The Challenge

A specialty distributor was experiencing an undesirable volume decline compared to the previous year. They believed this decline was a result of their recent price increases, leading to their products being priced higher than their market competitors. As a response, they planned to implement price cuts to boost their volume. However, they needed to validate whether the drop in volume was primarily due to overall economic conditions, pricing misalignment, or a combination of both factors.

The Solution

INSIGHT conducted a comprehensive survey of the business’s declining and lapsed customers, revealing that the decrease in customer volume, was largely influenced by shifting economic conditions, especially for certain product lines. Furthermore, the survey provided valuable insights into the factors leading customer to purchase from other suppliers. The distributor was able to implement surgical, targeted pricing actions that addressed the underlying causes of volume decline, as well as avoid margin and revenue loss from unnecessary across-the-board price decreases.
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