Leveraging the price waterfall against the industry average
In the competitive landscape of the business world, companies are constantly seeking ways to gain a competitive edge. One effective strategy is to leverage the price waterfall against industry averages. By understanding and manipulating the various components of the price waterfall, businesses can position themselves strategically and achieve a sustainable advantage over their peers.
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After considering these points along with the calculations provided in Plasma, you can adjust your strategies and realize that you can close the 400 bps industry gap by addressing the unreimbursed freight.
Benchmarking deal velocity and approval steps vs. industry average
The next business scenario we are looking at deal with a company’s deal approval process. In this case, the approval process is slower and more complex than the industry average. This cumbersome process not only causes profit erosion but also incurs hidden costs that affect sales productivity and add unnecessary overhead.
One significant consequence of a slow deal approval process is the loss of potential contracts due to delayed bids. In a competitive market, customers have limited patience and often require prompt responses to their inquiries. When approval processes lag behind the industry average, it leads to missed opportunities as potential customers seek quicker responses from competitors. This profit erosion can have long-lasting effects, impacting the company's revenue and market share.
Moreover, an ineffective deal approval process incurs hidden costs that are often overlooked. Firstly, the lower sales productivity resulting from delays in the approval process directly affects the company's bottom line. Sales teams spend valuable time waiting for approvals instead of focusing on revenue-generating activities. This inefficiency not only hampers sales performance but also demotivates employees, leading to decreased morale and potential turnover.
Additionally, the cumbersome nature of deal approval processes requires the involvement of multiple managers and stakeholders, resulting in unnecessary overhead costs.
With Plasma, you can see how much longer your processes take compared to the industry average and you can make informed changes to optimize them to better reflect your targets and increase profitability.
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To shorten the time between quote submission and approval by 50% in order to meet the industry average, there are a few key questions you must ask.
•What steps are crucial to your review process?
•Is your discount review threshold too strict?
•How can you automate your approval workflow?
The only way in which you can gain insights on these points is by primarily knowing where you rank in your industry. Plasma will help you get this insight to allow you to make better decisions and leverage your processes.