I have one client who is providing a project management service to their customers that the customers never even imagined. This service is at no cost to the customer. My client benefits by now being able to control additional elements of the project, thus minimizing field changes and ultimately reducing his total costs. Since none of his competition has this ability, the service clearly differentiates him from the competition. The service also offers savings to the customer and builds a bridge of partnership in the often-adversarial world of contractor/sub-contractor relationships.
The figure below is helpful in visualizing the concept of holistic product design. The inner rings are the aspects we most often regard as product design. This is also where the heavy lifting and high resource demand of product design reside. It is in the outer rings that differentiation can be achieved at a relatively minor level of implementation cost. Most of these “augmented” and “intangible” attributes can be changed or added to existing products without costly revisions to their design.
Do not allow the evaluation of proposed changes to be biased by a litany of self-imposed barriers. Define the true issues to be addressed; then develop the strategy to solve them. Painted doors and drawer fronts on stained clear coat cabinets is a perceived problem for some manufactures, only because they haven’t done it before and it doesn’t exist in their “standard” product offering. Don’t allow self-imposed false barriers to block your access to a broader market.
Not all customer accommodations will result in higher price, but they can accomplish the goal of differentiation and thus increase sales volume. Customers are not willing to pay a significant premium for an interactive website that allows them to participate in the design of their project or to monitor status of their orders. However, they are far more likely to favor you with orders over your similar priced competitors who do not offer these services. Access to an interactive web site will also invite potential customers to your table who might otherwise not have “stopped in” had it not been available.
Utilize technology you already have and extend that power to your customers. Custom products such as store fixtures can utilize common CAD formats with customers through easily implemented FTP (File Transfer Protocol) applications. This will encourage interactive collaboration on the part of your customers. It also holds the potential of shortening the design/approval stages of projects that seldom add to cash flow.
After-sales accommodations can offer attractive incentives to prospective customers, but be sure you understand the potential cost that might be incurred. Those potential costs may be less than you imagine. One major developer that I know offers a ten-year new home warranty at a slight premium. Knowing their quality isn’t higher than the competition who offers only the standard one-year warranty I questioned how they could do that. The answer was rooted in understanding their market; their average buyer moves within four years and the warranty isn’t transferable. They experience a very low claim level on an option that most buyers elect.
After-sales maintenance can offer significant benefits to both you and your customers. It can provide a new revenue stream and at the same time keep you connected to your customers and future business.
Direct delivery to the customer can be a valuable tool in building ongoing relationships. Make certain that the delivery people represent you well, are accommodating, well mannered and present a professional image. Don’t allow a potential sales tool to become a liability through poor management of those who become the “face” of your company.
All of these initiatives have one thing in common; they cast a wider net. Having a green image, for example, does not mean that all your customers will ultimately buy green; it does mean that some of those customers stopped at your door precisely because you presented a green image.
As you look for ways of improving your market penetration, keep in mind that you have more options than simply new product. Look at your product design arena in a holistic way and consider adding attributes to existing designs that can expand your market, or offer improved pricing in your existing market.
The market for most of our industry is constrained. Increasing volume, or even holding steady, will require an increase in market share or moving into new markets; that will not happen by doing business in the same old way.