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In Search of the Perfect Customer: Cost-to-Serve for Distributors

Brent R. Grover

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As wholesaler-distributors operate in today’s economy, they must protect their most profitable, high-growth potential customers and avoid squandering their precious resources. If your sales compensation plan and other policies encourage your staff to misspend their time and your resources on the wrong customers, now is the time to act. If your company is overlooking opportunities to make money and stop profit leakage, this is the book for you!

After you read this book by distribution financial expert, Brent Grover, you’ll be better equipped to

  • assign your people and assets to the most profitable and fastest-growing customer segments
  • tailor your services to precisely meet the needs of your most valuable customers and avoid overserving your other customers
  • ensure that your company is paid for the extra services that you provide to specific customers
  • adjust your pricing to create shareholder value as well as customer value
  • zero in your company’s strategy on your customers that contribute the most to your bottom line.

Save 15% when you order together with these other best sellers by Brent Grover: Mergers and Acquisitions for Distributors: Expert Advice for Buyers and Sellers and Strategic Pricing for Distributors: Tools and Rules for Building Higher Margins.

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What Readers Have to Say

"Great read. Our margins have tightened since March 2008 and our costs have increased. I needed a guide on what to measure. This book spells out what needs to happen in most aspects of measurement and performance standards. The author documented where I need to focus my attention to meet the challenges we face in the coming years. This book is exactly what I needed."
— Michael Murphy, Vice President, W.A. Birdsall & Co.
"Brent Grover’s book is perfectly timed to aid wholesaler-distributors in simplifying the complexities associated with the ever-changing business model—shrinking margins, increasing costs, and slow sales. The chapters build a foundation of relevant, pertinent, and accurate information. At Parksite, our leadership team is using this book in next year’s planning process, and I recommend it to all wholesaler-distributors."
— George Pattee, Chairman and CEO, Parksite, Inc.
"Nothing drives profitability more than managing the cost-to-serve customers. Nobody knows more about cost-to-serve than Brent Grover."
— Dr. Albert D. Bates, Founder and Chairman, Profit Planning Group
"Brent Grover is one of the leading thinkers in distribution management today. This book offers distributors a fresh, insightful approach to improving their business, and a practical pathway to business success. Concisely written and full of concrete examples, this book is a must-read for distribution managers at every level of your organization."
— Jonathan Byrnes, Senior Lecturer at MIT, and Author of Islands of Profit in a Sea of Red Ink
"Implementing cost-to-serve insights is critical to distributor success. No one is better equipped to write a book on cost-to-serve than Brent Grover."
— D. Bruce Merrifield, Jr., The Merrifield Consulting Group

Extended Description

Who are your perfect customers who could be your most profitable customers? Perfect customers place profitable orders, at least most of the time. With perfect customers, the critical variables that make customers either profitable or unprofitable are in balance: order size, product and service mix, asset efficiency, and gross margin. You’ll make most of your profits from your perfect customers and you’ll lose money on some of your largest accounts. The key is to ameliorate your pool of customers so that you have more perfect customers!

The good news is that, armed with the right data and good tools, you can improve some of your less-than-perfect customers and make them better over time. In other words, you can create your own perfect customers! One of the tools is cost-to-serve, which is the application of customer profitability analysis to calibrate precisely which services each customer needs—no more, no less—and to know your costs to make sure that your company is duly paid.

About the Author

Brent R. Grover

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Brent is Managing Partner of Evergreen Consulting, LLC and a Fellow of the NAW Institute for Distribution Excellence. He serves as an adviser to the distribution channel on strategic pricing, mergers and acquisitions, and profit improvement. He also serves as a director of several companies and is a popular speaker at wholesale distribution industry gatherings.

NAW Institute LogoWhy 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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  • Mergers and Acquisitions for Distributors: Expert Advice for Buyers and SellersFind out more »
  • Driving Profitable Growth: A Distributor's Playbook to Generate–Manage–Sustain Competitive AdvantageFind out more »
  • Pricing Optimization: Striking the Right Balance for Margin AdvantageFind out more »
  • Sales and Marketing Optimization: Developing Competitive Value Propositions in DistributionFind out more »
  • Customer Stratification: Best Practices for Boosting ProfitabilityFind out more »