Strategies For Success
Getting away from "Me Too!" (and a penny less...)
With continued pressure on margin enhancement, manufacturers, distributors and end-users have to look at being more innovative in the ways they go about their day to day business. Competition, low cost imports, "Contract pricing", "Value-Cut" products, the internet, etc. have made the market today harder to navigate than in the past.
The only thing that is still the same is the old adage of "If you live by price you will die by price."
Successful businesses find a way to differentiate themselves from the competition so that they can get away from the "Price, Price, Price," scenario. Of course one has to offer value, but the value can be in the “Cost” versus the "Price" of a product or service.
The ideal partnership between vendor and customer is where the vendor can analyze a customer’s problem and prescribe a solution that satisfies everyone.
A typical "Cost" versus "Price" scenario is the customer, who under pressure to cut costs demands lower pricing from his vendor for the same product that he is currently using. This forces the vendor to look at cheaper alternatives. This could be a lower quality item. It could be a "Value-Cut" item. Or it could mean lowering margins.
None of these solutions are really acceptable to any of the parties.
Successful sales professionals try to look outside of the box.
Example: "Folded versus Roll Towels".
Most experienced sales people are familiar in the concept of switching from folded to roll towels but it is still common to hear "I need 'X'" amount of dollars cost for a case of bleached multifolds to save this account from going to another vendor.
The lower "cost" might mean poorer absorbency from a lighter weight towel; or an imported towel that is cut so small that it falls out of the recessed dispenser all over the bathroom floor or comes packaged so that the towels are crushed, etc.
The "price" value proposition is to convert the customer to hard wound roll towels which depending on the case normally will offer at least 20% "cost" savings in product and labor.
The consultive salesman will always win the day of the "Me too, penny less" order taker.