The COVID-19 pandemic has taught us many lessons, not the least of which is the value of a reliable supply chain.
We’ve all felt it. Grocery stores without food, liquor stores without whiskey, lack of inventory with everything from air conditioners to bicycles. In the South, there was even a period of time where Bojangles restaurants ran out of chicken fingers (you would have thought the world had ended).
It’s become crystal clear that the businesses with a reliable supply chain have a distinct advantage over their competitors who don’t. In many cases, that advantage is just having inventory to sell.
As a supplier, it’s critical you 1) shore up your ability to deliver and 2) ensure your customers recognize the value of your reliability.
Most of your customers face significant losses from even one day without inventory (or for you service providers, the services that keep them efficiently operating). To help them realize the severity of a one-day shut down, do the math for them. What is one day worth to your customers? I’m willing to bet it’s a huge amount.
If you can become a reliable supplier, it’s time to price for that ability. To be clear, I’m not suggesting price gauging, like someone selling $20 water bottles after a hurricane blows through. Instead, I’m suggesting you abandon the idea of discounting your price to close a deal. It’s time for you to be paid for the value you provide.
At Holden Advisors, when we speak about value, we address increasing your customer’s revenue, decreasing their costs and/or minimizing their risk. Our clients typically find the first two sources of value easier to quantify, but in the era of COVID, it’s the third that can make the biggest difference to your customers.
As part of the selling process, have a conversation with your customers about what a reliable supply chain would mean to them. Do the math and then validate it with them. It’s okay to let your customers change your assumptions because when they do, they begin to take ownership of the quantified value. Your ability to reliably deliver goods and services becomes real in their eyes. It’s no longer a sales pitch and instead, becomes a lifeline to their continued success (or, in some cases, existence).
Once your customer internalizes your value, the conversation about your prices has completely changed. The conversation is no longer about you discounting to close the deal, but instead, about your value as a reliable supplier. And, in our COVID-influenced markets of today, that can ensure you’re paid what you’re worth.