Tuesday, September 3, 2013

How to Avoid Being Commoditized

Here's a guest post from my client and ace sales trainer, Terry Slattery.

Read it and reap -- sales gains, that is ...

One day, a salesman client moped into my office. He had lost his biggest customer -- who had been with him for 10 years -- over a 3-cent price difference. He pleaded, “How do I win them back?”

I said, "Answer this question: ‘What's going to happen to whom because they are not buying cinnamon from you, and how will that affect their life?’”

First, background: A new purchasing agent had called my client, saying: “I understand you've been providing us great service for 10 years. But you charge 3 cents a pound more for the same cinnamon I can get anywhere. Out of respect for our relationship, I want to give you the chance to match that lower price before I move the business.”

The salesman started talking about service and support. Then freshness and quality. But, like a broken record, the buyer kept coming back to 3 cents a pound … 3 cents a pound. And the business was lost.

Turns out, my client never mentioned his big Differentiating Value (D.V.): Time to market. This salesman, who nearly has a PhD in food science, told me, “In exchange for charging a slight premium on cinnamon, I shared my expertise with their R&D department. Without my help, they estimate it will take at least 3 weeks longer to get a product to market.”

When I asked what those 3 weeks meant in terms of money, he said, “About $80,000 in daily sales. Three weeks are $1.6 million. And they roll out about 6 products a year. All told, it’s about an opportunity cost of about $10 million.”

I asked, “Who feels that $10-million loss? It’s sure not the purchasing department.”

He thought for a moment, then said, “It’s the brand manager.” I asked him, “Do you even know their name?” “No,” he replied. And I said, “That’s fascinating because that is your real customer.”

A strange look came over my client’s face. He said, “I thought I was selling cinnamon. But what I’m really selling is 3 weeks.”

This story has a happy ending. I advised him to call the brand manager and leave a voicemail, which resulted in a rapid return call -- and my client winning back the account.

Your Takeaway: No matter what you sell, you face the curse of commoditization … unless you get absolutely clear on your D.V., then communicate it to the customer who matters -- which may be a different customer than the one you’re selling to.

To get clear on your D.V. -- and get the script for the startling voicemail message that helped my client win back that lost account, contact Terry Slattery at his website.

And, if you want to put an end to "feast or famine" syndrome in your business, my free Client Cloning Kit can help. Grab your free copy now, while they last.

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