Products might be the same, but service is what can set you apart
By Marcia Gauger
for SBT
Question:
I often hear talk about stressing value to differentiate products and services, but how does that apply to commodities? The products we sell are absolutely no different from those distributed by anyone else. All we have to compete on is price.
Answer:
Don’t get hung up on the product itself. You need to think about what you do for the customer. For instance, when we purchased a new copy machine for the office, we could have purchased the exact same brand and model for less than what we paid from a number of distribution sources including the Internet. However, the company that we chose added value by offering advice that we needed regarding networking the machine to our computers and other computer-related issues that we were facing.
Even though we paid thousands of dollars for the machine, the company we engaged is in the business of selling service, not machines.
Make a list of everything you do that adds value for your customers. That is he first step in differentiating yourself. If you can’t list anything, you might want to consider another line of work.
Consider the value that you bring to your accounts from a customer’s perspective. For instance:
Sell the product of your product – For instance, if you were seeking the assistance of a lawyer to compose a will and trust for you, you would be buying the product of a product. A will is a fairly standard document, a commodity, if you will. However, you are not buying the product itself, or you would do it yourself on the Internet. You are buying the service and advice that you receive from an expert.
Stress what the product does for the customer, not what the product is. The better advice you give, the more value you will add in the customer’s eyes.
Next, quantify the value for your customer. For example, if you indeed can show better response times from what the customer is accustomed to, quantify what that means to the customer. Use the customer’s figures. If you are able to provide just in time delivery, how much does that mean for that particular customer in terms of saved inventory costs?
Define value for each customer individually. The problem with the word "value" is that it means different things to each customer. Stressing what you think may be important to one may not be to another. Some customers are strictly price shoppers and won’t give you the time of day. Others value expertise and welcome your advice. Somewhere between those two groups are customers that don’t know what else to ask about except price, and, given the opportunity, will share their aches and pains.
Find out what’s important to each client and stress value accordingly. For instance, the last time we bought computers for the office, one of my business partners tried to convince me to invest in flat-screen computers. While that feature just seemed like added cost to me, it was a significant value for my partner who was having trouble seeing the screen. Value is almost always measured in terms of increased time, decreased time, increased profits or some other personal pain or goal.
Don’t dwell on the competition. It is valuable to know how the customer feels about the competition. But your focus should be on what you can do for the customer, not how you can outdo the competition.
Reduced price is not value – Anyone can cut his or her price. If you are relying on price cuts to gain business, be prepared for high turnover in your accounts. A request for quote is the customer’s way of saying, "I see no difference in what you offer from anyone else". This is the starting point for you to discover opportunities to help the customer and provide value. You may simply say, "I would be delighted to provide a quote. Let’s get together so I can provide an accurate quote by better understanding your needs."
Marcia Gauger is the president of Impact Sales, a performance improvement and training company with offices in Wisconsin, Florida and Arkansas. You can contact her at 262-642-9610 or marciag@makinganimpact.com. Her column appears in every other issue of SBT.
April 26, 2002 Small Business Times, Milwaukee
