1. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ 1 Strategic Pricing for Distributors TM MDM Webcast sponsored by Infor October 29, 2009 Presented by Brent Grover & Ken Brown Evergreen Consulting, LLC

2. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ Strategic Pricing for Distributors TM 2 Topics ✤ Hidden gross margin $ ✤ Take a pricing tour ✤ FAQs ✤ How to start ✤ Resources for you ✤ About us

3. 3 © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ Strategic Pricing for Distributors TM Hidden gross margin dollars ✤ Find 200 basis points (2%) of hidden gross margin ✤ See your pricing process in a new way ✤ Rethink your sales compensation plan and sales training

4. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ 4

5. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ Strategic Pricing for Distributors TM 5 A strategic pricing guided tour ✤ How strategic pricing works ✤ Transaction analytics - statistical methods ✤ Segmenting customers, products & services for pricing ✤ Analyzing pricing sensitivity by product class, manufacturer & SKU ✤ Premium & discount matrix

6. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ Strategic Pricing for Distributors TM 6 Mining transaction data base Customer Size GTM% Customer Size Desired orderly pattern Typical random pattern

7. © 2009 Evergreen Consulting, LLC All RIghts Reserved Sacred Cows of Distribution™ Premiums Discounts Average Margin Premium/Discount Matrix Margin % Customer Size Segment, Size, Sensitivity Distributor Pricing Structure 7

8. STANDARD MARGIN EXAMPLE – VARIOUS SEGMENTS average margin % for a sample sku CUSTOMER SEGMENTS STANDARD MARGIN MRO16.1% OEM18.4% CONTRACTORS24.2% REDISTRIBUTORS19.7% INTEGRATORS26.1%

9. ©2009 Evergreen Consulting, LLC STRATEGIC PRICING MATRIX example – CONTRACTORS segment margins for a sample sku VERY SMALLSMALLMEDIUMLARGE EXTRA LARGE VERY HIGH24%21%18%15%12% HIGH25%22%19%16%13% MEDIUM31%28%25%22%19% LOW33%29%26%23%20%

10. ©2009 Evergreen Consulting, LLC PREMIUM / DISCOUNT MATRIX premiums & discounts from standard margin FOR CONTRACTORS SEGMENT VERY SMALLSMALLMEDIUMLARGE EXTRA LARGE VERY HIGH +7%+3%0-7%-10% HIGH +9%+5%+3%-5%-7% MEDIUM +14%+9%+7%0-3% LOW +16%+11%+10%+3%0

11. 11 © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ Strategic Pricing for Distributors TM FAQs ✤ How much of a profit difference will Strategic Pricing make? ✤ What makes Strategic Pricing work? ✤ What does it take to get started? ✤ How long does it take to obtain measurable results? ✤ How much does Strategic Pricing cost? ✤ Are the results are sustainable?

12. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ 12 BASE CASE150 BPS200 BPS SALES$50,000,000$51,000,000$51,370,000 COGS$37,500,000 GM$$12,500,000$13,500,000$13,870,000 GTM%25.0%26.5%27.0% EXPENSES$11,500,000$11,700,000$11,775,000 PRETAX NI$1,000,000$1,800,000$2,095,000 ROS%2.0%3.5%4.1% EQUITY$7,000,000 ROI%14.3%25.7%29.9% Profit Power of Strategic Pricing Frozen

13. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ 13

14. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ 14

15. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ 15

16. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ 16

17. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ Strategic Pricing for Distributors TM 17 How to start ✤ How Strategic Pricing affects the organization ✤ What it takes to get started ✤ What is needed to succeed

18. 18 © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ Strategic Pricing for Distributors TM Resources ✤ Customer Profitability Analysis ✤ Sales compensation plan design ✤ Management & sales training

19. © 2009 Evergreen Consulting, LLC All RIghts Reserved Strategic Pricing for Distributors™ 19 STRATEGIC PRICING FOR DISTRIBUTORS Brent R. Grover Tools & Rules to Optimize Your Margin Brent Grover’s NAW Bookshelf NEW 7/09

20. 20 ✤ Boutique firm entirely focused on the W-D channel ✤ Advisors to wholesaler- distributors, suppliers, marketing groups and trade associations ✤ Strategy, growth through acquisition, strategic pricing, profit enhancement Evergreen Consulting, LLC 29525 Chagrin Boulevard, Suite 214 Cleveland, OH 44122 (216) 360-4600 brent@evergreen-consulting.com www.evergreen-consulting.com