespeople. We believed that many smaller customers were getting an undervalued price.”

Phipps Company has seen about 1 percent overall margin improvement with Strategic Pricing, and a 2-3 percent overall margin improvement specifically with “tiny” and “small” customers. Filipovic reports, “Working with SPA after the full implementation, we’ve set goals of achieving a 60 percent strategic pricing threshold, meaning that 60 percent of our total sales for our ‘tiny’ and ‘small’ customers should be going through as strategically priced item sales. Phipps is currently at a 50 percent threshold and working toward this goal.”

In addition, the overall knowledge gain impressed Filipovic. “The discipline of Strategic Pricing is valuable; the combination of the software plus the theory is what makes it succeed,” he says. Phipps’s people can now trust that products are being priced accurately, within a range of where they need to be. “Part of the process was getting our salespeople to think strategically,” notes Filipovic.

Click here to read the complete case study.

Harry Cooper Supply

To take profitability to the next level, Harry Cooper Supply Co. set out to achieve an incremental implementation of Strategic Pricing, from “tiny” to “huge” customers. The initial data extract was started in April 2010. By August 2010, the company was live with its first set of customers.

McMullin enthuses, “The results are as predicted…Strategic Pricing works! As long as you spend the time to analyze the data properly, there can be a fast payback. We are more disciplined and not as emotional in our pricing process, so there is more consistency. Prices are the same across the board, and there has been very little customer pushback.”

The benefits were both quantitative and qualitative, according to McMullin. “We see real potential for increased profit, and better insight into our customer base. We learned that some customers were not as profitable as we thought,” he says.

Click here to read the complete case study.

IEC Supply

Over the years distributors have developed a mythology of their own. Some believe technology is out of their price range. Others feel process building a solid process around their business negates the creativity of their staff. Another myth exists around the pricing process; where distributors conclude that pricing process is something that only works for those mega distributors selling commodity products. Mike Zielinski of Arizona’s IEC Supply doesn’t buy into any of these commonly held beliefs.

After considering a number of options, IEC Supply selected Strategic Pricing Associates based on what they considered to be one of the smoothest implementation processes on the market. In just slightly over 90 days from signing the initial agreement, SPA came live with the IEC organization.

IEC Supply has seen dramatic results. According to Mr. Zielinski, the payback period for this piece of technology was less than two months. Further, the ease of installation and implementation took a great deal of strain off of his administrative staff. Per Zielinski, “We are a 20 employee company and we regularly push the limits of our staff. Any kind of extra load on the IT department quickly spills over into other parts of the business. The Strategic Pricing Associates program takes away much of the work required to get data from our business system to their pricing algorithms. We basically assigned a trusted senior inside sales resource to identifying product and customer classes. And overseeing the operation of the process.”

Click here to read the complete case study.

Industrial Distribution Group (IDG)

IDG is a $500 million industrial distributor with 31 sales offices and 10 distribution centers. One segment — our $200 million general distribution business — was underperforming. We partnered with SPA to get help creating the discipline, controls, process and strategy we lacked in our pricing, with the hope that this could help us deliver acceptable results.

I knew we needed to do something with pricing because it was the place where we had the most opportunity. Our pricing approach was “cost-up.” Good sales reps had high margins and average sales reps had poor margins, and pricing decisions were in the hands of our sales and service teams. The lack of any centralized process or control was somewhat embarrassing.

When selecting someone to help us, we looked for someone who could offer an aggressive and comprehensive approach. We chose SPA because they offered not only a program, but also a compelling philosophy which made sense to us.

Positive results? There have been so many. Our investment in the SPA program has delivered a 6-fold return on investment. Our profitability improved by $3 million in the first year alone. And, we get far fewer customers calling with pricing complaints, which frees up our associates to focus on providing real service to our customers.

Click here to read the complete case study.

Upcoming Events

September 11

Learn How Harry Cooper Supply Uses Strategic Pricing Tools to Identify and Capture Available Margin Premiums

Register to attend our webcast that starts at 2:00 PM EST where Larry McMullin, CFO at Harry Cooper Supply will share their journey to pricing excellence and how they are leveraging science-based strategic pricing tools to identify and capture available margin.

To implement a solution that enhanced profitability, developed pricing discipline, and removed emotion from the pricing function, they turned to SPA to implement a proven strategic pricing initiative founded on SPA’s powerful pricing analytics tools. During this 60-minute webcast, they will share their experiences and advice that will provide you with a wealth of practical knowledge including their fast ROI and lessons learned!

Click here to register

September 17-19

SPA will be participating in the Eclipse User Group Conference in Atlanta, GA.

September 21-23

SPA will be participating in the Prophet 21 User Group Connect 2014 Conference in Dallas, TX.

Follow SPA

To easily keep us with the latest SPA announcements, events and resources you can subscribe to our Strategic Pricing Pays blog or follow us on LinkedIn or on the following major social media channels and file sharing platforms: Twitter, Google+, Facebook, SlideShare, and YouTube.

We also encourage you to join the Strategic Pricing discussions in our LinkedIn group and to sign up to receive our Strategic Pricing Newsletter by clicking here.