Case Studies
Three Real Success Stories
Success Story – One
Specialty Domestic
Business Unit
Business Unit
Symptoms
- Low growth – near market rate
- Low market penetration
- Too much activity / unacceptable results
- Undefined customer satisfaction
- Role confusion / contamination
- Margin not optimized for value offered
Approach
Structure Changes:
- Rationalized the customer base
- Established effective reporting lines
- Established descriptions of effective roles and responsibilities
- Established a single economic driver that employees self-identified and understood
- Established an effective incentive plan
Strategy Changes:
- Selling approach based on enlightened customer segmentation
- Marketing approach from general and passive to select & proactive
- Modified customer service rules to recognize value while smothering the market with service
Provided – Superior technical service; superior lab service; global Just-In-Time delivery; Vendor-Managed Inventory
Enjoyed – Minimum order quantity; net 30 payments; price premium; Many sole source agreements
Results within 48 months
- Became global – servicing 13 countries
- Organic growth of 165%
- EBITDA grew from 17% to 24%
- 100% customer retention
- Self-funding incentive plan doubled annual compensation for many participants
Success Story – Two
Domestic Custom
Component Manufacturer
Component Manufacturer
Symptoms
- Low growth – near GDP
- Too much activity & unacceptable results
- Unhappy customers
- Poorly-defined customer satisfaction metrics
- Low hit rate
- Discontent culture & internal conflict
- Role confusion & role contamination
- Ineffective incentive plan & poor payouts
- Inflated SGA
Approach
Structure Changes:
- Defined roles and responsibilities
- Redefined reporting lines
- Redefined workflows
- Defined effective communication and meeting norms
- Established effective incentive plan
Strategy Changes:
- Rationalized customer base
- Segmented customer base
- Established effective customer service rules; min/max inventory, MOQ, development cost sharing and reduced payment terms
- Established effective Customer Satisfaction & Retention procedures
Results within 24 months
- 57% Organic revenue growth
- Reduced SGA 20%
- Achieved multi-year sole source supply agreements
- Achieved several sole joint development agreements
- Customer satisfaction & retention increased 33%
- Reduced order fulfillment and change over costs 15%
- Successive maximum bonus payouts
Success Story – Three
Corporate National
Accounts Program
Accounts Program
Symptoms
- Low growth – near overall economy growth
- Low profitability – below corporate average
- Low market penetration
- Customer satisfaction undefined
- Too much activity & unacceptable results
Approach
Structure Changes:
- Redefined role descriptions
- Customer Segmentation allowed for servicing accounts with the appropriate resources that focused on moving the needle while servicing the rest transactionally
- Developed a unique selling proposition for each key and target account based on internal and market influences
Developed effective customer service rules:
- Minimum order quantity
- Vendor managed inventory
- Exclusive & guaranteed supply
Results within 24 months
- 100% organic revenue increase
- Sole source supply agreements with key industry players
- More than doubled profit dollars
- Increased margin 50%
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