Know Your Value

Can you identify how your company is different from your competitors?
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I recently had the opportunity to have lunch with Bruce Merrifield, one of the industry’s leading consultants. Bruce has spoken at many industry conventions and meetings and is always controversial. He constantly challenges the status quo of distributors in the way they conduct business.

Bruce described a presentation he made at a national distributor sales meeting in which he challenged the salespeople in the audience to really define the value of what they were providing customers. With the premise that some products are comparable in price, he recommended that salespeople ask themselves (and their customers) are you really worth one or more points to the products you are providing? And can you successfully add another point for the services your company provides in addition to your products?

Many distributors aren’t able to do so because they can’t point to the differentiators that make their company better than the competition, says Tom Reilly, a sales expert who has trained thousands of salespeople over the years.

Reilly points out that some studies have shown that more than half of distributors can’t immediately explain what makes them stand out from the competition.

\”I’d say the numbers are probably even higher than that and possibly could reach 3 out of 4,\” he said in an interview. \”If you can’t show how your company differentiates itself, how can you possibly charge more for your product than your competitor?\” he asks.

Reilly suggests that distributor salespeople should put themselves in the buyer’s position. If you’re getting proposals from two different companies with price being equal what will cause you to make a buying decision?

That differentiation could include items such as technical assistance, training, installation, 24-hour delivery, extended terms, product support, and freight allowances or returned goods policies. But many distributors bundle those services in order to make a sale and the customer is only too willing to accept those \”extra\” services they’re getting for free and then shop it to another distributor.

Defining your value (and believing it) is critical to your company’s success. If you’re a sales manager, have you ever gone on a call where your sales rep makes a presentation and ends up defining value in his terms rather than learning what the customer perceives as value?

Knowing how your company is different from your competitor and using that information to your advantage will ultimately lead to additional sales. But it’s up to you to find out what your customer sees as value and determine how you can make that a differentiator between your company and the competition.

Jack Keough is a contributing editor to Modern Distribution Management and the owner of Keough Business Communications. He can be reached at jack@mdm.com or by phone at 508-734-0029. Keough is the former editor of Industrial Distribution Magazine.

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