New Product Line: Creating a New Market

The Problem:

An existing client of Xenon arc’s Xa-DIRECT solution was introducing a new product line to market.  The producer’s product management team needed to test the line up in a carefully managed manner before introducing it to strategic customers to work through any significant performance & application issues, with the goal to accelerate the commercialization of the line without compromising performance or market adoption.

The Solution:

The producer worked with their dedicated Xa-DIRECT team to identify and engage a group of non-strategic customers in a trial process.  The initiative was designed to accelerate the development process by having the Xa-DIRECT team gather qualitative and quantitative performance data.  The data was used to identify any potential product selling points or recommended formulation changes before commercialization.  The team provided trial & testing support, quantitative performance analysis and formulation recommendations to the producers product development team.

The producer selected the small-to-mid-sized business (SMB) segment of customers as SMBs are often able to trial and test more rapidly than large, strategic customers. It was optimal for the producer to leverage the, data-driven and SMB-centric approach of the Xa-DIRECT team to execute the initial trials.

The Benefits:

The product was commercialized in an significantly accelerated timeline with successful results.  Product line sales topped $1M within the first year, with the Xa-DIRECT team sales representing greater than half the new sales volume.  Adoption of the new products within strategic accounts was swift as the performance characteristics developed during field trials proved exceptionally valuable to the market.

Driving Growth: A Comprehensive Solution

The Problem:

An industry leading provider of industrial process fluids, our client historically serviced a fragmented marketplace comprised of nearly 50% small-to-mid sized business (SMB) customers with diverse and complicated needs. They had historically experimented with different, focused models yet none moved the needle on either the growth or the efficiency of the business.  Furthermore, our client learned that a large portion of its sales team’s time was spent on low impact customer needs, pulling vital resources away from its strategic customer base.

The Solution:

Xenon arc configured a solution aimed at the specific requirements of our client’s defined market, leveraging the Xa-Direct solution, including the technology tools, technical resources and business processes needed to more effectively and efficiently reach the SMBs they were targeting. 

The producer transitioned 200 customers, and 2000 orders/year to Xenon arc.  Xenon arc created an aligned brand, a dedicated ERP/CRM system, and dedicated 7 commercial resources to support and grow the business through targeted growth campaigns with SMBs and in non-core markets, bringing their products and services directly to smaller, niche customers.  Products, services, branding and messaging were now all 100% aligned with our client’s marketing and service strategies.  In addition to the marketing and sales focus, Xenon arc focused on improving business processes and demand planning visibility. 

Benefits:

This alignment, in addition to the improved business intelligence and market insights, dramatically increased customer base by nearly 3x in just 18 months. The supply chain and operational efficiencies led to gains measured in the hundreds of thousands of dollars.  Furthermore, our client achieved other gains including over 100% improvement in batch size optimization – which alone was more than enough to off-set the initial investment in year one.

The business team has grown to serving over 1000 accounts, processing over 3000 orders per year and has increased annual revenue by over 50% since inception.   In turn, Xenon arc buys in exclusive TL quantities and has significantly reduced resource demand in Technical Support, Service, Manufacturing, Sales and Logistics – enabling the producer to refocus on strategic targets.

By bringing coherence to the channel, Xenon arc enabled our client to concentrate resources on its strategic market segments.  Channel conflict with distributors over issues such as pricing, inventory and jurisdiction have been greatly reduced.  And processes that needed to accommodate both large and small customers are being redirected to serve the market segments with the greatest impact – all possible because Xenon arc’s expertise in understanding and delivering SMB-focused solutions.  Our client achieved out sized growth in what was an otherwise stagnant category, increased its focus on its core customers while achieving tangible cost savings.

Improving an SMB Offering: Increasing Total Addressable Market

The Problem:

A globally recognized manufacturer produces a group of products for the baking industry.  The product is packed-out in 8-pound boxes, yet the minimum order quantity was 2,000 pounds and customer lead times were 4-6 weeks.  Manufacturing facility operations were focused on handling the needs of their large, strategic customers, and our client didn’t have the capacity to make changes, but recognized that the current offering was far out of line with the needs of most small to mid sized bakeries, leading to overall year over year declines.

The Solution:

Xenon arc stepped in with the Xa-DIRECT solution and changed the dynamic.  The producer transitioned 150 customers, and over 2500 orders.  Xenon arc created a dedicated team of 5 industry experts, including a food technologist to support customers. To help simplify facility operations, Xenon arc supplies our client with long range purchases plans.  Furthermore, Xenon arc purchases product in truck load quantities and over time, has built an inventory position.   

The Benefits:

For the small-to-mid-sized business customers, their service levels improved dramatically.  By putting in place a customer-centric inventory strategy, and dedicated business team, Xenon arc was able to reduce customer-facing MOQs to as low as 2 pounds and improve lead time to a 24-hour turnaround. This change has meaningfully changed the efficiency of manufacturing and the growth trajectory of the business – leading to consistent year over year growth.  

In the end, by reducing complexity and facilitating better resource planning, our client was able to meaningfully reduce costs while, more importantly, expanding the total addressable market for their products and improving service levels to all constituents.