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The Ties that Bind

Jan. 1, 2003
What's really underneath those slogans about distributors' service? You've heard them, and likely used them."Service is our middle name.""When you come

What's really underneath those slogans about distributors' service? You've heard them, and likely used them.

"Service is our middle name."

"When you come to us, it's service, service, service!"

"We provide service beyond your expectations!"

Distributor managers and salespeople like to boast about their service, but rarely can they put substance behind the words that would separate them from other electrical distributors using similar verbiage. When was the last time you heard a distributor describe his company's service as "so-so"?

Customers expect more from electrical distributors than just promises for superior service. They want to know exactly which value-added services a distributorship offers, and how those services are different from what those other electrical supply houses in the market offer. I believe the most effective method electrical distributors can use to analyze the value-added services their companies offer is the following four-step process:

List every value-added service your company performs. What are you doing that sets your distributorship apart, not just from alternate channels, but from those other companies looking at your customer base? I call these activities "the ties that bind." First, conduct an inventory of every service your company offers. This gives you a fix on the number of ties that you can offer. Examples of these services might include wire-paralleling, accepting credit cards, teaching seminars on changes in the National Electrical Code or offering technical support for selecting and applying automation products. List them. If they serve the customer in the selection, purchase, ownership, installation and maintenance process, then it has value. Bring your employees in on this, and ask them about each service they perform. Make sure all employees understand how their contributions influence these services.

Evaluate how various buying influences see these services. Which ties are most important to a customer or prospect? Your delivery services may be the best in the area, but if an electrical contractor picks up all of his products at the counter, it's an irrelevant service to him. Another example is credit. Your credit terms probably won't be as important to a maintenance foreman as your inventory levels and delivery response. If he has an assembly line down, he needs replacement products fast, and he isn't likely to quibble about pricing and terms.

Look deeper at all of the individual buying influences, and don't overlook anyone at an account or related company (like an engineering or architectural firm) who has something to say about the specification, purchase, installation or maintenance of the electrical or electronic products you sell.

Now rate the ties as to their strength in binding you to an account. Are they only as strong as a thread or do they have the holding power of a steel chain? How do they stack up against specific competitors? If you're at a disadvantage in one area, such as your location, can you compensate in another, such as an exceptional delivery service? Ask yourself what you need to do to strengthen key ties.

Secure these ties to several different anchors at your company and at the customer. How well are these ties anchored? Think of personal ties. Even in these days of computerized everything, we still go out of our way to do business with people we like and trust. Your sales rep may have a great personal tie to a customer's key person.

They get along great during business hours, occasional lunches and golf games. As a result, your company enjoys significant business--until this contact leaves this company through retirement, relocation or "down-sizing." If he or she was your only anchor point with this account, your tie is waving in the wind. The reverse of this should also cause concern. How many anchor points does this account have within your organization? If the salesperson is the only face they've ever seen, what would happen if your sales rep should decide to go to work for those folks across town? Do all key people at a customer's location appreciate the breadth and depth of the inventory you carry? How many of your inside support people have visited customers' facilities?

Make sure customers know about the value-added services that you provide that may be of value to their companies. Your approach will vary, depending on the size of the account. You may want a different tack with small and medium accounts, where the primary decision-makers put more value on "soft" numbers. Some value-added services are difficult to quantify. Values like product recommendations, callbacks as promised, personal relationships, educational seminars, minimal time on telephone hold, and other intangible components of "service" cannot be readily assessed in terms of their direct impact on the cost of doing business with one another.

If you're looking for ways to ensure all those buyers appreciate the value-added services you pack with the products you sell-tell them. Tell them by having your salesperson take members of your own staff on joint calls, or by inviting them to an open house or customer-appreciation day, where they can put a face to the voice on the phone. Tell them by offering a print-out of items you stock just for them, or by giving them a report card on the time of day your truck made deliveries to their facility over the last month. Tell them by showing a photo of the inside of your warehouse with a caption, "All for you!" Tell special accounts over dinner with key people from both companies while asking their valuation of your services. Tell them and keep on telling them, but be specific--no "great service" stuff.

You can use this tactic with three specific types of customers: your best accounts to insure they stay that way; accounts only giving you a portion of their business to show them why they should be giving you additional business; and the prospects you can't seem to break into. It's also an effective way to find the weaknesses in your competitors' ties to accounts. Ask your customers these questions: What services do you perform better than the present supplier? How can you offset special service strengths they have? What key people can you reach to tell your story? What innovative ways can you communicate your message?

One last thought: Be prepared to defend the value you add. If nothing else, most of your accounts are good negotiators and will still try to negotiate a better deal. Why not? You can't blame them for trying. Just be sure your people understand that price is not cost. Price is what it says at the bottom of the quote or invoice. Cost is the cost of the product plus all the services required from first identifying a need to its successful fulfillment. That's what you bring to the party. That's what differentiates your electrical distributorship from the competition. That's what builds and maintains "the ties that bind."

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