Securing $20M in strategic margin protection through AI-driven SPA optimization for a $600M PE-backed Distributor.
Margin Protection
$20M
SPA Coverage Growth
+25%
Manual Effort Reduction
45%
In wholesale distribution, margins are won and lost in the details of Special Pricing Agreements (SPAs). For this $600M PE-backed HVAC and plumbing distributor, reliance on scarce, manual resources to manage complex, multi-tiered vendor rebates resulted in massive value leakage.
Missing or suboptimal SPAs meant leaving vendor dollars on the table and sacrificing competitive pricing power in the market to maintain and grow revenues. Condensed Matter identified that the organization lacked a deterministic method to segment customers and align them with optimal rebate structures, leading to inconsistent negotiations that artificially constrained scalable revenue growth.
We deployed an agentic solution featuring both distribution and data science capabilities, focused on optimizing SPA placement across the entire customer base and generating actionable recommendations for account executives. Our Forward Deployed Engineering (FDE) team started with a hierarchical clustering algorithm that ingested massive volumes of historical supply and purchasing data. This algorithm created highly accurate "look-alike" models to instantly flag missing or suboptimal contracts and send recommendations to sales teams in real-time.
To operationalize these insights, we engineered an "AI Contract Strategist" agent. This virtual assistant armed sales and pricing teams with data-driven "evidence packages," enabling them to systematically secure highly profitable agreements. Ultimately, this initiative not only optimized vendor-customer contracts and inventory positioning but also established the foundational data architecture required to scale AI capabilities enterprise-wide.
"By deploying AI to segment our customers and pinpoint missing rebates, we armed our teams with data-driven evidence packages. We didn't just negotiate better; we mathematically enhanced our margins."
— Commercial SVP, $600M Distributor
