FALL 2024

48 THE DISTRIBUTOR’S

48 THE DISTRIBUTOR’S LINK Nelson Valderrama Nelson Valderrama is the CEO of Intuilize, a software Service platform that specializes in helping mid-sized distributors transform data into profits. With more than 22 years’ experience as P&L manager executive for major PE firms and industrial distributors. Nelson has dedicated his career to help business uncover hidden competitive advantages and unleash the power of data in the new Digital Economy. For more information contact by email nelson@intuilize.com or visit www.intuilize.com STRATEGIC PRICING STRATEGY: THE ONE THING DISTRIBUTION EXECS MISS ABOUT PROFITABILITY AND PRICING Things are pretty scattered In the wholesale distribution industry. You’ve got tons of distributors in different sectors, all hustling in the same markets, serving similar customers with the same stuff. But here’s the kicker! Despite that sameness, some distributors rake in way more profit than others. So, what secret sauce sets the successful ones apart? We’ve tried to answer this question for years. Some distributors or branches are just more profitable than others. I’ve had the privilege of chatting with many owners at a PE firm. Now, as we bring them on board at Intuilize, profitability really boils down to growing smart, boosting productivity, and nailing the right pricing strategy. Smart Growth In Distribution “Smart growth” entails optimizing operations for efficiency, sustainability, and adaptability. This approach involves developing a tailored go-to-market strategy selecting target geographies, customer segments, product range, and services. Frequently, go-to-market strategies become generic, leading distributors to carve out niches for survival or settle for serving a few major customers, maintaining the status quo. Leaders in “smart” distribution work closely with their vendors, customers, and other important stakeholders to fine-tune the go-to-market strategy, improve tactics, etc., but they always think about growth and business continuity. They use data and insights to find ways to improve, plan the best options, and decide where to expand in the future. CONTRIBUTOR ARTICLE Boosting Distribution Productivity Distributors spend time and money boosting distribution productivity. Boosting productivity involves achieving more with the same or even fewer resources. This can include automating order entry processes and enabling customers to serve themselves on your website. Improving productivity requires examining your company through the lenses of process, technology, and people to identify the main obstacles hindering customer retention, acquisition, or delivering a superior user experience. If you lack a customer journey, begin there. Nailing The Right Pricing Strategy Smart growth is critical, and boosting productivity keeps building on itself. Boosting productivity often involves learning new skills, adopting efficient processes, and refining a sense of momentum. This is all well and good, but you’ll make the biggest and quickest impact with strategic pricing. When you add a pricing strategy to smart growth and boost productivity, magic happens. You unleash funds that help reinvest in your team, business, stakeholders, and customers. If this is so clear, why do some distributors perform better? Strategic pricing thoughtfully and deliberately sets prices based on a thorough understanding of market dynamics, customer value perception, competitive landscape, and company objectives. It goes beyond simply covering costs or matching competitor prices; it aims to optimize pricing decisions to achieve specific business goals, such as optimizing profitability, gaining market share, or positioning the brand in a particular way. CONTINUED ON PAGE 114