Electrify your Profitability Masterclass

© 2016 Roger Harrop Associates www.rogerharrop.com

ELECTRIFY YOUR

PROFITABILITY


US retail Price/gallon

Source: Cockeyed.com


Sales

Volume


Profit


Price

Productivity

Volume

A Balanced Plan


People

Cost of Sales

Overheads

Profit

CoS


COST of SALES %


COSTSPRICES

Costs


COSTSPRICES

Prices


10090

Price

Profit

100

Volume

30% Gross Margin


10090

Profit

100

150

Price Volume


100110

Profit

100

30% Gross Margin

Price Volume


100110

Profit

100

75

Price Volume


Price/Perception Matrix™

Price

Perceived Added Value

Commodity

Buyer

High Added Value Product/Service

You


250g bag ground coffee

£3.0010 x coffee pods

£2.90

£1.20/100g £5.80/100g

29p/cup £2.60/cup


MIX


Margin % Sales£k

Approx %age direct

Strategic Import’ce /

10

Agreed Action

Comments

RE Buildings 5.0 65 44 1 CMargin maybe around 8.6%

GE Constr 9.0 97 0 8 AMargin maybe 22% after rebates

Dave Hutchinson 9.6 182 0 2 C

Border Steel 8.6 377 73 7 A

Sherwood 8.7 102 - Gone bust

Mervyn D 12.7 64 46 3 C

Balfour K 12.6 44 0.4 ? ?

A&J Wilson 15 50 22 - D

WA Forster 12.0 55 51 4 C

Douglas 11.6 230 52 ? D

Keith Wilson 13.8 49 60 ? ?

M&S 12.8 417 26 8 A

RJ Fry 16.0 85 31 6 C

RK&E Hunter 18.5 45 0 8 B

John Sisson 17.6 53 0 ? D

Shermaynes 19.3 47 6 ? D

Jarow 16.8 88 22 8 B

Fisher 19.8 42 0 ? D

D&M Porter 20.0 122 29 ? ?

Agreed action key:

A: No actionB: Gently raise margin to 20%C: Raise margin to 20% now

D: Sales strategy to increase sales and margins over time – monitor regularly


People

Cost of Sales

Overheads

Profit

People


= £ Sales People

Productivity

© 2016 Roger Harrop Associates www.rogerharrop.comSource: Proudfoot/Ericsson

52%

Travel

25% Travel

&

&

Admin

Admin

15% Service

15% Service

35%

Active

23%

Selling

Active Selling

10% Prospecting

25% Prospecting

Salesperson’s Time

33%

60%



Source:Forrester

Millennials

Carry out every transaction in their life through a smart phone

41%




People

Cost of Sales

Overheads

Profit

O’heads


Lower Cost n Direct costs n Labour costs n Overtime costs n Rework costs n Operating efficiency n Change over time Shorter Lead Time n Throughput time n Delayed production

monitor n Schedule achievement n Inventory levels Quality n First time okay rate n Rectification time n Scrap Rates n PPM levels n TPM achievement n SPC capability

Continuous Improvement Cycle

Order Fulfilment Quality Waste

Reduction

FlexilbilityContinuous Flow



Sales

Volume


Why Customers Leave

Perceived Indifference

68%

Unresolved Conflict

14%

Die/Insolvent 1%

Move 3% Influenced

Away 5%

Get a Better Offer 9%



Number of Customers

Frequency

Average Order Value

£5000

2pa

1000

+3%

+3%

+10%


Number of CustomersFrequencyAverage Order Value

£50002pa1000

+3%+3%+10%17%

GROWTH!


Number of Customers

Frequency

Average Order Value

£5000

2pa

1000

+3%

+3%

+10%


Pros

pect

ing

Sales Management Matrix™

£

StarJunior

CowDog


Pros

pect

ing

Sales Management Matrix™

£

StarJunior

CowDog

Brian

Mary

Dave

Sunil

Richard John

Darren

Laura

Susan

Colin


Pros

pect

ing

£

StarJunior

CowDog

Distributor Management Matrix


9 Laws of Persuasion

Power

power, authority, strength

Consistency

take a postion & stick

Expectancy

eg. placebo

ContrastReciprocityAssociationConformityScarcityFriends

eg. GAP insinclined to give backendorsementgo with majorityperceived limitedyou like


9 Laws of Persuasion

Power

power, authority, strength

Consistency

take a postion & stick

Expectancy

eg. placebo

Contrast

Reciprocity

Association

Conformity

Scarcity

perceived limited

Friends

you like

endorsement eg. GAP ins

inclined to give backgo with majority


The CATSDEC process

“I’ll think about it”

Close

Total

Subject toDeal withEasy?

Catalogue Agree


Marketing Sales

create impact

Unaware Aware Comprehension Conviction Action

discuss specifics

build credibility

provide proof

The Universal Buying Process



© 2016 Roger Harrop Associates www.rogerharrop.comSource: Roland Berger Strategy Consultants

2030 Global Trends

Opp

ortu

niti

es

Risk

Demographics population 6.9bn to 8.3bn

ageing +5 years

urbanisation 59%

Globalisation TICKs gdp +7.9%pa

next 11 gdp +5.9%pa

Resources energy demand +26%

water demand +53%

commodities rare metals/food

Climate Change CO2 +16%

warming +0.5ºC - 1.5ºC

ecosystem extremes

Technology diffusion high speed

innovation change lives

life sciences nbt

Knowledge know how 55% in 2ndary edu

gender gap narrowing

war for talent demand>supply

Responsibility cooperation nations

ngos +++

philanthropy +++


Sales

People

Cost of Sales

OverheadProfit


100

50

20

20

10

Electrify Profit Matrix™

Last Year Next Year

Sales

Cost of Sales

People

Overhead

Profit

Why Things Go Wrong

© 2016 Roger Harrop Associates www.rogerharrop.comSource: The Logic of Failure : Dietrich Dorner

No Clarity of Purpose

Emotional Commitment to the Past

No Systematic Thinking

Law of Unintended ConsequencesLoss of FocusNo Visulalising

over TimeBias Towards the

Present

© 2016 Roger Harrop Associates www.rogerharrop.comSource: The Logic of Failure : Dietrich Dorner

No Clarity of Purpose

No Systematic Thinking

Law of Unintended Consequences

No Visulalising over Time

Bias Towards the Present

Loss of Focus

Emotional Commitment to the Past

Why Things Go Wrong


Downwards

Outwards Outwards

Upwards

3D Leadership


The Change House

The Contentment RoomSun

Lounge

The Denial Room

Dungeon of Denial

The Confusion Room

Paralysis Pit

Wrong Direction Door

The Renewal Room


Source: DBERR

Why do you follow someone?

“A feeling of fun, energy and

excitement”93%



Belief

Passion

Courage


:: BUSINESS EXPERT :: AUTHOR :: INTERNATIONAL SPEAKER

www.rogerharrop.com

http://www.rogerharrop.com


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