Think outside of (what's in) the box
By Michael Saraf
Your distributorship represents many strong manufacturers whose products can deliver true value in the form of cost savings to your customers. The problem is that all of your real competitors have the same types of quality products. If not the exact same brands, then they represent manufacturers very similar to those in your offering. If a potential customer is reviewing your line card and that of your competition, would they see a difference?
If you are hoping that they will choose you based on this, you need to develop and implement a more sustainable strategy. You need to have your customers widen their field of vision to include EVERYTHING that surrounds the actual product that they are buying. The right product for the right customer will reduce their pain by lowering their overall cost. That will always be true. Today, however, it’s very difficult for customers to discern one product from another based solely on “what’s in the box.”
Commercial success in the past was largely based on making good products available to your customers. The market is not this way any longer; the customer base needs more. To meet and exceed this new demand, your distributorship needs to be more customer-focused than product-focused. There are so many product choices available today that customers may move from one brand to the next for myriad reasons, not the least of which being the “deal of the day.”
So, how do you separate YOUR Distributorship from your competition? To paraphrase, you need to think and act outside of (what’s in) the box. The easiest way to get to where you need to be is to put yourself in your customer’s position and truly learn (don’t just imagine) what their expectations are.
To be considered as an (or possibly THE) authority in your industry puts a lot of pressure on your competitors. Your competition has softened the market by conditioning their customers to have minimal expectations, which is very good for you.
If you acknowledge that the YOUR Distributorship’s “product” is considerably more than “what’s in the box,” you begin to understand what the customer CAN think of when they see YOUR Distributorship’s brand. Make no mistake, just like the products that you represent, YOUR Distributorship also has a brand.
The Product Circle
In “The Product Circle” (left), we interpret “Core” as the actual physical product. In the past, this was good enough to win business, but it does not suffice anymore. If the product itself is far superior to the competition, but everything surrounding it is sub-standard, customers may choose another product, foregoing performance in favor of the whole package.
The “Core Product” itself is “what’s in the box” and nothing more. To the uninitiated, your product looks the same as any of your competitors’ products, but it is your ticket to the game. As an example, let’s consider an automobile as the “Core Product” that you want to purchase today. Most of us have purchased a car at some point, so this will be familiar. As the “Core Product” in our example, the car is just a car. It is the actual physical product that you will leave the dealer with as the new owner. As we start our search to purchase a new car, our initial mindset is that “a car is a car.” So, how do we decide what to buy?
The decision is made easier for customers as they consider aspects further away from the center of the Product Circle. This is where a particular company begins to separate itself from the competition.
The “Expected Product” ring covers all of those minimum expectations that the customer has of the product. In the case of the car shopper, we usually expect (in no particular order):
- safety features on the vehicle
- fuel consumption within a budget
- some level of warranty
- service, as needed
- a certain amount of life to be put on the vehicle
There are others as well, but none of them are exceptional. Of course, almost all car dealers possess all of these things, but their competition does as well. These are the “Points of Parity” they must have in order to compete. Fortunately for you and YOUR Distributorship, this is as good as it gets for a lot of your competition, and the longer that YOUR target customers have used their products, they have been conditioned to expect nothing more.
Moving further away from the center, we arrive at the “Augmented Product” ring. It is in this area where the customer can realize the benefits of a relationship with YOUR Distributorship. This is where you differentiate yourself, and where the customer will have their expectations surpassed (by far in most cases). Again, using the automobile illustration, examples of “Augmented Product” are:
- innovative safety features that protect all passengers, the recognized safety leader
- the best fuel consumption-to-power ratio in the industry
- double the warranty of any other dealer around
- exceptional 24-hour service available 7 days per week, at no additional charge
- proven track record of 15 years of life, on average
Assuming we visited three dealers today and we saw cars at each dealership that interested us, and assuming all three dealers met our minimum expectations satisfactorily, our decision is still difficult. Now, when the last dealer we visit can offer all of the “Augmented Product” features listed above, our choice is very clear.
As the customer realizes that YOUR Distributorship has an “Augmented Product,” they begin their relationship with you. These benefits that were originally considered as a bonus, eventually become the new standard in their eyes. In a short time, the customer EXPECTS to have what they did not even know was possible before. What was once “Augmented” has now become “Expected,” and the competition cannot keep up because they have no answer.
While the “Core Product” circle will always remain the same in size, the relationship between the “Expected” and “Augmented” is constantly changing, as feature and benefits move from the outside toward the middle.
The last element, the “Potential Product,” is limitless. As potential becomes reality, it begins its journey toward the center. Let’s use the car as the example one last time. There was potential at one point in time for a satellite navigation system to be invented, and it would tell us exactly where we are at any point in time, how to get to where we were going, and exactly how long it should take us. It was a “Potential Product” because it did not exist anywhere. In fact, most people would have said that this was preposterous, even as late as the 1980s! As we all know, however, the GPS has quickly transformed from a “Potential Product” to an “Augmented Product” and it will not be long before it is a standard feature on all cars. Once there, it will have become an “Expected Product” and you will not buy a car without it.
Elements of the “Product Circle” continuously move from the outside to the middle. What was once a bonus soon becomes expected. A challenge for YOUR Distributorship is to keep raising the expectations of the customer by creating a new standard, and turning the “Potential” into a reality.
Certainly you need to continue to represent the strong brands that are proven cost savers. This, after all, is the single biggest benefit that your customers need to keep their businesses alive and well. Your stable of manufacturers need to continue to educate your sales force on the features and benefits of their products so that your team can be viewed as the authority on the products. Now, to separate yourself from your competition, YOUR Distributorship needs to put an emphasis on what else you can be an authority on, which is becoming an “Expert In Service.”
Michael Saraf, president of Brand Performance, LLC, has more than 20 years of industrial sales and marketing experience, helping manufacturers and distributors strengthen their brands, build customer loyalty and capture market share. Visit
www.mybrandperformance.com to learn more.
This article originally appeared in the July/August 2014 issue of Industrial Supply magazine. Copyright 2014, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
