Sometimes even doing everything right isn’t enough – you need to let customers know that you are doing the right things.
Especially during a down economy when every customer is looking to shave expenses wherever they can, the added value your company brings to theirs can be taken for granted or forgotten. Customers too strongly focused on the price of products can easily lose sight of the bigger picture business relationship you have spent years nurturing.
To save a couple of dollars on a brake drum, customers may take their business elsewhere, not realizing that the additional services and expertise they are leaving behind will cost them much more in the long run.
“The biggest pitfall of selling on price is that nobody wins, not even the buyer,” says Chuck Marrale, president of One On One Sales Development, Inc. “If I beat you on price, you’ve lost the customer. I’ve gained the customer but lost margin. And, ultimately, the customer is going to expect a level of service that he was getting when the price was higher, and he won’t get it, so he’s lost. Nobody wins.”
Focusing on price alone is a no-win strategy. Someone always will have a lower price, so it is shaky ground on which to differentiate your business.
“Other than the obvious loss of operating revenue, price selling causes competition based solely on who has the lowest price,” says Tim Kraus, president and CEO of the Heavy Duty Manufacturers Association. “Price selling always spirals downward. The ability of the distributor to differentiate based on service, knowledge, support and availability becomes impossible as margins erode.”
A distributor makes a name for himself by doing something unique or doing something better than the rest. If there is a niche to fill – whether it be products or services – there will be a distributor ready to meet that market need.
But too often distributors do a poor job at promoting the products and services they provide. They may assume customers and prospects already know all there is to know about their business and they fail to effectively promote the full breadth and depth of their true value proposition.
It’s a costly mistake that can not only prevent growth of new business opportunities, but it also can lead to customers jumping ship because they don’t know what you can do for them, or what you might already be doing that they simply are taking for granted.
“Letting your customers know what value you provide is probably the most important factor for a distributor’s profitability and their ultimate sales,” says Marrale. “The key question that a distributor has to ask is what do they offer beyond the normal services to justify their price. We’re in a market that has been driven by price for so many years, that distributors
