I recently addressed a New England
Manufacturer's National Sales Rep meeting about an under-emphasized opportunity
- selling service value.The
manufacturer has historically commanded a premium price for better quality
hardware, but they were concerned that they had not been getting full
appreciation for their great service which includes one-stop sourcing, high
inventory fill rates, 24 hour shipping and more.As their products pass through the channel,
their concerns were: whether each channel member's value-added service was
adding or subtracting from their own; and was this cumulative service value
In general, if any one of the
channel members - the reps, the distributors - find
that too many other competitors are selling equally excellent products, do they
look for a competitive edge through service value?How many companies can: list 5-10 elements of
basic service excellence and, the related economic benefits to the customer?; state measurable statistics to support service claims?;
and perhaps guarantee elements of service excellence by providing a credit-fee
to a customer for not delivering promised service levels?
For example, one distributor I know
of guarantees that: he will ship 100% of all orders phoned in by ; he will pick and price perfectly;
and a few other things - or, the customer is given a $30 credit.This distributor sells the benefits of these
"features of service excellence" constantly.Such capabilities create value unique to the
firm, and lower operational costs because it is cheaper for personnel to
"do it right the first time."
Today three trends are making
service excellence most important:
customers often see more variance in the quality of the service from suppliers
than in the quality of the hardware.
are often fewer, bigger customers to sell because consolidation of most
many customers are reducing the number of their suppliers and lengthening
contractual purchasing agreements.
Because of these trends,
"relationship selling" built on a bedrock of guaranteed service
excellence will become critical to locking-up key customers or being locked
Questions for competitive survival
in the future are:
we measuring, improving, and selling elements of service excellence to become
low cost operators and best value suppliers?
we educate customers to buy service value which offers a lower "total
procurement cost" even at a higher price?
manufacturers able to sell their service value through the channel or does it
go unappreciated and get diluted by mediocre service from reps and
"channel partners" pushing for purchasing systems with the large,
growing, surviving customers using service excellence as the edge?