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Prove your value

No two distributors are the same; it's your job to prove that to your customers

By Tom Reilly -- Industrial Distribution, 3/1/2002

Customers fret; suppliers sweat. Buyers make decisions daily about supply alternatives; it's as if each of these buyers has a collage of suppliers hanging on his office wall. The buyer views the collage and tries to select an alternative that stands out. It's harder than it sounds, and for good reason.

The following "four C's" explain why buyers fail to perceive the differences among their suppliers.

Commoditization

The quality revolution ushered in an era of suppliers cleaning up their acts. Buyers tell us in surveys that they prefer higher quality. Who sells inferior quality today? Quality has become first-cut criteria. If you don't sell good stuff, buyers don't want to talk to you.

At the same time, look-alike products compound the problem. Suppliers, in an effort to compete, always seek ways to gain competitive advantage and may turn to innovation. Other, less creative, suppliers copy the innovation, and buyers then view the product as a commodity. It increases the buyers' negotiating leverage if they can relegate your product to commodity status.

Convergence

Copying is not limited to products. If one company offers a unique service, it doesn't take long for competitors to copy that service — hence, the convergence of services. Consider the buyers' dilemma: two products appear to have the same core qualities, wrapped in a blanket of identical services. What would you do? I once heard the definition of a commodity as "a product differentiated only by its price."

Consolidation

Buyers want to consolidate purchasing, and sellers are buying and selling each other — i.e. merging — faster than minks reproduce. Sounds simple, except for the fact that consolidation blunts supplier differences. To consolidate means to bring together. How can you have differences when everyone regresses around the mean? The net outcome is a whole lot of superstore-type companies that look alike.

Conformity

Most people spend their whole lives trying to fit in and lose sight of the fact that it's okay to be different. It starts early in life by hanging out with the right crowd, wearing the right clothes, and going to the right schools. Later in life, it means driving the right car, joining the right club, and again, knowing the right people.

Because most of us spend so much time fitting in, we forget that we're supposed to be different. If we weren't meant to be different, why are we made differently? It takes courage to be different — to stand out from the crowd.

In sales and marketing, fitting in is the curse of mediocrity. Being different is the essence of competition. How can you compete effectively if you, your company, and your product look like everything else in the market? Over half the salespeople I train cannot tell me why the customer should pay more to buy their product. They fail to answer one of the most fundamental sales questions of all: What are the definable and defendable differences between you and the competition?


Author Information
Tom Reilly is president of Tom Reilly Training, a St. Louis-based firm specializing in training salespeople and sales managers. He is author of the book, Value Added Selling . You can reach Tom at 636-537-3360 or visit his Web site: www.tomreillytraining.com.

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