Playing the Price Game: It’s a Choice. Choose Wisely
The Internet, the obvious low barrier to entry, unskilled salespeople, the economy—each of these drive price wars and ultimately erode profits. Additionally, these issues relinquish control over to the client thus giving the client ultimate control to manage and drive the process. However, it doesn’t need to be that way. Choose to be different!
Have a Plan
More than ever the “plan” often is neglected or never ever produced. Distributors typically fail to plan how they will go to market and, more importantly, to whom they are going to market. Approximately two years ago I surveyed a large number of distributor companies and asked, “Do you have a marketing plan?” Of those surveyed only 30 percent said they had a plan. Then I asked an additional question of those who said hey had a plan; “Is your plan written down?” Of those 30 percent, only 3 percent said they had a written plan. That number is dismal. In order to be consistently effective it is imperative that you have a plan.
Know the Market
All of the literature in the advertising and marketing world speaks to the importance of being laser-focused in your marketing efforts; the shotgun approach is no longer effective. With the barrage of marketing and advertising messages that hit our clients and prospects daily, it is critical that your message be highly targeted and honed in on your specific target audience. That said, developing vertical and lateral markets will be the future of our industry and the key to optimum success of any business. By developing vertical or lateral markets, you become an expert in that specific field, doing so, you could indeed eventually own that category; and with the right market, it could go viral. My advice is to develop a minimum of three to four vertical markets, do your research, interview and really get to know those markets.
Know Your Competition
Many distributors try hard to create a compelling Web presence so their clients will buy off of the Web. However, it rarely happens unless you are prepared to spend a significant amount of money. The competition on this area owns this channel, and there are few who do it well, but those who do, make significant profits, but it’s all they do. They’re focused and that’s why they are successful. Then you have the product pushers, the discounters, the hobbyists, the catalog ploppers, the scoopers, and the adult trick-or-treaters and then the real sales professionals. All of these folks are your competition so you need to do something to differentiate yourself from these types. Given the industry has this low barrier to entry many salespeople are driven by competing solely on price, they say they are creative and innovative but at the end of the day, it comes down to price and many acquiesces just to get the business. This practice erodes profits and casts and very heavy cloud of unprofessionalism. So choose to be different.
Know What You Do
I have coached hundreds of distributor companies and their salespeople that say they want to be different; they want to be perceived different aand truly desire to maximize their profitability. When I ask, “What is it that you do?” the vast majority stumble and grope for a good answer. When asked, “What makes you different?” and “Why should I buy from you” I get the same puzzled response. For whatever reason, many feel that they need to be everything to everyone. That’s not the case. In the medical field, you have general practioners and specialists, such as neurosurgeons, I encourage all of whom I coach to become specialists, doing so your profits will explode.
Forget the Economy
The economy still is being used as a crutch. However, much of the literature states that the economy is on a major uptick, don’t let what happened in the past hold you back, think positive and be proactive about going for business. It will make a marketable difference and the results will be amazing.
Create a Point of Difference
For every company this is different. Take the time to understand your competition, chat to your clients, ask questions, do research and own categories. When I had my distributor company, I went from calling myself a distributor company to having a boutique agency – we developed five vertical markets that we worked diligently; we remained focused and didn’t take our eye off those markets. Furthermore, we did not focus on products, we never led with product and we focused on creative program development where our clients could measure the success rate of the campaign. This proved to be very beneficial for our company.
I have interviewed hundreds of end-buyers and what they are looking for are ways to measure the ROI and ROO on all of their marketing efforts, if fact according to BtoB Magazine, marketing professionals are being compensated on their ability to measure success rates in their marketing. Here lies an amazing opportunity for you. In this arena, price is the last issue—and loyalty thrives. So…it’s a choice…choose wisely!
Until next month, continued good selling.