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Tough competition? When everything else is equal, just how do you make a profitable sale?

When you manufacture products it can sometimes be difficult to make your offer different enough to get the sale against the other similar manufacturers in your market segment.

Taking an everyday example of petrol stations, just how do you choose where to fill up? Is the forecourt design important, the advertising and branding they spend a fortune on, the loyalty card or do you prefer to support local businesses and just go to the nearest?

In one company I worked for, the previous management team had given up trying to have a differentiated offer and fell back on the worst of all options; selling on price and cutting costs (and sometimes corners too!). I’m sure we've all been there. It’s a vicious circle; prices down, margin down, ability to spend on improving things down, new kit on hold, morale hits rock bottom and good people leave.

We looked at how we could build in added-value – this term used to be a management watch-word but seems to have gone out of fashion in management-speak land. Anyway, added-value means trying to build in something that customers would respond to and that would command a higher price but not cost a lot. Maybe not a huge increase in margin but more on the bottom line.

We had an intermediary customer in the Lake District of England that had exactly this problem. They were our exclusive outlet in that geographical area so we wanted to throw our weight behind them and help them take a much bigger share of their local market.

On a visit to this intermediary customer the conversation turned to the local propensity for the locals, (many retirees) to paint in watercolours. There was a plentiful supply of artists but the thing that separated them was quite clearly the effect the finished painting had on the viewer. That got us thinking. Next time a sales opportunity from an end user cropped up, we (the intermediary and us, the manufacturer) commissioned a watercolour to support the quotation. In the eyes of the end user we had gone the extra mile and now all things were no longer equal. The end user could see with their own eyes what we trying to achieve, presented in a beautiful, stunning and impactful way. The end user was now more emotionally involved and had a higher regard of the intermediary customer.

The quotation price was a little higher but the end user still picked us. The intermediary customer then presented the watercolour to the end end user who (thankfully!) hung it in a prominent place in their premises. At a local trade networking event, the watercolour was then viewed by many other potential end users and as we know word-of-mouth recommendations can be extremely powerful in generating sales. So the watercolour became a talking point in that first end users premises and a cascade of enquiries followed for our intermediary customer. Depending on the scale of the enquiry, sometimes several watercolours for a single opportunity were commissioned.

It became a virtuous circle; prices up, margin up, ability to spend on improving things up, new kit on order to improve efficiencies, morale through the roof and good people queuing at the door for a job.

If you’d like to talk to me further about making sure you don’t sell only on price please get in touch.