Volume 46, Issue 6 - July/August 2007
In the news
by Larry E. Ray, an architectural consultant for GHDC Inc. in Tupelo, Miss. He currently serves as first vice president of the Association of Millwork Distributors. Mr. Rayís comments are solely his own and not necessarily those of this magazine.
The Perception of Value
Distributors Need to Promote their Strengths
Value once was such a simple thing. Real value used to be the most for the lowest price, or so it seemed to us at the time. A few years ago, I spoke to potential small business owners about the basic principles of a plan that can lead to a successful business. Rather than dwelling on the merits of a well-prepared business plan, which many of the listeners were not ready to tackle, I used a rather elementary approach that I referred to as the three proper Pís: proper product, proper promotion and proper price.
The Three Pís
I communicated to future entrepreneurs the essentials of understanding targeted markets and the necessity of providing the proper quality of product or services in order to meet or exceed those currently offered. I also explained how to add a solid market strategy, affordable advertising and promotions, and how to price goods or services competitively. When added together, this three-part strategy results in a measurable value. Today, I would admonish the prospective business owner to ask the customer what value he or she is seeking.
For example, we have a hard time explaining why we pass up a cup of coffee for 75 cents at the corner convenience store, in favor of the $4 variety across the street. Actually, the price of the coffee is hardly a factor at all. The perceived value is the gathering place that provides an opportunity for networking with friends and potential clients, not to mention that other benefit, Wi-Fi. So what about the $4 coffee and $3 muffin? Most of us would be shocked to learn our product is of less importance than other intangibles.
The Corner Stones
Relationships and trust are the corner stones of value. Proper product, pricing and service is expected and demanded. But, if we are performing the expected, then what sets us apart from the competition? And how well do we communicate our strengths?
For example, many builders value the expertise of seasoned sales professionals who often participate in design and specification to fit the project. Others value easy access to fax machines, conference facilities and showroom assistance. But none of these appears on an invoice.
For those in the wholesale trade, good customer service retains customers. One vendor stands out among all the dozens who supply our company, because our purchases are acknowledged via fax, usually within minutes, and we know that the order will be delivered as confirmed. Other vendors have equal products and prices, but we favor the established supplier who consistently performs.
One customer frequently accesses our office Wi-Fi network by parking adjacent to the building. His vehicle is a well-equipped mobile office, complete with laptop and printer, which fits his busy schedule. While this service may be important to many, it costs nothing to offeróand our customer doesnít ask for our free coffee.
While proper promotion involves marketing, advertising and an effective sales strategy, we must never forget the importance of promoting our unique differences and strengths. Wi-Fi may be great, but nothing beats connecting with the right people.
© Copyright 2007 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.