Eric Handler headshot Written by: Eric Handler

Successful Candidates at Work

Successful Candidates at Work

Situation: Our client, a $1.8 billion wholesale distributor, had been experiencing an erosion of their gross profit margins over a three-year period. At the time, pricing decisions were made jointly between corporate and the field sales team. They were using a “meet competition” strategy, but it was not consistent geographically.

Action: Our client realized they needed to change how pricing decisions were made. Together, we developed the job specification for a new position, a Director of Strategic Pricing. We were retained to fill this important new role with someone who could learn the business quickly and make a swift impact by stopping gross profit erosion.

Results: We were able to recruit an outstanding candidate who had been leading the pricing initiative at a fortune 50 company. In his first full year with our client, he not only stopped the gross profit erosion but he was able to generate an additional $6 million in gross profit through his new fact-based pricing efforts. He also has developed an activity based costing model, which includes miles driven to customer, frequency of orders, products purchased, products returned, etc., to measure their profitability with each customer. Additionally, the Director of Strategic Pricing has developed a pricing tool for our client’s customers’ use to maximize their pricing and profitability as well. This new pricing tool has added an average of 100 basis points of profitability for the client’s customers who have adopted the tool. The pricing tool has been so successful that our client has been leveraging it to attain new customers.