Customer Stratification: Best Practices for Boosting Profitability
F. Barry Lawrence, Ph.D., Pradip Krishnadevarajan, Senthil Gunasekaran
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Take a couple minutes to listen to Barry Lawrence of Texas A&M University talk about the first-of-its-kind and top-selling study, Customer Stratification: Best Practices for Boosting Profitability.
Best-in-class distributors categorize customers based on various factors, but customer stratification has long been an unexplored area for most distribution companies. Not anymore. At last, that gap is filled by this first-of-its-kind research study, Customer Stratification: Best Practices for Boosting Profitability.
Specifically for wholesaler-distributors, this groundbreaking study offers you 20 practical action steps that your company can implement today and over time as a result of the best practice research conducted with 68 real wholesaler-distributors across multiple lines of trade.
This cutting-edge study focuses on the four key dimensions of Customer Stratification Best Practices for Wholesaler-Distributors:
- Buying Power
- Customer Loyalty
Rather than focus on sales force communication, this research focuses on customer relationships and the value customers provide to their wholesaler-distributors. That value is achieved through
- increased revenue — the value to the customer must be addressed
- decreased expenses — complex service offerings and how the customer accesses them are key factors
- optimal allocation of assets — driven by customer and supplier expectations.
Customer stratification is a critical business process that every distributor should adopt and execute well to achieve greater profitability. When you educate your staff about the customer stratification best practices found in this book, they will have the tools, knowledge, and motivation to establish and sustain this important business process. Successful customer stratification results in your company continually improving your shareholder value.
This book is a collaboration of the NAW Institute and Texas A&M, two leaders in wholesale distribution education and training.
Save 15% when you order together with these other best sellers from the authors at Texas A&M: Sales and Marketing Optimization: Developing Competitive Value Propositions in Distribution and Optimizing Distributor Profitability: Best Practices to a Stronger Bottom Line.
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What Readers Have to Say
- "Customer stratification has greatly enhanced our understanding of our customers. We now know which customers maximize our value proposition. Linking customer stratification to our supplier and inventory systems empowers our team to quickly distill the variables affecting risk and reward so they can make better and more profitable business decisions."
- — Frank Flynn, President, Sager Electronics
- "Customer Stratification" has the power to enable us to transform our company from being product-driven to customer-driven. It has helped us understand our customers in greater detail, enabling us to optimize our selling resources, which will result in an improved ROI."
- — Don Schalk, President and COO, C.H. Briggs Company
- "The customer stratification model has allowed our company to continue to stay ahead of our competition and excel in profitability and customer service."
- — Tim Miller, Vice President–Operations, Security Contractor Services, Inc.
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As a wholesaler-distributor, you need to ask yourself:
- Should we also seek to understand customers better?
- If so, do we maintain relevant, reliable, and quantifiable information routinely recorded in our IT system on a periodic basis?
- How should we stratify our customer base?
Most customer stratification applications focus on a single dimension, such as sales volume or gross margin. But this doesn’t guarantee a profitable or practical result. In this book, the authors present a customer stratification framework that combines several dimensions. Distributors do not have unlimited sales and marketing resources, so prioritization of these dimensions is vital.
This book presents the customer stratification framework, a distributor-specific cost-to-serve model, a step-by-step implementation approach, and a series of real-world case studies. The customer stratification framework not only distinguishes customers from each other, but also provides a blueprint for conducting future business. The book concludes with a plan-of-action roadmap, which provides an action plan and suggestions for implementing a customer stratification framework at your company.
About the Authors
F. Barry Lawrence, Ph.D.info page
Barry is Director of the Industrial Distribution Program and the Global Supply Chain Lab at Texas A&M University. He is a Fellow of the NAW Institute for Distribution Excellence and an author of four books on distributor competitiveness. He serves as an adviser to the distribution channel on supply chain management, and is a frequent speaker for distribution associations and private firms on a wide range of supply chain topics.
Pradip Krishnadevarajaninfo page
Pradip is a founding member of the Global Supply Chain Lab at Texas A&M University. He is an industry adviser, business manager, researcher, and author of three books. Experienced in diverse channels, he assists wholesaler-distributors with best practices, business decisions, education, and technical support.
Senthil Gunasekaraninfo page
Senthil is an industry adviser, business manager, leading practitioner, and researcher at the Global Supply Chain Lab at Texas A&M University. Experienced across multiple lines of trade, he designs and directs industry projects focused on implementing best practices for wholesaler-distributors. He is an author of three books, and is an APICS Certified Supply Chain Professional.
Why NAW Institute Publications Are Different
NAW Institute for Distribution Excellence conducts research into strategic management issues affecting the wholesale distribution industry. Our research is conducted with best practice wholesaler-distributors, and we publish leading-edge research studies with practical application for wholesale distribution firms of all sizes and across all lines of trade.
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