Prevent your customer from seeing your product as a commodity

Guest post by: John Brennan
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Adapting to Technology and the Internet - By John Brennan

The first step in problem solving of course is to define the problem in customer terms. For example, perhaps you distribute office supplies to small to medium size retailers. Your customer is a regional office supplies retailer who has just opened two new stores , for a total of seven , and invites you to bid on supplying note pads. You have positioned yourself in the market as the supplier who provides solutions, not the one with the low cost products. So you ask a few questions about the supply chain.

You: Who's your internal customer for our note pads?

Customer: The paper supplies manager in each store.

You: What are the challenges they face today?

Customer: Move more product.

You: How are they going to do that?

Customer: Don't know. Got any ideas?

You: a dozen but they are only half baked. What do their customers, the consumers want?

Customer: Low price.

You: I understand that you offer the full range of note pads from the major manufacturers. I'm not interested in getting into a bidding war with my competitors, but I'd like to earn your business.

Customer: Then give me your best price.

You: What if you and I could help your department managers move more product? That's the ultimate goal isn't it? Is that what your performance is measured on?

Customer: Well, yes, and I have to show savings too.

You: So here's my idea. I supply you with note pads that will give your department managers something fresh to promote. I can't guarantee it but they should be able to improve their volume as a result.

Customer: Fine but I have to have low price.

You: Of course. The fresh idea is to put your label on the note pads and sell them as a new, high value, house brand, at a price significantly lower than my competitors. It will create a buzz, and your managers will easily beat their targets. Now to get the low price you have to make a trade off, in this case it will be thinner sheets, but still good quality paper. This solves both problems, right?

Customer: It might. It's worth a shot. What's your price?

You: $XXX, which is about 10% lower than you'll find anywhere. And that's with your brand on the product. Of course you should probably double the quantity, because your managers and your price sensitive customers are going to love it.

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Adapting to Technology and the Internet - By John Brennan

About the Author: John Brennan

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John Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses.
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