Event Recap: SPA Strategy Seminar in Ft. Lauderdale, FL February 7, 2014
By Frank Hurtte
What have we learned today?
Each workday my morning ritual involves a cup of coffee and 45 minutes of MSNBC's Morning Joe program. For those of you not familiar with the program, the show is a potpourri of politics, current events and round-table chats with interesting people. And, while most days I am out the door well before the end of the program, some days I get to see the end of show wrap-up called "What we learned today?"
Unfortunately, most of us live hectic lives; lives that preclude taking a few moments to think; "What have we learned today?" Thanks in part to the fine folks at Delta Airlines, I had a moment to reflect on my time at the last SPA Strategy Seminar in Ft. Lauderdale. It was one of those "aha moments" where suddenly I recognized a number of critical points made at the meeting. During the next few moments, I jotted down my revelation.
Presentations by Distribution Experts
The experts shared a number of timely and thought provoking ideas. These are the points that jumped out at me as I sat in the Atlanta Airport reviewing my notes. I hope you find some value in my notes on the event.
Tom Gale (Modern Distribution Management)
- 63% of distributors has some form of e-commerce offering
- 70+% of distributors plan to invest further in e-commerce in 2014
- Only 21% see on-line only players as their biggest competitive threat
- By the end of 2014 nearly half of all distributors will have a "mobile app"
- High performing distributors have a growing edge in the analytics of their business
Jonathan Bein (Real Results Marketing)
- The Lake Wobegon Effect "...where all the children are above average." > Most companies tend to overestimate their strengths in the market. According to a survey, 90% of distributors believe they offer more value than their competitors. Only a very small percentage of distributors can elaborate on their value. Most say we provide better "customer service."
Steve Epner (Brown Smith and Wallace)
- Change Management: A Secret to Success > In theory, there is no difference between theory and reality; in reality - There is! Remember nobody likes change. But...Managers get paid to move the numbers. Use technology to capture the numbers, report the numbers and compare the numbers.
Panel Discussions with Leaders from Top Distributors
With all respect to the experts presenting at the Seminar, some of the most interesting points in the meeting came by way of candid comments from the distributors who took time from their busy schedules to attend and share insights from their own experience. To me, nothing is as interesting as real, personal feedback from the front lines of the distributor wars. Again, the points listed below are captured from my notes.
Comment from a distributor who had added important gross margin increases via SPA:
"We had implemented an internal pricing process several years ago. We made a slight gain in our overall gross margin but within six months, most of the gains had slipped away. What we lacked was the deep dive metrics required to hold our salespeople accountable."
Comment from a distributor talking about sales process:
"Before we started setting measures of success and managing against them, our sales team was like a day in the Wild West. Every salesperson ran their territory like the Lone Ranger, often without regard to how this impacted the profitability of the company. Since implementing a system with measures that can be pushed down to the sales territory level, things have started to change for the better."
Comment from a distributor talking about who should be responsible for the pricing process:
"We believe the person responsible for Pricing Administration must have thick skin and the personality of a 'Bad Bull Dog.' The pricing guy has to be able to go toe-to-toe with salespeople who are convinced they know the proper market price for everything on the planet."
Another distributor VP:
"I was the pricing guy when we launched the system. It was time well spent."
Comment from a distributor who had implemented the SPA plan about 18 months prior:
"SPA is the absolute best investment in distribution. We paid for the whole system in less than two months and the results continue to grow."
Strategic Pricing Associates' David Bauders concluded the seminar with a few key business observations
David believes now is the Time to Focus on Execution in our business. He laid out the following points. It is difficult to disagree with any of them.
With the current prospects for economic recovery, a focus on execution is crucial.
- Accelerate your prioritization of high value-add initiatives
- Cancel marginal projects and terminate poor performers
During a fast economy, most companies lose focus and react to events
- The concept of prioritization is lost
- The expedient replaces the enduring
What are the non-value adding initiatives that should be cancelled right now?
My final thoughts
As a senior advisor to over 50 distribution companies, I find it hard to believe that anyone would put off exploring a plan that can deliver 500% return on investment. The SPA Strategy Seminars are eye opening and always give me pause. Further, the sessions are free to distribution leadership and conducted in a way that encourages networking. If you haven't been to one, I encourage you to get information on SPA 's next Strategy Seminar.
Lastly, my company, River Heights Consulting, is entirely focused on developing better, more powerful and more profitable distributors. I also presented at the Seminar. My talk was titled 'Ten Questions that Demand Answers in Today's Distribution'. And while I did not note my presentation here, I am happy to share with anyone who is interested. Email me at firstname.lastname@example.org.