Software Distribution

EBITDA up 15% in 3 months

Background

Our client, a software distributor, was suspicious that it ‘left money on the table’ because of sub-optimal pricing and the latitude given to sales people. The task was daunting as hundreds of thousands of transactions, across thousands of SKUs, are processed every year.

Solution

  • The VMX team tested various segmentations within the transactions database, the CRM, and the company’s financial systems, driving new perspectives and insights.
  • Within these new segmentations, it was found that, for small-volume customers, salespeople would always nearly underprice by 20% or more. Larger-volume customers proved to be more price sensitive, but sales people didn’t behave optimally.
  • The team made recommendations to change the incentives plan for salespeople, as well as to the range of allowed discounts within the interface of their CRM, and delivered various interactive dashboards, allowing users to access critical information faster and on the go.
  • Within the 3-month duration of the exercise, EBITDA run-rate increased by 15%, with visibility into more increases down the road.
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