NAEDERC13 Blog 1: Value Added Services

One of the big topics for distributors is the value of “value added” services.

Jim Pancero is discussing the topic with distributors at the NAED Eastern Regional Conference on Wednesday, November 20.



Jim points out the costing structures for your business.  In the past, a majority of costs came from storing and distributing products.  In the future, the costs will also come from value added services.

Buyers today assume:

1) Total access and availability to all competitors due to the Internet

2) Quality is no longer a competitive advantage.  Ford is the prime example.  Their slogan is “Quality is job one”, but the fact is every car maker has similar quality. Buyers feel everyone has equal quality.

3) Personal internet searches are complete and accurate.  Buyers have already done the research on your products online in terms of availability and price. The buyers assumption is they don’t need to talk with sales reps because they already know what they need. It is up to the sales rep to make sure those products are the right fit and the value is seen by the buyer.

4)  Buyers assume they can buy the lowest price without sacrificing value. 

5)  All information either is or should be free.  That is because they are getting so much information for free in other places.

Pancero points out that today;s sales rep needs to be positioned as more of a person who can help a buyer manage all of the data out there, and less of a deal communicator.  Pancero believes a sales rep who walks into a meeting with a buyer and starts talking about products is doing it wrong.  The rep needs to help the buyer manage the data that is out there to get a focus on what is really needed.

Pancero points out four levels of customer service from the buyers perspective.

1) Assumed.  Buyers assume there are some value added services that go along with the purchase.

2) Expected.  Buyers expect many value added services, such as being on time and having products in stock.

3) Impressed.  Doing something that impresses the buyer.  

4) Amazed.  Buyers are thrilled by the value added service.

It is up to the sales team to fill the customer’s perspective with things that are impressive or amazing. If you fall short of the proactive steps to amaze or impress, you are not making a substantial difference between your distributorship and the competition.

Pancero says there are four levels of charging other services are doing that you can follow.  

Level one:  Service is an added value, there is no charge.

Level two:  Charge the tourists.  Airlines do this.  If you are a frequent flyer, you don’t pay for bags. If you only fly a few times a year, you pay for bags. Charge the infrequent customers the value added services.

Level three: Charge to begin.  Charge a consulting fee up front, and if the buyer decides to purchase something, the consulting fee is credited.

Level four:  Charge for the value provided.  No matter the customer, you charge everyone the same amount.

Pancero also points out it is a good idea to charge the buyer for services that cause the buyer the most pain. They don’t want to deal with certain situations, and are willing to pay someone to make the job easier.  Also, you can start charging when you significantly upgrade a service or information control.  They will notice the added value, and be willing to pay for it but you cannot start charging for the same service you gave for free previously.  Customers will leave.

Tagged with

Comment on the story

Your email address will not be published. Required fields are marked *