What’s Your Value Proposition?

When it comes to the way foodservice operators purchase equipment and supplies, it's no secret that the internet dealers have changed the game, just as cash and carry dealers did years ago in providing a new venue for customers. The difference now is that instead of a handful of cash and carry stores popping up causing a local sales rep grief, the accessibility of the online marketplace has greatly expanded the exposure of lower pricing to end users.

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Brad Pierce, President, Restaurant Equipment World
Customers demand the lower "online" pricing, yet still expect to be treated in a full-service manner. So how do we as an industry continue to respond to operators' desire to buy on price yet deliver the value they demand?

As one of the original internet dealers in the industry, I'm probably the last person you'd figure would approach this topic. The truth is that it likely affects me to an even greater degree than most since I've got a contract, cash and carry and internet operation all under one roof. For dealers it is one thing for a customer to come in with a printout from a website a thousand miles away, but it's much more personal for that printout to be from my own website that's being operated just a few feet away.

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So, how do we get away from selling on price alone and instead sell the value of the services we provide? While the conversation is being framed from the dealer perspective, the fact remains it is one that every foodservice company needs to address. It all starts by asking your staff one simple question, "What is our value proposition?" If you're greeted with blank stares or fumbling words, honestly, your customer deserves to pay the lower price they've seen online. If your staff doesn't know how to quickly and flawlessly describe the value of the services you provide, it's not reasonable to think your customer will be able to see that value either.

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Let's start with looking at the value proposition of our internet operation. We've got well-trained, educated salespeople who are very efficient. We handle orders quickly, coordinate shipment of the merchandise and follow up after the sale to ensure everything was executed properly. We use technology heavily to gain benefits in the order fulfillment process and pass along lower pricing to the customer. It's a win-win situation where we can operate in a fashion that still maintains margins while our customers save money. That's a good value for everyone involved.

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Now, let's look at the value proposition of our cash and carry operation. In this scenario, we're warehousing and displaying equipment and allowing personal demonstrations of products, which require more time and labor. The customer's hand is held as they navigate through every aspect of the buying experience from specification to delivery. The value proposition here differs slightly from the online example and we will need to derive more margin from these transactions to continue providing these services.

Lastly, the highest price division of our company is our contract division. It's important to note that I didn't say we were high priced, but rather that it was the highest price division of our organization. There's a big difference between simply charging more versus charging more and providing more value. In the case of our contract division, like many of our dealer peers, the customer can expect expert advice, layout, design and coordination of their project. The cost is higher, yet the value is phenomenal for a customer who wants for everything to be done right the first time with minimal effort on their part.

The bottom line is I'm happy with whichever division of my company a customer chooses to engage. Each division offers a unique value proposition that we clearly define and will do a good job of servicing the customer's needs within those boundaries. The key concept is being able to give a brief, yet extremely clear, elevator speech to define the value the customer will get with each service and price point offered. This allows customers to decide what services they need and that goes well beyond a simple low price discussion. So, what's your value proposition?
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