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Tilting the Playing Field

Tilting the Playing Field. Strategy for 2015-2016. Today’s Purpose. suggest a strategic direction for 2015 synthesis of information from our experience and analysis shaped by outstanding results discuss a new strategy. Concepts. Trading Customers.

jthornton
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Tilting the Playing Field

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  1. Tilting the Playing Field Strategy for 2015-2016

  2. Today’s Purpose suggest a strategic direction for 2015 synthesis of information from our experience and analysis shaped by outstanding results discuss a new strategy

  3. Concepts

  4. Trading Customers “the market leader is the company with the lion’s share of the profitable accounts” ― Bruce Merrifield

  5. Trading Customers Us Them customers

  6. How Money is Made Really!

  7. How Money Is Made $CTS $GP

  8. What Makes Gross Profit + $GP = X

  9. What Drives Cost-to-Serve $CTS ≈

  10. How Money Is Made

  11. How Money Is Made

  12. Whale Curve

  13. Whale Curve PIP (Peak Internal Profit)$5.5M Realization27%

  14. Customer Cross-Subsidies

  15. Customer Cross-Subsidies entire basis of current business operations good customers support theirdysfunctional competitors hidden by accounting systems:competitors without WayPoint can’t see this would you say this to a greatcustomer…?

  16. Pricing

  17. Can Confer Price Advantage

  18. Customer Cross-Subsidies

  19. Competitor’s Whale Curve

  20. New Strategy

  21. Objectives have all the most profitable accounts have no unprofitable accounts deliver the best customer experience have a significant price advantage lead in profitability reward contributors

  22. Strategy: Road Map reform or trade profit drain accounts reduce transaction counts (CTS) build price advantage by reducing cross-subsidies aggressively pursue target mostprofitable accounts with using service and pricing

  23. Strategy: Steps reduce margin-support policies and actively trade GM% for CTS% incent by profit to motivate and share gains (extraordinary pay for extraordinary profit performance) build GP with intelligent pricing and add-ons build a better breed of customer

  24. Competitors’ Limiting Beliefs every sale adds increment to bottom line must win every account GM% = profit, therefore margins must be defended (lower margins will hurt profits)

  25. Strategy: End State 50%-75%+ of the most efficient (profitable) customers in the market profit generation 2x industry rates at margins 5%-10% below market market-leading concierge service and corresponding reputation

  26. Conclusion • use what we know about profit mechanics • new action on cross-subsidies • tilt the playing field: • get the best accounts • trade off money losers

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