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Profit Improvement Report reduced from previous periods. On the positive side, a higher fill rate is one of the few service enhancements that automatically generates higher sales volume. Every lost sale, whether caused by being out of stock or anything else, is a pure loss of volume. Eliminating lost sales reverses the economics of the third column in Exhibit 1. Service Elimination – While it is heresy to suggest, there may be some services that everybody in the firm thinks are wonderful but which customers find to be without benefit. This is often a surprisingly fertile field for profit enhancement. In service elimination a reasonable motto would be to "copy the banks, not the airlines." Banks no longer return checks with the monthly statement. Most customers find having less to throw away to be an actual benefit. ATM machines have largely, but not completely, replaced tellers. Self-service means better service for the preponderance of customers. Airlines, in sharp contrast, have started charging extra for meals, blankets, checked bags and just about everything else. Customers go along with the add-on charges because they have to. Even if fares are lower, there is a continual bitterness about the service fees. The best way to determine if a service elimination decision is a bank action or an airline action is to ask customers. Often the feedback is enlightening. When the firm discovers it has been able to brilliantly provide a service that nobody really cares about, it is an eye-opener. Moving Forward All distributors sell products. The best ones also provide an array of services that customers value. The challenge is to identify exactly which services are truly important to customers and which ones are not. The valued services must be provided with absolute precision. And to those that are nonessential, bid adieu. n Dr. Albert D. Bates is founder and president of Profit Planning Group. His latest book, Triple Your Profit!, is available at: www.tripleyourprofitbook.com, as well as Amazon and Barnes & Noble. It includes Excel templates for understanding the profit structure of the firm and developing meaningful financial plans. ©2013 Profit Planning Group. AED has unlimited duplication rights for this manuscript. Further, members may duplicate this report for their internal use in any way desired. Duplication by any other organization in any manner is strictly prohibited. Multi-ply Your Money! with the award winning excavator and backhoe rock and frost ripping Multi-Ripper ® or the Multi-Ripper MultiRipper Bucket ® Rips the sides and bottom of the trench flat, with no depth limitation 4 times faster than a hammer 6 to 9 times the force of a standard bucket (Twisted) Also, try our award winning Multi-Ripper Teeth Multi-Ripper Bucket TM Maximize force one tooth at a time, with our patented "Shanks on an Arc" technology. Celebrating Our 11th Year Designing Innovative Products Made In the USA! available for mini-excavators, backhoes, and excavators from 6K to 300K pounds eading "Leader in Excavator Rock Ripping Attachments" dge ttachments, www.digrock.com "theOperators Claim: best attachment sales@leattach.com ® Inc. 866-928-5800 or 508-829-4855 I ever bought!" June 2013 | Construction Equipment Distribution | www.cedmag.com | 35 32_Profit_Feature_KP.indd 35 5/31/13 2:51 PM