Much has been written over the years about value-added selling (including by me), yet there still seems to be confusion and reluctance in the industry to really demonstrate added value to our customers.
After years of conducting meetings and visiting hundreds of centers and dealers, I've reached the conclusion that most of us in the industry still lead with price and hope to raise margins later. Although this practice may work initially (after all, who doesn't like a bargain?), it rarely leads to the desired margins necessary to run a profitable operation.
We all have competitors that act the same; they always cut your bids by (insert number here) percent and you are left wondering, “How did they do that? What were they thinking? Nobody can possibly live on that deal.” But the competition seem to continually offer your customers landslide deals and slim margins over what you are selling and steal your best business, leaving you with nothing but sticks and sheets.
But maybe the problem isn't with the competition, but with how you and your sales force are presenting options and alternatives to your customers. For example: When was the last time you and your salespeople completed a true and honest assessment of your customer base, a comprehensive customer profile? When did you last complete a “truth chart” on service, as it relates to your customers? At the end of the day, what do you really do differently; what do you add to the equation that the competition doesn't?
A number of times I've walked into a store and seen an envelope with a builders' name on it containing a takeoff or bid siting on the edge of a salesperson's desk. “He told me to leave it at the store so he could pick it up later” is the typical response, followed by my favorite, “I just don't have time to present bids to all my customers.” Well what do you have time for? Because not only are you letting time slip away from you, you're letting chance sell for you. If you continue to do business this way, you'll have lots of time on your hands.
Keeping customers happy based on price can only keep them that way for so long. You need to pay attention to value-added opportunities to service your customers—even as simple as promptly hand-delivering a takeoff—that can truly make a difference. And to do this, you must know what you as an individual add to the sales equation, what expertise you bring to the table, what your company stands for, your service practices, and your performance measures. What do your customers really need, other than the obvious? How much do you know about your services, as they relate to your customers' needs? Do they match up?
And above all: What do you know about the demands of your most profitable customer that your competitor doesn't know? Answer that, provide a solution, and offer options and alternatives to price, and you will add value and ensure yourself a successful career.
Developing customer profiles is the first step to delivering added value. If you don't have a customer profile available, please contact me. I'll be happy to e-mail you a copy that is quite comprehensive and will help to move you toward a better understanding of all these issues.
Mike Butts is director of installation services for United Building Centers. 507.457.8453. E-mail: email@example.com