Realising the added value of Raw Materials (Because its Worth it!)
Latest industry news and reports from Safinah Ltd - November 2007
Having spent a huge amount of time, effort and money developing a new raw material that a supplier believes has obvious potential, they are disappointed with the off-hand manner openly displayed by world leading industrial coatings manufacturers towards their product. This may be the fifth or sixth of a number of what can only be described as fruitless meetings with the customer, only to be told once more that:
- Sorry we have not had time to look at the sample yet OR
- We are still awaiting the test results OR
- We cannot see any real benefit over the material we use already OR
- It may be OK, but we would like to run more trials before we make a final decision OR
- Unless it is cheaper by a considerable factor than our current material we have no use for this product
There are many similar statements we have all heard on countless occasions. When the supplier eventually receives feedback they are keen to assist in anyway possible if their customer would just share information. Enquiring as to the results achieved is usually met with a blank stare that clearly indicates Hell, as yet, has not frozen over so why bother asking.
Customers can be less than forthcoming for a number of reasons all of which usually boil down to an inbred fear of losing the high ground as far as future negotiations are concerned.
This does not need to be the case however, it is be up to the supplier to convince the customer of the advantages of being a little more open as to the true performance of the product.
It is important that a bond of trust is developed between supplier and customer that lead to a conduit for relevant information to flow in both directions.
What is needed is a slightly different approach to the customer, one that is based more on selling a tailor-made solution rather than a raw material. The ideal solution should be a mixture of products (raw materials) and services that not only lead to a greater value than the parts sold separately but creates a feeling of well being within the customer. It needs to be clear that you as the supplier are not just here for a quick sale but are genuinely interested in assisting the customer beyond his current issues. A word of caution though as this process has to be thought through very carefully.
The idea of selling solutions has been around for a number of years and has often been used as a way for companies to get more out of their regular sales and in many instances has been very successful. However if the dynamics of the process are not fully understood then it can end up being a very expensive exercise ending with little or no increase in the overall return generated, as well as an unhappy customer. This can happen when the complexity of selling solutions has been completely ignored, for example, it is extremely important to take the following into consideration:
- An equal knowledge of the customer’s business and in some cases the customer’s customer is vital
- An understanding of the amount of time selling a solution may take
- An understanding of the increased effort and thereby increased costs involved
A Tailor-Made Solution can only be considered when everyone within the supplier’s organisation understands that this is not a quick fix and that the overall timescale to completion is likely to extend beyond what is normally expected. This in many instances limits the number of customers that can be approached because of the overall effort that is involved. It requires sales executives who are extremely well trained in techniques such as Relationship Marketing and Key Account Management to ensure the best chance of success.
If a supplier decides to adopt this method for promoting a new product with a major or premium customer it does not preclude at a later date the same or similar methodology being used to roll out to second tier customers at an appropriate time.
Getting this right will not only lead to a higher sales value and greater customer satisfaction but is likely to enhance the overall relationship with the customer. Safinah has found that using this method often ensures that the customer is more willing to ask for help with other projects previously not mentioned, hence indirectly closing the door on the competition.
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