Value Provides the Ultimate Competitive Edge
October 22, 2008 by Editor
The Tampa Bay Rays seemed to have everything going their way with a 3-1 lead in the best-of-seven American League Championship Series against the Boston Red Sox, and a 7-0 lead late in game 5. That is about the time when the force of nature known as the Red Sox mighty offense caused a significant shift in the competitive environment. The Sox came back to win game 5 and game 6 to force a pivotal game 7. But this didn’t turn out to be a crash and burn story for the Rays. They overcame the momentum shift and got back to the doing the things; namely starting pitching, solid fielding and timely hitting; that helped them win the American League East title. The result is that they are going to their first World Series against the Philadelphia Phillies. There are many CPG companies who have experienced the same thing recently. Good times have been derailed by force of nature type economic factors and unprecedented competitive forces. The October issue of Willard Bishop Consulting’s Competitive Edge suggests that manufacturers can follow the Rays example by sticking to the knitting (or hitting as it were). In this case it is providing value to their customers. Doing so can help them overcome the tough times and ultimately win the day.
As we were reminded in yesterday’s monthly NARMS webinar hosted by Mark Hunter, “Winning Sales Strategies in Difficult Times,” value is defined not by what the customer pays for a good or service, but by the benefit they derive from the service. Mark reminded us that this is quickly forgotten as competitive pressures mount. In the article for Competitive Edge, author Jim Hertel concurs, “Economic pressures on retailers can quickly translate into margin pressures and price increase pushback for suppliers. As a result, suppliers need to understand, improve, and get credit for the total value they create beyond product and price.” Hertel says there are four major levers that suppliers can use to add value and get credit for it: increase demand, reduce cost, increase merchandising impact and develop an effective go-to-market approach. It is in the latter two where NARMS members have an opportunity to add value to our customers, as they add value to theirs.
Hertel goes on to say that in order to accomplish this, suppliers may need to change the way they engage their customer, and key among these are shopper insight and shopper marketing capabilities. Again, NARMS member ears perk up.
Now that we have the point in scoring position, it’s time for the big two-out hit. Tuning in to resources like the NARMS Webinar Series, Willard Bishop’s Competitive Edge, and other such studies and publications can be a great aid in identifying areas where we can help our customers add value. In doing so, we establish our companies as a vital and reliable part of the go-to-market system and not just a switch-on service that is far too susceptible to competitive and economic pressures.