In our continuing series on Finding New Customers For Your Manufacturing Business – The Ultimate How-To Guide, this month and next month we’ll be taking a look at how to increase orders with information you already have. That’s right, we’re talking about increasing and even doubling sales without spending a fortune on fancy advertising firms or outside sales people. We’ll take on the subject of looking internally and in two parts, with this month devoted to the subject of beating the big “C” on price. Countless manufacturing companies close their doors and auction off their equipment because China stole their customers based on price. How do I know this? Our auction division is, in many instances, doing the auctioning! Just because I used the “A” word, don’t stop reading now…you’ll miss all the fun! The truth is, we’ve seen companies that fought the same battle and WON in our business brokerage division – Manufacturers who stood up and fought back. Manufacturers who altered their game plan like a good football coach in order to bring to the playing field an element of surprise and a surefire way to win the game. Manufacturers now retiring in wealth because they refused to get sucker punched on price. We’ll tell you how they did it!
I know that some who are reading this are saying, “it’s pointless, we’ve already lost the customers on the price issue and we can’t get them back.” I understand that there is always a segment of the market that will shop on price alone – but not all! Human nature dictates that many will want service, quick delivery, ease of communication and relationship ABOVE price. Don’t believe me? Then explain the existence of Starbucks and Apple. And…what if you could actually get some of those customers back, even while charging more? Well you can.
What I hope to do in this article, above all else, is to inspire you to fight! When you lose a customer, don’t take it lying down, fight! Fight for your business, your way of life, your employees – FIGHT! You start by figuring out what you can provide that the people with the cheaper price CAN’T. A few months ago I highlighted a book in my blog called, “Creating Competitive Advantage,” by Jaynie L. Smith with William G. Flanagan. If you’re losing customers to China on price, go buy it and read it like your life depended on it. This book will force you and your staff to look at things in a different way. It will show you how to figure out what your competitive advantage is, and then show you how to position yourself to highlight your competitive advantage.
One of the best things that manufacturers can do to keep customers that are going overseas is to offer a lightning fast turn-around time. Even if the customer insists on moving overseas because of price, leave the lines of communication open. Inevitably in business, there will be a rush job that the overseas supplier can’t accommodate. Make sure you can. Become the fast turnaround king in your field. Sure, it might mean altering your game plan….but then again, it might mean you actually get to stay in business! On my way to vacation last month, I book-ended my vacation with business travel, looking at both auction and brokerage deals in four states. One of the brokerage deals was absolutely fascinating. The company is thriving and has been around for decades. Their competition is not overseas, but right here at home. Their 2 main competitors are industry giants who have crushed scores of guys like my new potential client. How did he not only survive, but also thrive? He learned that his competitive advantage was turn-around time. The big boys take 2 months, sometimes more, to do what he does in under two weeks time. The difference? The lack of red tape gives him agility that they simple can’t match. He built an entire business around THAT competitive advantage.
Your competitive advantage might be quality, rather than speed. What is the company that took your customer on price, sacrificing to maintain price? Quality is often the answer. Sometimes the reviving of that customer simply requires consistent follow up. You want to be on their brain when the new supplier screws up! That takes consistency. It takes consistency and systematic communication. I would argue that the time to start consistent communication is prior to losing an account. Put forth the effort to learn your customer’s “hot button” in advance and maybe you’ll never have to fight to get them back. The fact is, multiple studies show beyond dispute that people and companies buy for a variety of reasons, not simply price.
Companies will spend more for convenience and less aggravation.
I definitely fall into this category. I do not enjoy the “Marshalls” type of shopping experience. I view searching through endless racks of “bargains” to find what I need to be a waste and disrespectful to my time. Give me what I’m looking for with ease and some decent customer service…. and you’ve got my business! Some will pay more for image, which is why we have the Rolex and Mercedes Benz buyers. For other buyers, expert advice is the key to getting their business. The point is that people and businesses buy for reasons other than just price. Know in advance why your customers buy and what their hot buttons are.
