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Ever heard someone say, "Let's separate the wheat from the chaff." It's an old-timey expression that means keeping what has value (the wheat) and trashing what has no value (the hard, outer chaff).
Tough markets have a way of literally turning companies into wheat and chaff. It's already starting to happen. So, not surprisingly, many service providers are beginning to ask two important questions: How do we maintain our value? And how do we avoid getting trashed by the slowdown?
For multiple system operators (MSOs), competitive local exchanges (CLECs), wireless carriers, or other types of service providers, part of the answer is to carefully assess current conditions. If revenue growth is low to flat and large suppliers are using newfound pricing power to squeeze your bottom line, something has to change.
We advise clients to tackle both the revenue and expense fronts. For example, a pricing expert can advise you on product-pricing issues and steps for crafting an overall pricing strategy. And a product expert can review how you are managing your entire supply chain. Such a review normally includes detailing spend by product and vendor, benchmarking against best in class pricing, identifying expense reductions, and renegotiating vendor contracts to achieve and implement new savings.
Optimizing pricing and service delivery can have a positive affect on customer churn and satisfaction. Understanding and mapping churn to customer segments can facilitate the targeting of scarce resources and activities that promote retention.
Of course, companies that act sooner – rather than later ‐ are in a much stronger position to optimize costs, maintain margins, and improve competitive advantage for when the market turns around.
Want to find out what steps your company can take to stay healthy in a down market? Contact Tim Wise at tim.wise@advocatenetworks.com or Gerry Carson at gerry.carson@advocatenetworks.com to arrange an initial consultation.