Something about free milk and a cow… My midwestern roots are showing, but every time I see services or add-ons given away, I think about the expression, which implies that you are giving something of value away without getting anything in return, like a commitment or improved partnership. New salespeople, people pleasers, call them what you like, but they need to correct a colossal mistake. You should not be afraid to charge for extras. MAYBE you don’t charge if it’s your very best customers, as they have continuous growth, mutual sales and marketing plans, and a demonstrated commitment to your partnership. But for the rest of the herd? Absolutely not! Let’s look at some examples where those freebies are cutting into your profits, and what you can do about it. Late night or weekend delivery? You are paying a premium for your delivery service or your delivery person’s overtime. So, charge a service fee. Expedited delivery? You have the inventory in stock, at the right price, ...

  This week we have a feature article on IMARK Electrical Now! I have spoken and written at length about charging for services.  In the same vein, this article talks about considering the impact your services have on your customers and how to use that information to your advantage.   Go check it out! Short on time? Here are direct links to items mentioned in the article: My manifesto on Amazon about the subject A whitepaper written for The Distribution Strategy Group Frank Hurtte, Founding Partner of River Heights Consulting, shares his personal experiences with 7 28  years 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 companie...

Once again, working with Distribution Strategy Group has been a blast!  If you didn't catch the webinar on Competing and Winning with Value-Added Services, you can watch it >>>HERE<<< . Of course, we realize some people learn better from reading the material rather than from listening.  The webinar material has a whitepaper format that can be downloaded >>> HERE <<<. Special thanks to both Distribution Strategy Group and Epicor for putting on a first-class production!

It has been an honor to work with our friends at Distribution Strategy group again.  We recently spoke about how competition is in a state of flux.  We're no longer vying for the top spot with the typical competitor.  There are now strictly digital players without a name or face.  In this webinar, we tackle how to up the ante in a digital world to become a more strategic partner. Check it out >>>HERE<<< TIP: Frank feels he sounds much better, and possibly more normal, at 1.25 speed.  Give it a shot! Special thanks to Epicor for sponsoring this event.

I just finished reading a great article in The Electrical Distributor online called “ BOOSTING YOUR DISTRIBUTOR'S VALUE-ADDED PROPOSITION ”. As I started to read, I was attracted to a distributor comment which stated, “(Our) company knows that it may not always be able to compete on price, so it focuses on helping customers run their businesses better.” I liked the message, step away from pricing and instead work on providing the kinds of services customers value. The article went forward with a number of great examples of the non-product services provided by distributors in the electrical segment. Here’s the deal: Since Tom Reilly’s ground breaking book by the same title back in 1985, distributors have embraced the concept of Value-Added Selling. They have let their creative juices run wild with new and innovative ways to help customers. In the process they have further endeared their product offerings to customers throughout their territories. But we have a problem...

Buzz words bug me. A decade or so ago everybody suddenly became a “value-added" sort of guy. Every salesperson I talked with for more than 20 seconds managed to find a new place to insert the words “value-add," yet most couldn’t define the value they were adding. Even fewer had any idea as to the worth of their “value” to the customer. And, only one in every thousand could manage to prove their value in dollars and cents. Long ago we suggested a break from the whole value-added selling hyperbole and laid out a plan for value-metric selling. You can read what I said back in 2011 here .  Value-metric selling added definition and focus to the extra services distributors provided along with their products. We suggested then and still believe providing services or some other value to the customer equation without thinking (or at least considering): • Does the customer even want the service? • Does the customer place any value on the service? • Is the value the cust...

“Find a niche and work it!” “We are a niche player.” “Our niche is small.”  Work in distribution for any length of time and you will hear one of these phrases bandied about.  Generally, when distributions hear the word – niche – they think of a small company calling on a very narrow segment of business.  To illustrate the point, here is what many people would consider a “niche”:  A distributor who works exclusively in providing lighting products to gas stations.   Small, very narrowly focused and expert are all descriptions that come to mind. I suggest Specialists change their definition of niche.  What if we developed “niche products?"  We change the definition from customer types to product groups to achieve this new mentality.  When a full line Electrical Distributor takes on a product which has very limited application appeal, we have a “niche product."  The new niche would consist of products not destined to...

Sometimes, it’s not just what you know, but who you know ...and how you treat them. I’m sure you’ve heard the saying, “Sometimes, it’s not what you know, but who you know that counts.” Perhaps you’ve been on the wrong end of this old axiom. You did your homework, researched the products, built a killer presentation and followed up with amazing vigor; only to lose an opportunity to someone who already had a relationship with the customer’s top guy. These things happen and sometimes there is really nothing you can do about it. As salespeople, we can either shrug our shoulders and go on about our day, or do something about the situation. Most salespeople focus on the technical users of their products. For automation sellers, it’s the engineering department. Industrial supply salespeople hit on maintenance. Janitorial and paper product distributor sales folks go to the head of facilities. I could elaborate on the list to nauseating length, but the point is, most frontline se...

The List Price Question - You might want to charge more than list price. What is List Price? Many salespeople believe list price is that artificially high number which is used as a marker for future discounts. In their minds, it is an unnatural sin to sell anything to anybody for “list.” Part of this attitude and philosophy comes from daily life. For instance, “Nobody pays sticker price for their new Ford and no real customer pays list for their supplies in our industry.” can be heard echoing through sales bullpens. But this story doesn’t really hold up well. For example, car dealerships have regularly charged more than sticker for hard to find or a limited production vehicles. Toyota dealers still stick to the manufacturer’s sticker price on most of their line-up. But we’re not in the car business. Our question becomes should distributors selling things like plumbing, electrical, HVAC and industrial items ever sell at list price or maybe even beyond? Distribution’s f...

If you've been reading us a while, then you're probably aware of our position on charging for services.  Maybe you didn't know a book was in the works! So, without further ado, we are pleased to introduce: This is The Distributor's Fee Based Services Manifesto by Frank Hurtte.  And because you are reading this, YOU are part of a select group to get a first crack at reading it.  You also get the best price.  Currently listed on Amazon.com for $40, we are offering it to our group members and subscribers for only $20 INCLUDING SHIPPING!     While there is no catch for this, it would be nice if we could get reviews, good and bad.  You know...in your spare time! Send $20 payable to Frank Hurtte along with your address to: River Heights Consulting Attn: Manifesto 226 Hillcrest Avenue Davenport, IA 52803  We're happy to include a receipt for your records.  Let us know if there is a PO number. This is only good through Labor Day , so put i...