I had an interesting conversation on a flight from Detroit recently. I sat beside a professor from one of our Midwestern universities who is in charge of a logistics and supply chain management studies group. After listening to him, I've decided to change my title to professor. I learned academia has discovered that, in order to serve a customer, you have to meet that customer's needs for on-time delivery of your product and service. Also–and prepare to be startled here–deep thinkers have concluded that each customer's needs may be different; the same product/service/delivery solution doesn't necessarily work for every customer.
You can fit me for a mortar board now because I've been advocating those concepts for years! But wait, there's more. The professor continued with what quickly became a lecture, during which he pointed out that service was outcome-oriented, not activity-based, and that with the right solutions in place and proper outcomes managed, the actual price of your product or service becomes less important.
Well, you don't say.
Also revealed during his talk: Cost-based solutions–i.e., providing the lowest cost to every customer–often miss the real target of addressing the customer's core needs. Darn, where have I been all this time? The professor then explained that, ultimately, customer satisfaction was dependent on your customer's perception of the value received, not on your opinion of the value of your service.
OK, pardon my sarcastic approach, but I was quite amused that the hallowed halls of academe are just now discovering what we in the real world, and especially in the LBM supply business, have known for so long.
Critical to this entire conversation (and our overall mission) is that it is our responsibility to discover our customer's core needs, and in so doing, help the customer come to terms with what he/she needs. In many cases, that customer is unable to articulate those needs, which means we have to become experts at drawing out this information. We do this by carefully and completely qualifying the customer–asking questions that assist in uncovering the customer's actual needs.
My seatmate even addressed this last issue, but he didn't use the word "qualify." He explained how, through a careful analysis of the customer's core business, certain facts become obvious to the observer. These facts, coupled with the proper questions, assist the customer in voicing a need for a particular product or service. Further, the professor began to discuss how the supplier could then present a value-based proposition that had the customer's best interest in mind, as well as provide acceptable margins to the supplier.
So, on a two-hour flight, I received from an academic an outline of those same issues that we discuss every day in our yards:
- How to identify exactly what your customer wants and needs.
- How to make that customer realize that your company has a unique solution to those desires.
- How to then provide product and service, at a fair market price.
- And how to do it while generating sufficient margin to maintain our business.
Does this sound vaguely familiar to you? I sure hope so. It's our business model in a nutshell. And to think that some young, enterprising student somewhere is going to walk across a stage, receive a diploma and think: "I've got all the answers, right here, right now." Oh, you poor child.
Mike Butts is director of installed sales at Stock Building Supply. 517.256.9337. E-mail: email@example.com