With greater competition, the lift truck industry is seeing purchasing decisions center around product price. This is not surprising because in any purchasing decision, price will always be a factor. What is surprising is the change in the relationship between price and value. Value too often is being defined by price alone, and value is too important to be defined so narrowly. Value must be a reflection of the overall service a customer is receiving from the distributor by making any specific purchasing decision.
Quality in service as well as product is a truer definition of value. So how do we sell value as opposed to price in today’s marketplace? The answer is simple: value-added selling.
There was a time when innovation in the forklift world created tremendous opportunities for manufacturers, sales professionals and customers alike. Conversion selling allowed salespeople to help customers convert from a counterbalanced warehouse design to a narrow, or even very narrow, aisle design. This meant huge gains in storage capacities and productivity. It was a “fork truck revolution,” so to speak. Sales professionals brought value to their customers by showing them how new technology and advancements in lift trucks could dramatically improve the way they do business.
Imagine the power sales professionals had when they could visually show the impact of moving from 12-foot aisles down to 8 feet, or even 6. How could customers not be amazed? They could now store more products and access those products more efficiently within the same warehouse footprint. Price was not as big a factor as the value the customer gained for that money. This type of value was well-received and rewarded.
Today, many companies have narrow aisle warehouse configurations, and there has been little in the way of product innovation since the major warehouse conversion. This has clouded the perceived definition of value in the customer’s purchasing model. With minor differences in product technology separating a growing number of manufacturers, customers have lost sight of value as it relates to price and centered on price itself. It is an “apples-to-apples” comparison that is not accurate.
Sooner or later, consumers will realize that price does not drive value. The ancillary services of the distributor are where true value resides. A dealer’s service, support, parts and sales relationships have always driven and will continue to drive value in the lift truck industry. It is these factors, in conjunction with price, that must be accounted for in order to make the correct purchasing decision.
Professional customer service, rental truck availability and prompt product delivery can add value throughout a customer relationship.
This support organization works behind the scenes as necessary for maintaining customer satisfaction and spearheading solutions as problems occur.
A dealer’s service department must be able to support a customer’s vehicles in a timely manner. It must have technicians that are capable of fixing the full gamut of problems that can occur with the product. Continuous training and measurable performance standards are imperative. Most of all, prompt execution of the service call, from initial customer request to a technician’s completion of that request, must be managed efficiently.
Failure to communicate properly can lead to faults throughout the execution process.
Ways to Restore Value
• Professional customer service
The management of a successful parts department relies on carrying the appropriate parts and the ability to deliver those parts in a timely manner. Some dealers have even adopted online parts ordering for clients that handle their own maintenance. For larger clients, the ability to provide parts consignments and manage those consignment inventories properly is tremendously advantageous.
The sales relationship must advance. Dealers must take advantage of technology to enhance customer relations. The breadth of tools available to touch customers has grown tremendously. E-mail, CRM programs, mailings, promotions and new product innovation announcements all give sales professionals the ability to supplement face-to-face interaction with their customers.
Customer follow-up is imperative for good account maintenance. Regular contact can yield great benefit as dealers not only sell lift trucks but provide additional solutions to meet the material handling needs of customers.
The fact that customers are leaning more toward price-driven purchasing decisions leaves lift truck distributors scrambling to find new ways to add “value” to their customer relationships. Please don’t misunderstand. We do not work in an industry or business environment of absolutes. Not everything said here is applicable across an entire customer base. However, distributors must deter this growing price sensitivity by adjusting the sales process so that the “little things” are highlighted. Price is much more justifiable when its components are more clearly defined. Showing value must mean more to distributors than having the lowest price.
The bottom line: As products move toward commoditization, the little things are what differentiate one manufacturer or one distributor from another. Sell yourself and your company. The product will sell itself, margins intact.
|Meet the Author
Matt Senecal works in systems sales and marketing at Werres Corporation in Frederick, Maryland. His entire two-and-a-half-year career in the industry has been spent at Werres Corp.