Liberty Coca-Cola Beverages was formed in the hot summer of 1900. The company’s first deliveries were made with a horse and wagon. During the next summer, 10 cases were sold – only one for cash. The rest were given to stores on the promise that if the beverage sold, the founder would return with more Coke and a contract.  

In its 100+ years in business, the company changed ownership several times, but the driving goal of the business -to remain true to the brand and to the city of Philadelphia- remained strong. Since then, the bottler has become the single largest bottling facility in North America. It produces over 30 different beverages and the company sells nearly 32 million cases of product each year. The operation is comprised of two manufacturing facilities and six sales centers in Pennsylvania and New Jersey.  

In the late 1990s, Liberty Coca-Cola Beverages found itself at a crossroads. Like many bottlers, as margins began to erode, they found themselves to be information-challenged. They were collecting a lot of data in disparate silos, but the ability to connect information, analyze it, and act quickly was severely hampered by those silos. The sales team was at a particular disadvantage.

Distribution companies like Liberty Coca-Cola Beverages use a variety of techniques to motivate their sales teams and their customers. Typically, promotions, special incentive pricing, and billbacks combine to determine the final sales price. And it was not uncommon for customers to receive separate invoices for different products all delivered by Liberty Coca-Cola Beverages.  

Overall, the management team had no access to customer information – Who is profitable? Who isn’t? What can we do to improve profitability? The sales management team was operating with an inefficient reporting system and there was no way for the team to see the results of their efforts.  

Faced with these challenges, the management team selected the Margin Minder® Trade Management System from Salient Corporation as the solution to their hunger for sales data integration and visibility. What they received in return was the ability to understand and manage critical business processes as the system evolved and their confidence in its ability to deliver bottom-line value to the organization grew. 

In 1996, there was only a limited, home-grown sales reporting system at Liberty Coca-Cola Beverages. The solution was cumbersome with no easy access to the wealth of data inside it. Information analysts inside the company used the system extensively every day and tried to support the field sales teams with a combination of static reports and custom reports as necessary. The sales and management teams were isolated from the information that could make their efforts much more effective and profitable. When the management team wanted to see results, it required IT assistance and a couple of days wait.  

When the call did go out for a review of the sales effort, IT and Finance staff members typically went to work on the reports, gathering information from the available systems, reconciling the numbers, and sifting through detailed information to find the pieces of critical data. When the smoke cleared, the reports were generally at the 30,000 feet level, and only available to the top-level managers. This left the front-line sales team alone in the wilderness without a map or a compass.

The Liberty Coca-Cola Beverages management team evaluated their options for solving their twin eroding margin – information deficit problems. They turned away from what seems to be a common solution in this kind of environment: drastically cut spending to save your way into prosperity. 

“It’s an easy thing to say that you are going to save your way into more prosperity,” remembered Gary Peterson, Director of Planning. “When what you really need to do is to grow your way into prosperity.”  

The team set about installing a solution that would solve their data visibility challenge by keeping the systems they had, but finding a way to customize the output and put it into the hands of everyone who needed information to make the right profit decisions. They selected Margin Minder from Salient Corporation to meet the challenge. 

Margin Minder was implemented with the original home-grown applications as data sources for the new solution. Margin Minder proved its value very early on. Immediately, the team was able to see sales volume, revenue, and margin. Access to the information was given to the entire sales force and the senior management team. Giving access to information was a major philosophical change for the organization, not because they didn’t want to share the information earlier, but rather because it was too cumbersome and slow to disseminate the information. The team heavily relied on the system to track margin level by sales rep, branch, and brand.

In 2004, Liberty Coca-Cola Beverages upgraded to Margin Minder MAX® Integrated Enterprise Performance Management System, based on the Salient’s UXT® technology. MAX gave the team the ability to see margin and profit with even more clarity. No longer limited by invoices alone, they were able to quickly see the gap between gross margin and bottom-line profit after all other costs were considered. 

