Creating Your Job Shop’s Value Proposition and Customer Strategy

Our last post was the first in a series in which we break down the fundamentals of creating a robust and sustainable sales pipeline. In that post we focused on creating an actionable strategy and determining the activities you’ll undertake in order to deploy that strategy effectively.

This post highlights four of the key components of your strategy – questions you must answer in order to put together a strategy that will deliver a pipeline stocked with quality leads: your value proposition, your ideal customer profile, the type of relationship the customer wants/needs, and the appropriate sales channels.

What’s Your Greatest Value to Customers?
Every customer has critical needs, and multiple vendors from which to choose to fill them. That’s one of the reasons it’s so important to define your value to them: because it helps you differentiate your job shop from others. The other reason is that you’re not just selling products; you’re selling solutions to customers’ problems or needs and you should understand, specifically, the value you represent in that context.

Take a good hard look at what you do and how you do it, and list those things you know you do better than competitors.

• Do you have better after-sale service?
• Does your product require less maintenance?
• Do your parts last longer than competitors’?
• Do you offer vendor managed inventory (VMI)?
• Do you deploy proprietary technologies?

Let’s say you identify “fewer PPM defects” as your value to customers. Two things to think about:

• Do other vendors say similar things? If what you deliver is on par with what competitors deliver, you might have to differentiate more deeply or in another way.
• Is what you do more valuable to your customers? Connect directly with customers as you determine your strategy and ask for their input; you might be surprised that some other benefit is more important to them, like your ability to engineer custom solutions.

Whatever it is you determine to be your greatest value, make sure you can back it up with facts. If you say your product’s service life is greater than your competitors’, you should to be able to prove it with third-party research, customer-provided evidence, your own in-house comparisons…anything that will give credibility to what you say.

Who’s Your Ideal Customer?
Is your ideal customer an OEM of farm implements? Lawn and garden equipment manufacturers in the Midwest? As you paint your best customer’s picture, think beyond only what that customer manufactures and where they’re located; include relevant criteria like their ability/willingness to spend what you want to charge for your product, seasonality, long-term relationship potential, size of order, collaborative mindset, etc.

Once you have a clear picture of this “ideal customer,” look at how they make purchase decisions. This information will affect both your strategy and the actions you’ll take to persuade them. It might be that the types of customers you’re going to focus your efforts on make vendor decisions based almost entirely on word-of-mouth referrals. Or, it could be that these customers typically send out requests for quotes (RFQs) to multiple vendors every time they look for a supplier.

What Kind of Relationship Will Best Serve Your Customer?
Your strategy isn’t complete until it reflects the type and amount of effort you’ll put into serving each customer. How they access you and your products and services might mean having a dedicated service rep who’s their go-to person for ordering and resolving issues. It might mean offering a self-service portal that allows the customer to pay their bills, check on order status and schedule maintenance, or maybe it’s having a collaborative relationship wherein you develop products together. Maybe it’s a combination of two or more of these, but one thing’s for sure: you’ll get much closer to the right answer if you get customer input to understand what they want and need.

What’s The Best Channel?
Finally, it’s critical that you understand the right channels to use in order to sell to your best customers. Your options include supporting a direct sales force, selling through broker/dealers, selling on the Internet or through a store…there are a number of options and the one you identify as best for the customer must also be practical for your business model.

The purpose of these exercises is to define, at a fairly granular level, how to be invaluable to customers. Without the knowledge gained from these questions you’re essentially crossing your fingers and hoping for the best when it comes to creating your pipeline – and the sustainable growth that represents. In the next blog post we’ll address additional considerations key to the process of developing a strategy and plan for reaching your long-term goals.