Dirk Beveridge 2017-12-04 12:43:55
Achieving the desired customer outcome Last time, we talked about how to become an overpowering force in distribution and cited numerous examples from packaging distributor Berlin Packaging and its Chairman and CEO Andrew Berlin. As I mentioned in the October issue, Berlin Packaging has what I refer to as five obsessions that have led to the company’s financial success and it becoming an overpowering force in distribution. Let’s zero in on the first obsession — the desired customer outcome. Berlin Packaging has an unmatched obsession for the desired customer outcome. Everybody talks about customercentricity and being customer-focused. Berlin Packaging is customer-focused and customer-centric, but it doesn’t stop there. Instead, it also is focused on the outcome its customers desire. If you want to become a juggernaut in distribution, you must have an obsession with driving the business outcome your customers desire. Berlin will tell you Berlin Packaging is more than just a supplier of rigid packaging. They’re an agent that helps customers increase their profitability and their overall net income. Packaging is the currency to achieve that goal. Berlin Packaging is so obsessed with its customers’ profitability that it’s discussed in its own business model, which outlines the three ways Berlin Packaging can contribute to improving its customers’ profitability and net income. The first way is by helping customers get more sales. Berlin Packaging knows real solutions will help drive improved sales for its customers, which in turn will improve its customers’ net income. The second way is by understanding its customers’ business so well and in such great depth that it can help customers reduce their costs beyond just the cost of goods sold and packaging. If Berlin Packaging works long enough, hard enough, and commits itself to strategically looking at and truly understanding its customers’ business, it can successfully help drive down costs in their operations and improve the customers’ net income. Number three involves finding ways to improve customer productivity. Berlin Packaging actively looks for ways to help its customers get more done in less time, because it knows that, in the long run, that too will help its customers improve profitability and increase their net income. Let’s take a look at how these ideas can work in practice. Number one, to help the customer drive improved business outcomes from improved sales, Berlin Packaging often helps the customer find a way to differentiate themselves or help them attract consumers, build loyalty and so on. Number two, to help the customer drive improved business outcomes through lowered costs, Berlin Packaging often finds ways to cut the unit cost through reduced material usage, optimizing the pack-out, reducing freight spend, minimizing returns and lowering warehousing spend. Number three, to help the customer drive improved business outcomes, Berlin Packaging often helps the customer improve productivity by streamlining the supply chain, increasing the line speed associated with filling the packing, handling inventory, managing logistics, providing on-time delivery and simplifying order management. Berlin Packaging does more than just talk about improving its customers’ net income. It’s built into everything the company does. What Berlin Packaging really sells is results, EBITDA and growth. They sell improved profitability and it’s an obsession throughout the organization. And Berlin Packaging has successfully managed to increase its customers’ profitability. Over the last three years, Berlin Packaging has added more than $200 million in profitability to its customers’ bottom lines. In 2015 alone, Berlin Packaging delivered $95.5 million of income to its customers as a result of working with them. To give you some idea of how obsessed Berlin Packaging is with delivering the desired outcome, it built the quantifier of adding income to its customers to their ISO certification process. As Berlin himself once said, “We have been able to catapult the company forward by distinguishing ourselves from our competitors by focusing on our customers’ bottom lines.” Does any of this sound familiar in your organization? Dirk Beveridge is leading the movement of change, innovation and transformation throughout distribution. He can be reached at www.dirkbeveridge.com or email@example.com.
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