Answer: Complexity & Scale
“Customer-Item Combination” is a term that describes how many pricing decision you might make based on the number of customers you have and the number of items you sell:
If you have 32,201 SKUs in your inventory, and you sell to 4,099 Customers, you have 363,700 Customer Item Combinations. These kinds of numbers mean more, and more complex, pricing decisions facing distributors every day.
No Wonder Sales People Can’t Keep Up
Sales people spend the bulk of their day pricing only the most competitive items, as they should. However, this means you are likely leaving money on the table for nearly a third of your customer-item combination sales – the third that is less price sensitive.
Taking control of your pricing means identifying those customer-item transactions that are less price sensitive and setting prices that maximize margin on those items at the management level. Do that, and your sales force is free to concentrate on the customer-item combinations that they do best while you increase your bottom line on incidentals.