Once in a while, you come across customers who look unintentionally at the wrong outcomes and achieve the opposite of their intention.
Let me explain; I had once a customer in the fashion and textile industry who was struggling with growing their market share. Year after year, their number of overseas orders declined, which was also their most profitable business. The buying group, including their CEO, decided to make their retail prices more competitive by reducing production costs. They put a rigorous cost savings strategy in place. All departments had to look for any cost savings.
True, this had a positive effect on their price competitiveness. However, their overseas orders did not increase. This is because they had overlooked one important thing: Although they saved costs by choosing the lowest-cost logistic supplier, they did not realize that this was harming their business. To save costs, their shipping department tried to fill plastic flyers to the max. The samples left their premises in an okay- state but arrived all wrinkled up at the final destination.
They took cost savings too far in how their product samples were transported and arrived at potential new buyers in European markets. Their goods looked as if they went at full speed through a washing machine. As a result, the European buyers experienced a wrong impression of their products. And bids were lost. In addition, some of their samples actually got lost or arrived too late to compete in a bid for new business. I congratulated the CEO on achieving a more competitive wholesale price. But I also convinced her that investment was needed instead of a cost-saving, to save their international business. I recommended using standard carton boxes to get their samples at the destination in the same state as to how they were packed at the origin. Indeed, the transportation cost per unit went up but also did the orders.
The moral of this story is that it is natural for buyers to look at price, products, services and solutions and any combination of these four. They want the best value for their bucks. For you competing at that level may not get you the business. Instead, focus on helping customers with the right strategic outcome. That will be the game-changer.
Take your buyers to new heights. Where average salespeople stay in the clouds, Trusted Advisors rise above the clouds by:
- PROVIDING NEW INSIGHTFUL INFORMATION. You create value at new heights when you can bring a different perspective to your customer’s business challenges. In the above example, the reason of orders still declining was not the price, but the quality of goods arriving at potential buyers.
- ACTING AS A SENSE-MAKER. You create value at new heights by guiding buyers towards most relevant information that will help them making more informative decisions and move them forward in their buying process. In the end the CEO of the mentioned textile manufaturer realised that it didn’t make sense to pull through cost-savings in the international shipping component of their business.
Take your buyer to new heights. Create value that matters to them, helping them with their strategic outcomes.
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