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If you have not found a way to reposition your relationships with customers, one where the customer is extracting more value than in the past, the odds are good that either your competitors or your customers have repositioned that relationship for you. Clearly, it has been well-proven by many businesses that it's better to manage your destiny.
Many distributors have made drastic changes in the how they've positioned in the marketplace. Some have reduced the number of products and suppliers represented. Others have narrowed their customer segments but extended the products and services offered into specific, profitable niches. Few distributors have had the luxury of maintaining the status quo in how they go to market.
Two key questions: How and where do you focus your resources to reposition your relationships with customers? How do you extend your current customer relationships into deeper ones, where you increase the value your customers receive as well as your opportunities for higher dollar volume and profitability?
The term "value-added" has become a clich' in many industries to mean almost any additional service offering or enhancement to a product. It's valid to ask why distributors need to define what value-added really means. After all, customers vote with their dollars if an added service has value or not.
It's essential in the current marketplace to create a differentiated offering to consistently be chosen as the preferred supplier. Customers increasingly call for deeper relationships with fewer suppliers. Unless you make careful choices about how you develop your differentiated offering now and into the future, you risk spreading your resources too thin to effectively manage a more complex offering than traditional product sets of the past.