In preparation for introducing the new capability, the Liberty Coca-Cola Beverages team worked with the Salient Client Services group to identify the key productivity indicators (KPI) for Liberty Coca-Cola Beverages. The group spent time understanding the most important goals of the organization and mapping those to individual sales team members. Deciding which pieces of information to bring into the application was the easy part, according to Peterson. 

“Because Margin Minder has no limits to the amount of data it can move quickly and easily, we could bring everything we had into the application. We didn’t have to agonize over which information and systems to include. We just brought everything. We figured that we would find a way to use it later on,” Peterson recalls. 

“After we installed Margin Minder MAX, our eyes were really opened,” explained Chris Konyk, Sales Systems Manager. “When we first used the original Margin Minder system, we were only sales-focused. With MAX, we have access to everything and anything that has an impact on our margin. Our view of dimensions became endless. Now we can look at service calls and drivers for instance. We have a lot of things that are measured and it’s easy to understand each element and its impact on margin.”

Liberty Coca-Cola Beverages continues to use several manual systems in daily operations that make sense to leave in their current state. It would be too costly and time-consuming to recreate the processes, but the information from these systems is easily included in Margin Minder MAX with the allocation features of the product. 

“Margin is our mantra,” continued Peterson. “Without Salient and Margin Minder MAX, that wouldn’t be possible. From the beginning, we gave everyone access to as much information as possible. We found that it’s at the street level — the detail level — where the big gains are made. Every sales guy can look at exception reports and clearly see where the challenges are and they can make changes quickly and easily without a lot of overhead.” 

Liberty Coca-Cola Beverages uses the system to look at delivery costs per customer to ensure that the routes are optimized. They are also tracking assets, including the cost of spare parts, product delivery, travel, and labor. The team analyzes full-service machines and tracks chronic machines that require repair. They also have the ability to look at one customer and get a complete picture of the profitability of that account. Previously, separate product invoices, promotions, bill-backs, off-invoice agreements, and services made the picture too complicated to understand as quickly as the answer was required. Now all of that information is available at a glance. Questions about detailed activities can be answered in seconds with just a few mouse clicks. 

Populating those spreadsheets took about 1 month to complete. With MAX, that work is completed in one day or less and it is widely distributed to the management team — including the ability to drill down and understand the complete picture. All this work was made possible because all of the information is in one place and pulled into the budget application without any re-keying. 

Higher-level, more routine reports are available to all team members at any time of the day or night. Where the team used to rely on once-per-month spreadsheet reports, all of the information, with supporting details ready for inspection, is available the moment it is needed.

As Liberty Coca-Cola Beverages has progressed through its 10-year ownership of the Margin Minder product, they have had the chance to refine their sales compensation models to reflect the greater accuracy they achieved using the product. Using the allocation features of the product, they have been able to hold people accountable to a lower level of operating profit. Just as important, those people can see the data for themselves and can make adjustments based on the continuous feedback of results that are available to them at any time of the day.

The system is easy to maintain, with the duties being shared between the Finance team and the IT staff. According to Peterson, support requires approximately 1 full-time equivalent to provide services to the entire organization. “We absolutely rely on Margin Minder and system reliability has been excellent,” Konyk said. Of course, the main objective for any performance management solution is increasing profitability and Margin Minder regularly proves its value. For example: 

In the first quarter of 2005, the management team analyzed the profit after services costs for 500 accounts. What they discovered was that 150 of those accounts were generating a negative margin of $30k for the quarter. With a little more analysis, the team found another 90 accounts with assets that were costing the company $10,000 per quarter. Before the analysis, these accounts were thought to have been profitable. Because Margin Minder can quickly analyze and display any information available, Liberty Coca-Cola Beverages was able to use repair cost data to identify 300 unprofitable full-service machines deployed to the field in the first quarter of 2005.  

“Margin Minder empowers everyone in the organization to make more intelligent decisions. It gives managers the visibility to spot exceptions and then work with the team to improve the situation,” Peterson said. “Simply put, Margin Minder helps us run our business better.”