So how do you find out what their hot buttons are? So few companies do what it takes that you’d think the answer was complicated, difficult and expensive. The opposite is true. The answer is so incredibly simple. You ask them, and then you listen. One of my favorite books of all time is “The Seven Habits of Highly Effective People,” by the late great Steven Covey. If you are a regular reader of my blog, you know I refer to him often and recommend his works. One of the seven habits is, “Seek First To Understand, Then To Be Understood.” In this context we could say, “First find out what the customer wants and needs, then explain how you can fulfill those needs.” Don’t wait until you are losing the customer to start communication. Communication should be on a regular basis.
I was recently speaking with a long time customer who was doing work for a much larger and well known manufacturer. I asked if he had tried to get other work from them. The answer was, “no,” because the company was so large that he didn’t know anyone in the other departments. Well, ASK! If you have a good relationship with your key contact, communicate with them on a regular basis. Ask what else you can do to make their life easier, ask how else can you help them to be successful. Ask, and then listen. Don’t just wait for the next order to come in. What if the next order goes overseas? What if you never have the opportunity to make your case? You will if you are communicating on a regular basis.
Manufacturers should have a system in place where all their customers with complete contact information and everything about them is in one place. Having this in an electronic format where you can add calendar events to a specific name is extremely helpful, (at Accelerated – we like FileMaker). An electronic format allows you to communicate with all customers quickly, via email. You can create one marketing piece in a program like Constant Contact or Stream Send and communicate that you have new machining capabilities or a faster product turnaround time to hundreds of customers with the click of a button.
Not everyone can afford expensive advertising that makes them a household word like, GE or Siemens. Other companies take the approach that they must “buy” customers through constant gifts and entertainment. I would argue that it doesn’t matter how many times you play golf with a customer. Business is business, and if your company is not providing what is needed, no amount of dinners or golf will save the account. Make sure your customers know what your competitive advantage is. You don’t need an expensive advertising budget to be able to answer the question, “Why should I do business with you?”. In fact you should be able to answer that question better than anybody. If you are communicating this on a regular basis and listening to your customers, you will be less likely to get sucker- punched. You will know that price is an issue AND be able to argue your case before the account goes overseas because you’ve maintained a relationship.
I’d liken any business that does not regularly communicate with their customers to couples in a marriage that have stopped connecting…. and then one day, one of them is gone. Arguing to save the relationship is too little too late at that juncture. Don’t let it happen to you…the customer or the marriage!
Fran Brunelle is an industrial auctioneer with almost 20 years experience, a manufacturing business broker, licensed real estate broker specializing in industrial properties, a real estate auctioneer, certified appraiser and author. Fran has established several corporations that provide services to the manufacturing industry. The “Accelerated Group of Companies” provides tools and services to help manufacturers grow and exit strategies to maximize dollars when they are ready to retire or sell their manufacturing business. The group of companies that Fran Brunelle has established includes:
www.AcceleratedBuySell.com – Provides Online Industrial Auction Services, Used Equipment Auctions, Capital Equipment Auctions, Plant Liquidations, Industrial Plant Cleanout Services, Used Machinery Location Services, Certified Machine Tool and Equipment Appraisals, and more.
www.AcceleratedMfgBrokers.com – Specializes in Manufacturing Business Brokerage and Mergers and Acquisitions. We help manufacturers develop exit strategies to maximize retirement dollars, and successful manufacturers expand through acquisition of other manufacturing companies, product lines and customer lists. Manufacturing Companies for sale throughout the United States are listed on this site.
www.AcceleratedRE.com – Provides Industrial Real Estate Brokerage Services, Online Real Estate Auctions, Sealed Bid Real Estate Auctions and complete industrial facility cleanout services.
www.IgniteMfg.com – Provides funding for products made in the USA, and engineering/manufacturing educational needs through Crowd Funding.
www.MfgWebSolutions.com – Provides web development and social media services for manufacturers at under-market rates.
Fran Brunelle is a contributing author to:
blog.AcceleratedBuySell.com - A site that provides the latest manufacturing news, statistics and opinion. It also provides information on how to grow a manufacturing business, and what to do if you are a manufacturing company that needs to close.
MFGWebSolutions.com/blog - Provides the latest information on social media and web development for manufacturers. It gives manufacturers tips and tricks for boosting their web presence.