Issue link: https://www.e-digitaleditions.com/i/480616
30 FEDA News & Views ing a very large customer. As a trial, this large customer started buying a high- volume, low-margin commodity product to ensure our customer had the capacity to serve them. This also put downward pressure on the overall margin percent- age number. Looking back on these three insights, it appears the lower margin number we saw on the surface was actually quite misleading in terms of evaluating pric- ing performance in the pilot regions. Ironically, even though the overall mar- gin percentage number dropped, these three activities were, by themselves, all very positive. Lesson #4: Put context around the major events that impact the results. Having dissected the results in a more systematic fashion, we were armed to make a compelling case to the CEO of this distributor. Pilot regions that used our price recommendations were up 490 basis points compared with a drop in 200 basis points in the control regions. Although a few large events impacted the overall margin percentage number in the pilot region, our analysis showed these events were positive from a mar- gin dollar perspective, and the overall margin percentage change number was not reflective of how much better the region performed. We were confident the use of our solution contributed to a significant increase in margins, where it was used over where margins would have been, had it not been used. The CEO and executive team were convinced the results were positive. They gave the green light to move for- ward with the project, which went on to deliver significant margin improvements for the business. Had we not been able to articulate what happened, the project might have been deemed a failure, and the company would likely have missed out on several years of margin improve- ment. This experience gave me a valu- able perspective on how I should look at performance metrics and data results. To this day, I continue to benefit from these four lessons: Dissect your results. Start with the core—regular purchases from regular customers. Focus on what you control. Put context around the major events that impact the results. If you are facing the challenge of how to take performance measurement beyond overall surface metrics, consider implementing these lessons to make your impact clearer. About the Author Jeff Robinson serves as vice presi- dent of Strategic Consulting Services at PROS. He has over 15 years experience helping companies improve pricing, and has worked with over 100 com- panies across manufacturing, distribu- tion, and services. He has served in several additional roles at PROS over an 11-year span, including leadership responsibilities over product manage- ment, marketing, sales, solutions, and professional services. 4 Important Lessons continued