Volume 47, Issue 7 - September 2008

AMD Headlines
by Don Houghton,

Creating Value
You’ll Stay Ahead if You Cater to Customers
Our industry continues to suffer through difficult times with the time frame for a “turn-around” varying according to the pundit to whom you listen. There is no doubt that certain areas of the country are being hurt worse than others. It is interesting to me that in these trying times, there exists considerable disparity among manufacturers, distributors and dealers in regard to their level of business. I would suggest that those companies doing above the norm are creating significantly more value to their customers than their competitors.

So what is value? The answer to that question will vary depending on the customer needs being addressed. Manufacturers, distributors or dealers who do not understand their customers’ businesses will have a great deal of trouble creating value for them. The ability to differentiate your company from the pack will require a strategy to offer products and/or services that are not being provided by your competitors.

Focus on the Customer
Dr. Adam Fein of Pembroke Consulting Inc. says in regard to being a successful distributor that “distributors must become the agent of the customer, not the manufacturer.” Regarding innovation, he goes on to say that “the development and adoption of new services, new business practices, and new ways of adding value—is the key characteristic of higher profit, faster growth distributors.”

“The understanding of your customers’ business[es] and their problems requires a high level of disclosure, trust, truth and support,” according to Larry Wilson, author of “Stop Selling, Start Partnering.” He further states that “really working together will require a blurring of the lines between organizations.”

This thought process is not easy for oldschool thinkers. The ability to really understand your customer’s needs will enable you to present a total solution and hopefully will go a long way in growing a long-term relationship mutually beneficial to both companies. Mack Hanan, author of “Growth Partnering,” states, “The mutual objective of every partnership must be to maximize a customer’s growth. When a supplier and a customer partner together, the customer’s growth must come first.”

In the Fast Lane
The fast-changing dynamics of our industry caused by the world economy, technology, product innovation, etc. has made the three-to-five-year business plan obsolete. Twelve to eighteen months is probably a realistic planning period. Speed in every aspect of business is paramount. Tactical decisions that must be elevated to the top of any organization will not work. The command and control system is dead. Empowerment of decision-making at the lowest possible level will prevail.

Product differentiation has become increasingly difficult, thus putting the oneness on value-driven companies to create services in order to stand out. People become the difference. Good people will work for good companies that will let them become involved and also empower them. These companies will have excellent programs to hire, train and retain the very best people.

If your customer needed someone to help them grow sales and profits while reducing headaches, would they call you? The ability to reinvent yourself and provide solutions truly of value to your customer will certainly differentiate your company. The value created will be equal or greater than the price. You must become the consultative solution provider that your customer looks to for solutions.

Mack Hanan in “Sales Shock” sums it up best when he writes, “Consultative selling sells the improved profit dollars of the intervention of the supplier in the customer’s operation. There is nothing harder in the sense of firmness than dollars. Every consultative sale is based on a dollar value that is committed to the customer…”

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