Value-add – make it real
In the late eighties and early nineties, the term value-add
was not found in Distributor dictionaries; In those days it was a case of
efficient storage and supply, indeed many terms and conditions carried clauses
that declined liability for any “inferred” or “suggested” comment made by Sales
to clients. Many such terms still indeed prevail.
In early days therefore, perceived value add was brilliance
at holding stock and next day delivery and very little else. It changed
gradually in the late nineties when the term was first vented by Resellers who
had to adapt to new technologies and deliver far more intensive programmes to
their clients.
Things progressed to one point of call account management,
product knowledge and a “powdering” of prior promises to deliver on time and at
the right price. Never mind this should be a standard expectation, it was sold
as value-add.
Things got better with non-branded packaging or white
labelling, preloading of software, build facilities, the early dawn of solutions
and technical support, finance and marketing tools and web based delivery.
Once web and email took prominence, electronic developments
such as direct order placement, account view, online payment, e-billing and
general account management online came to the fore.
For me, and I suspect more many others out there, value add
is what makes the experience of trade an enjoyable one and not necessarily a
convenient one. Much of what first appears as value-add becomes a service offered by many. A service is not a
value-add.
Value-add, in purest forms, are found only in relationships
and these come from people and not businesses or ways to transact. It requires
a business to deliver a consistent message of interest and above all trust in
the client. If for example there is a dispute, then the message from Sales,
Customer Service, Product management and indeed Credit, should be common and
aligned. One can only achieve this by breaking the often divisive lines between
the various operating areas of a company. Getting each interested in the other,
allowing cross-fertilization of ideas and goals and above all communication, is
key to real value-add provision. It will certainly not work if each area is
pigeon-holed and driven by its own performance and incentive targets.
Some 90-95% of B2B transactions are on open credit terms and
receivables or trade debtors make up more than 45% of a company’s total assets.
In distribution, it is frequently higher and yet the measure of efficiency used
by many remains how quickly money is collected and how low bad debt is. Using just these measures is a sure-fire way
of cutting growth and profitable sales.
The quality of salesmanship has suffered in recent years and
much blame may be placed at the door of e-commerce, the Web, email communication
and companies forgetting the rudimentary requirement of client relationships.
When e-commerce arrived, a common phrase used for pushing
clients away from account management and into online buying was “reducing the
cost of sale”. What was meant of course was “reducing the cost of a
sale”, something quite different. Unsurprisingly, clients go to where they can
talk to people and the net result is one in which many companies see more
incoming to outgoing Sales calls with many incoming simply inquiries. Order
takers therefore instead of order creators, a theme applied uniformly across
industry sectors. Increase a sales target these days and Sales is guaranteed to
push those they already sell to instead of to those they don’t, with resultant
margin erosion.
A unified Sales and Credit approach guarantees success as it
is usually these two areas that have more physical contact with clients and
they remain the best communicators.
Taking a real and honest interest in your client while delivering
support and consistently unambiguous messages, is the way to a customer’s heart
and their order book; the services after all are available anywhere, with the
price often lower.
Technology is great and without it there is no progress, but
it is worth remembering the message you give clients is as important as “how”
it is delivered. Whatever happened to talking to people, frequently?
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