Department of Mathematics

Herman Miller, Inc.

Proposed Project for the MSU Industrial Math Students

From Potential to Profitability: Key Indicators of a Winning, Profitable Opportunity

About Herman Miller:

Innovative business practices and a commitment to social responsibility have helped establish Herman Miller as a recognized global leader in the office furniture industry. Herman Miller’s inspiring designs, inventive technologies and strategic services help people do great things and organizations perform at their best. The company’s award-winning products and services generated approximately $1.8 billion in revenue in fiscal 2013.

Background:

Within the past two years, Herman Miller, Inc has created a Pricing Analytics capability. The Analytics team is charged with conducting advanced analysis of all contract pricing data and other relevant data, in order to develop a greater understanding of each sales market. With this understanding, the team can then recommend appropriate pricing ranges, and deliver specialized knowledge to key stakeholders. The team has developed robust databases to capture relevant data, and has implemented performance metrics to ensure successful application of more effective pricing strategies to maximize revenue and profitability. Included in the current metrics are measurements for contract types, product mix, opportunity size mix and fulfillment of opportunities. The metrics are available for pricing requests and for actual volume.

Recently, Herman Miller implemented new Customer Relationship Management (CRM) software. The system manages the global sales teams’ interactions with current and future customers. The goal of the new CRM is to effectively turn more opportunities into wins through increased collaborations, share customer account knowledge and strategic selling methodologies. Many customer attributes are captured in the opportunity records.

Project:

The objective of this project is to assess which customer attributes are driving factors for predicting opportunity wins. Once those winning attributes are discovered, it should be determined if there is a correlation between those factors and the pricing that is offered – in other words, are those attributes also predictive of a profitable winning opportunity?

Analysis would focus on, but is not limited to, Key Performance Indicators (KPIs). KPIs are the method of assessing the status of a focused sales opportunity. Although a subjective measure, KPIs are based on research about sales effectiveness and create a common language across the global organization. Other attributes may also impact the win rate of opportunities and should be examined, including activity types (such as Performance Environments, Client Visits, Mockups, and Architectural and Design Firms), customer types and regional variances.

Once the winning attributes are identified, those key drivers must be joined with pricing information to determine if those wins would maximize revenue and profitability.

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