An important element of success in sales is understanding how your product fits in the context of the customer’s business and what they need to be successful. To better understand this, consider three basic categories of fit: essential, important, and value added. Let’s take a look at each.Essential — Every company has essential things they […]
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An important element of success in sales is understanding how your product fits in the context of the customer's business and what they need to be successful. To better understand this, consider three basic categories of fit: essential, important, and value added. Let's take a look at each.
Essential — Every company has essential things they need in order to deliver their product. These essential elements enable a company to make money. Consider a manufacturing company.
Raw materials are essential ingredients. Without the raw materials they could not make their product. The machinery on the plant floor is another example of an essential element in the manufacturing process. Without some type of means to produce a product, raw materials just sit there.
Competition will be tough, and winning this business can be difficult. After all, what the supplier offers is essential to the customer's success. The customer is naturally going to be more exacting in their requirements, and more demanding in what they expect the supplier to do.
A manufacturer will usually have a primary and secondary supplier of raw materials and machines. The primary gets the majority of the business. The secondary gets a smaller percentage of the business. The manufacturer is protected if one or the other of their suppliers is not able to deliver.
To lose the business a primary or secondary supplier would have to betray the trust the manufacturer places in them. This means more than just making a mistake. Mistakes are inevitable. Responding poorly to a mistake, or making repeated mistakes is more serious.
Taking advantage or assuming the business is yours are other ways to lose the business. Inflating prices or not paying attention makes the customer feel discounted, damages the relationship, and jeopardizes the business.
Important — Supporting essential elements are important processes and tools that usually enable the company to run more efficiently and profitably.
Think again about a manufacturing operation. Important components could include information systems and training programs. More efficient and profitable companies invest in these types of solutions. They find that the more information people have and the better equipped they are to deliver a great product, the more competitive the company becomes.
It is not essential to have a top-tier information system. Many manufacturers deliver products based on a customer order, a hand written production and delivery schedule, and monthly or quarterly financials that tell them if they made money. On the job training is not uncommon either.
If your solutions fall into the important category, focus on two things. First, develop customized, on-point solutions for each customer and avoid off-the-shelf solutions that could put your product in a more commoditized light. Also, elevate the focus on the relationship and the level of trust developed with the customer. With these characteristics in place, important solutions can elevate to an essential level because the customer has a greater belief in what the supplier says and the efficiency and profit potential of the solution they offer.
Value Added — This is the toughest category in which to compete. The offered solution is not critical to the customer's success. There is also a lot of competition. Professional and financial service providers frequently fall into this category. This includes consultants, insurance providers, financial advisors, accountants and bankers.
Because of the non-essential need for the product or service and the high level of competition, value-added suppliers are frequently viewed as commodities in the customer's mind. Customers in this arena often ask questions such as: Why should I consider doing this? How much time and money do I need to invest? What makes you different?
For any value-added supplier, the strength of the relationship with the customer is the heaviest weighted factor in determining success. Only through a stronger relationship can a customer lose a commodity perspective. Only through greater trust can a customer see and believe in the value add that the solution offers.
The bottom line for salespeople is to know how you fit in the context of the customer's business, and what they need to be successful.
Knowing these things helps frame the solution you offer. It also illuminates the value of establishing a strong relationship.
Ken Cook is the co-founder of How to Who and co-author of How to WHO: Selling Personified, a book and program on building business through relationships. Learn more at www.howtowho.com.
