Situation
This family-owned business had experienced revenue and margin erosion for a number of years competing increasingly with online retailers and larger businesses going direct to source markets. Their sales were largely driven by products which could be easily found elsewhere and while they had bought a number of “value-adding” services businesses, these had not been integrated into the business. They sought to revive the company’s profitability through a comprehensive review of product & pricing while seeking opportunities to grow and cross-sell related safety services to their customers.
What we did:
A high proportion of sales were driven by commercial contracts with businesses, and each had different price and commercial terms. Our start point was to model profit contribution by customer and product categories to identify which accounts were above or below target profitability leading to a range of price & commercial actions.
Additionally, we developed a sales model to link related safety services by product category, and which customer accounts should be prioritised for a sales discussion. An example of this was respiratory equipment used in confined spaces. The business had separate services functions where they could train companies in their proper use, certify, maintain equipment or provide on a lease basis. These types of opportunities were fed into different sales team objectives supported by changes to sales tools, given training and performance managed to drive success.
Business Outcomes:
Based on our analysis and sales trials, we agreed a roadmap to achieve 20% EBITDA within 18 months, and plan to x3 growth of services revenues within 5 years. The business approved a new operating model bringing product & service functions together under new leadership, a new data science team to support insight development and investment in key service offerings to re-invent the business into an end-to-end provider of safety solutions.
