Typically, SPA contracts take a shotgun approach in order to avoid complex administration. Customers are offered broad and deep discounts that do not target their true pricing concerns. As a result, manufacturers and distributors both decrease their profit levels unnecessarily, rather than selectively maintaining a competitive edge on those products where it is needed to secure a customer’s business while maintaining a more profitable position on those products where it is not.
Our SPA Control Module enables a distributor to monitor the performance of their SPA contracts, as well as the effectiveness of their current pricing strategy.
Common SPA contact issues
- Too many items discounted on the contract
- Little to no strategic pricing in place for high volume and/or low volume items
- Little to no differentiation between large and small customers
- No customer segmentation
- No proactive management of the contract
- Discount opportunities not relayed to customers
Review Contract Performance
Focus on areas of inactivity
Identify sources of Price Erosion
Impact and Results
Our SPA Control Module has generated gross margin improvements ranging from 4%-10% on SPA sales.
To start managing your company’s profitability more effectively, we suggest a first or initial step of utilizing our SPA analytics service. We prescriptively analyze each of your SPA contracts against several key measures, making recommendations that will measurably improve both the effectiveness and the profitability of each SPA contract.
Increased visibility is available through our web-based reporting platform, creating an ongoing culture that monitors, measures and controls profitability on SPA contracts.