Lions, Tigers & Bears

Filed Under (Uncategorized) by Don on 03-05-2007

The business jungle is alive and well.  The predators have us surrounded.  What are we to do?  Office Depot, Office Max/Boise, Staples, Quill and the rest are waiting in the shadows and you are the prey.  They do an effective job of keeping us on our toes.  We spend our time reacting to their latest sales and marketing tactics instead of beating them at their own game.  They have deep pockets for massive print and media spending that most independent dealers could never afford.  Instead, we depend on our reps and our service to make up the difference.  How’s that working for you so far? 

These power channel players have done such an effective job of brainwashing consumers into believing that because they are big they naturally have the best price and best service.  Let’s be frank, their service stinks!  The majority of independent dealers I know and have spoken to can take any big box store “to the cleaners” when it comes to service.  Consumers have been “programmed” by their marketing and advertising into the belief that the independent dealer can’t compete on price.  More hogwash!  The independent dealers know these facts so why are we constantly reacting instead of acting?

We consistently give up margins on products to appear more competitive.  If you pay attention to their internet pricing you will notice that prices are constantly changing, often daily.  The manufacturers are not changing the prices every day so why are the big boxes?  Because they are doing a far superior job of market research than we are and they are making higher margins on products that we are selling at much lower margins for no valid reason.  Some of this is due to the matrix pricing we receive from our wholesalers. 

When you are in the jungle and up to your ears in predators and just ran out of ammunition, what do you do?  You improvise; you get creative and use the tools you have available.  You create your own prospecting materials with aggressive pricing on the products you know you must sell at low margins.  Don’t depend solely on the wholesalers to do this for you!  They do a good job by providing catalogs and specialty catalogs but the bottom line is you know your specific market and customer.  You need to price your most aggressive prospecting materials, not someone located in another state.  The consumer mentality has been changed, thanks to these big boxes, to the point now that consumers expect you to “give” them free merchandise just to do business or to get the order.  Again, be creative about what and how you give them these free gifts. 

Independent dealers are in a unique position to provide great customer service that the predators could never provide.  We can exceed their abilities in many ways and we can do this by educating the consumers, provide a great buying experience, build our personal relationships and be an active force in our local communities.  A few years ago I attended a table top show for a local school system.  Office Depot also participated in the event by donating the lunch meal for everyone in attendance and presented a short presentation about why they should buy their school supplies from OD.  I was there to represent the only local office supplier in their area.  I had been made aware in advance that OD would be there so I had a short PowerPoint and before I began I placed a white paper bag in front of each attendee.  I started by asking everyone to open their bags and look inside.  I said that what they found inside represents the level of personal commitment to service and their local community school system from Office Depot.  The bags were empty.  My first slide showed our staff personally delivering pencils and notebook paper and ring binders to the school children that we donated.  There were other slides that showed our community involvement and a chart that detailed how much of their local monies actually stayed in their town if they did business with OD, which of course is substantially less.  Ten minutes into my PowerPoint I saw the OD store manager leave the room by the back door.  We earned their business by being creative and sincere.  We kept their business with our service and commitment and the relationship we built over time.  You can do the same.  You already have all the ammunition you need to slay the beasts of the jungle.  I wish you the greatest success in your challenges!

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