How to Boost Your Bottom Line Without Price Hikes
Bruce Merrifield, President — Merrifield Consulting
• profit analytics • 2020 Vision • WayPoint Analytics • big data • profit strategy • line-item profit analytics in distribution • profit gains • money-losing activities • Randy MacLean • Gross Profit Margin • Bruce Merrifield • cost cutting • Merrifield Consulting • money-making • profitability management • profit metrics
Thursday, January 16, 2020—There's nothing more powerful than selling higher, if only that were an option. But try raising your prices 1%, and the customer will surely notice it. They'll likely think you're raising it more than you actually are, and this can spur them into looking into competitors prices to shop more aggressively.
So aside from the buy low sell high method which hasn't worked for 45 years… what can be done to lower the bottom line? The answer is rather simple. Stop using margin percent as your primary (or only) measurement of profitability.
The introduction of new analytical power sheds light on a multitude of profit-killing activities which are otherwise invisible. In many companies, a deeper analytical understanding is what holds them back from becoming super-performers.
Many executives can see the upsides in this easily. However most companies don't already have the "profitability consultants" necessary for the process. This responsibility can't fall upon the shoulders of the executives who are already busy with a myriad of other important responsibilities.
This role of profitability consultant takes up time and energy, and in most cases it's necessary to promote or hire somebody to fill that position full-on. Don't have the bandwidth to commit to that? You can rent somebody's services to fill this role temporarily, just to get yourselves in check and set your company back on the right course.
The companies at the top level today, many of which were nearly dying in the great recession, all have either a numbers-focused executive, or some other employee filling this specialist role.
This kind of investment is like coffee money for most distribution companies, and it's an investment that will pay an incredible return.
For more information about Bruce Merrifield, visit: www.merrifieldact2.com