Add value to the equation
Impress customers with a selective distribution policy, meaningful training and more
By Robert D Hollaender II -- Industrial Distribution, 6/1/1999
To be successful in the current industrial marketplace there is a need to bring added value to the equation, whether you are a manufacturer, a representative or distributor.Today, manufacturers are expected to provide on-time delivery, customer service, marketing services, point of
purchase and online capabilities. It's a given. It makes you equal with the competition. The question is: what can you do to add value over and above what is expected?
A manufacturer that provides added value to its representatives and distributors ultimately provides added value to its end users. There are several ways manufacturers and distributors can provide added value, over and above what is expected:
- Manufacturers need to provide meaningful, positive training. Often times, they sponsor boring training programs, with no real applications. What is needed are strong, positive training programs that provide significant, worthwhile industry information.
During the training programs of many manufacturers, a large portion of the allotted time is spent touting product features and benefits. A more value-added approach would be to provide information on how to effectively sell products and determine how to reach the best possible prospects, as well as providing practical application information.
- Develop safety programs. Based upon applicable products or service, a comprehensive safety program is an excellent value-added service. Safety programs provide an opportunity to educate and highlight products at the same time. End users welcome the opportunity to have manufacturers and distributors contribute worthwhile information that will ultimately result in fewer injuries and greater productivity.
- Advertise to the end user. A strong, consistent advertising program that targets end users is critical to manufacturer and distributor success. Reinforcing the advertising message not only in end user trade publications, but also in conjunction with trade shows and on the Internet provides extra value.
- Create a selective distribution policy. Manufacturers that develop such a policy bring value by providing excellent service to the distributors that they choose to build partnerships with. For example, manufacturers can help their distributors generate turns of inventory. By offering just-in-time delivery, manufacturers minimize distributors' investments and improve their profitability. Also, in the event of a change in the marketplace, distributors are not left with a large inventory of unusable stock.
The key to a selective distribution policy is just that - building partnerships with select distributors that help grow the businesses of all involved, and don't compete for each other's business. A tier system should be considered so that certain distributors that cannot support a particular product line may purchase through another distributor.
- Show end users added value. In some cases distributors may want to show the added-value services as a line item on the invoice. Reminding the customer of the value-added service and putting a dollar value to the service without actually charging for it reinforces the value of the distributor-customer relationship.
Providing added-value services to the equation creates a strong relationship between manufacturers, distributors, representatives and end users, and is invaluable for warding off attacks from competition. A strong value added program not only benefits end users, it ultimately positions manufacturers and their distributors favorably in a competitive marketplace.
Robert D. Hollaender II is president of Hollaender Manufacturing.
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