Whitepaper: Reinforcing Value with No-Charge Services

By -

We recently wrote a whitepaper for the Distribution Strategy Group which could be summarized this way:

  • Distributors provide a plethora of services. 
  • Services that involve people are nearly impossible for Amazon (or others) to duplicate. 
  • Some of the services customers expect, like credit or shipping, are available for free everywhere else.  
  • Many services go beyond the “cost of doing business.” 
  • The services most distributors added were put in place without a real strategic plan as to how they fit into the total business. 
  • Distributors lack an understanding of both the internal cost of providing the services and the value to the customer. 
  • Little management oversight is applied to services – sellers control who receives their services and when.  
  • Distributors face significant roadblocks to establishing a strategy for services. 
  • A strategy around services can create a competitive advantage. 

 

One reader passed on this question.

“When we provide a service, we add a line item to the invoice and mark it ‘No Charge.’ Should the customer ever question our pricing, we provide them with copies of these invoices. Do you see this as an alternative to fee-based services?” 

This article is our rather five-minute answer to their question. Check it out HERE. 

 

As always we are open to chatting about this article.  Want to argue?  That’s cool too.






Frank Hurtte, Founding Partner of River Heights Consulting, shares his personal experiences with


28years of "in the trenches" training and 17 years as a consultant.  He serves as a personal coach to industry leaders across many lines of distribution.  He has authored 5.5 books (one is almost done) and has written hundreds of articles for national trade magazines, including Industrial Supply Magazine.

Frank is also a sought-after copywriter of marketing materials for technology companies.  His charismatic, yet laid-back, easy-to-follow manner makes him a favorite among public speakers.





.




Comments

Post a Comment

Popular posts from this blog

The Dance of Onboarding: Integrating New Hires into Your Corporate Culture

By -
Image
Have you ever tried to waltz or swing dance with someone who couldn't match your rhythm or didn't know the steps? It can become a clash of styles or cultures, or, worse—somebody gets their toes stepped on. A similar thing can happen when a new hire doesn't quite 'get' the culture. Much like dancing, though, skills can be learned. I recently facilitated a panel on Cultural Quotient (CQ) where we discussed best practices for increasing CQ. This involved intentional learning, self-awareness of physical cues such as body language and personal space, and the willingness to adapt to new cultures. I have some amusing stories about what not to do based on experiences with insensitive former colleagues. However, it's more productive to focus on how employers can improve the onboarding experience and subsequently enhance retention and employee engagement by welcoming people into their corporate culture. Maybe someday in person, over drinks, I'll share a funny story o...
Read more

50 Questions for Distributors

By -
Image
Last week I wrote an article titled “Six Questions that Demand an Answer.”  Sharing the article with a few trusted advisers, I received one consistent bit of feedback best summarized by this response. “Frank, I agree these are questions we must ask ourselves; they caused me to pause and ponder.  I used them as an exercise with my team to think about our overall strategy.  I believe taking the time to think about our business from an outside perspective to be justified and worthwhile.   Sometimes it’s hard to do this subjectively.  I would like to see more questions just like these.” The following is my first round of questions.  I have put them into categories to make them easier to digest.  Some will apply to your position, some will not.  I suggest spending a moment visiting these topics with members of your own team. A note:  The readers of this blog come from a variety of backgrounds, hold a diverse collection of positio...
Read more

Ship and Debit Programs

By -
Image
Special Pricing Agreement and Thoughts about Ship and Debit Programs Click here for a brief tutorial on Ship and Debit Programs. Special Pricing Agreements (SPA) have been around for a very long time. The concept is simple; a manufacturer uses their distribution channel as a vehicle to service a customer who requires very low pricing to match some commercial situation. The details of the commercial situation aren’t really all that pertinent. They can arise due to customer potential, competitive pricing pressure, or supply contracts driven with large mega-corporations. The point is normal distributor margins no longer support the selling price and the distributor plays a critical role in providing some service to the customer. In years gone by, distributors involved in these situations purchased products earmarked for the special priced customer at sub-distributor price levels. The freshly purchased (at lower than normal cost) products were either brought “into stock” to sell...
Read more