There lies, in the relationships you have with your customers, an opportunity to increase profits by developing products that could become important profit centers.
Commodity relationships with customers is probably the greatest frustration experienced by sales staff world-wide. Day in and day out, your sales teams are bombarded with the demand to deliver the lowest price per product. Over time they are demoralized and endeavor to define their relationships with customers solely based on price and have hanging over their heads the reality that the customer will jump ship if you can’t deliver on lowest price EVERY time. You’ve heard it out there – “There is no such thing as loyalty anymore.” This is a symptom of a priced based customer relationship. Retails are burdened with this type of degrading relationship as a result of their own misguided efforts. In their short-term focus they will “match the competitor’s price plus 10%” or “we will not be undersold” or “lowest everyday pricing” – it’s a never ending spiral down to micro margins. The worst effect of this is that you find yourself never building any relationship with the customer based on service or solutions.
Many situations especially in the industrial world are hinged on the fact that the product is priced fairly at the lowest price with a reasonable expectation of profit. Given this, the best way to increase revenue is value added services.
Try these tips to increasing the “value added” opportunities within your business to business relationships:
Break down barriers. What is the most common irritant to closing a sale? It may be a delivery, timing or cost issue. Can you creatively sole the problem and provide a monetary benefit for doing so? If the project can be delivered faster for an additional fee, would your customer pay for the privilege? Furniture stores use deferred payments and low monthly payments as a barrier breaker and add substantially to their bottom lines.
What could make your product better? Is there something you can do that compliments the delivery of your product? You may be unable to get more dollars for your product, but many times there is an
opportunity to compliment the product with additional services that the customers will find valuable and be willing to pay for. The solution could be something that helps them get the product to their market.
Education. Knowledge is golden. Use your web presence as something more than abrochure. If you provide valuable information of use to your customer, they may pay a fee to acquire it. Market data, how to’s etc. – anything that the customer could use to increase their sales.
Training. Is there an opportunity to teach the customer’s sales staff to better sell your product to their customers? With the intimate knowledge you have of your product, you could provide valuable sales aids and promotional materials the customer could use. Charging for this assistance adds value to your services. Maybe the training involves the use of your product.
The point is that anything you can add to the delivery of your product or service adds to the power of your brand in the eyes of your customer. If it differentiates your brand than it goes a long way to making your company very valuable to your customer. The relationship is strengthened in the process and you stand to increase revenues to boot. Anything you can do to increase brand relationships will help the sales staff avoid being viewed as just a commodity and this results in their increasing their net worth also.
Everybody wins in the long run.
