Auto Parts Supplier Drives Profit to its Bottom Line

Life is good

It seemed so good at the time. Even when the auto industry is struggling, your $10 billion auto parts distribution business is flourishing.

Challenger appears

But pressure is building to deliver even bigger profits. So, you raise prices 4 percent yet only produce a 1 percent gain in revenue. Your long-standing management consultants say: “You’ve hit the ceiling on price.” So how do you drive organic revenue without driving your customers away?

Battle is on

You turn to Revenue Analytics. We analyze 89 million transactions on 500,000 parts sold to 7,000 dealers and isolate price sensitivity. We determine that 43 percent of the parts you sell can tolerate price increases of between 2 percent and 8 percent. We make targeted price increase recommendations.

You’re the hero

This time, an average price increase of 4 percent delivers a 3.5 percent revenue surge, worth $100 million to your bottom line. By eliminating the unknowns and predicting customer behavior, you have a fresh pricing strategy based on what customers do and not what they say.

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