Following are descriptions of two client engagements...

We worked with a warehouse distributor of an automotive commodity. As is usually the case, we were able to show our client that better alignment with their customers would produce substantially more profit, conservatively estimated at more than 30 times our fee for the engagement.

In our work we learned that compared to competition our client had excellent inside sales personnel, provided far better than average delivery service, handled the few errors in shipping and pricing quickly and with no hassle, and provided excellent warranty claims handling. They also were better in helping customers keep their inventory clean and balanced.

Many customers said they were willing to pay an extra $1.00 to $3.00 per unit for the overall level of service, especially the delivery service.

A second thing we learned was that some customers purchased only low priced products, but received all the same excellent services. Adding the cost of handling the product in and out of the warehouse to the cost of the other services provided, we found our client had negative gross profit on sales of low end products. Obviously, if a customer bought only low-end products, our client lost money by selling to that customer.

We recommended adding $1.00 to $2.00 to the selling price of high end products; and either dropping or reducing delivery service to customers buying only low end product. The increase in profit from implementing these recommendations added very significantly our client's profit.

We finished the engagement with a feeling of great success. We had proven once again that alignment with customers produces both quick and long term increases in profit, as well as customer loyalty.

CASE #2

A small company manufacturing highly technical micro-electronic components asked SixPillars Research Group to evaluate their brand strength. We talked with their customers worldwide, learning that our client was a well-respected, quality vendor who communicated well with them and rarely missed a promised delivery schedule. This was no surprise as we knew the company to have few "lost" customers.

What we did not know, and which became valuable information to our client, was that their pricing for small quantity, prototype orders was some 15% higher than competition. Because many of the prototyped items became production items, our client lost the opportunity to participate in that business because they had overpriced the prototypes. Lowering prototype/small order pricing led to several new production quantity orders that otherwise would have been lost.