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Client: A $50 million/year national wholesaler of electronic components and devices. |
Challenges: In the face of the recent recession, our client was challenged by a strong competitor that was "buying market share" with very low prices on certain high-volume commodity-type products. The competitor was financially stronger and our client could not match the lower prices indefinitely.
Solution: Most Business-to-Business companies compete on more than price alone. Recognizing this, our client's sales team interviewed established customers. They discovered that while price was important, the accuracy and speed of deliveries was usually more so.
Our client worked with their logistics vendor and negotiated an agreement that included stiff penalties for deliveries that did not meet the times and dates promised to the client. Management Analytics Group also developed an analysis tool that used historical order delivery data to predict reasonably-achievable delivery times for each client's location. The data were updated weekly to revise the delivery times as local conditions changed. The system also highlighted deliveries that arrived outside the promised delivery windows.
Result 1: The analysis helped our client's sales team make reasonable delivery schedule promises. This avoided most delivery problems. Customers quickly discovered that paying a slightly higher price was well worth it.
Result 2: The analysis was very useful in auditing the performance of the trucking company. This information allowed our client and the logistics firm to adjust their agreement so that it remained fair and workable.
Result 3: The analysis also helped the company keep clients. By alerting the sales team to delivery problems, the analysis helped the sales team to maintain a good working relationship with each customer. This improved customer satisfaction and customer retention..
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