The Changing Face of Competition: Why Manufacturers Should Offer Add-On Services and Enhancements
By James Dorn, President
Today’s end-users have access to a larger quantity of product information and manufacturing brands than ever before. For manufacturers, this means operating in a landscape riddled with fierce competition, product commoditization and end-users who are no longer exclusively loyal to any one brand.
One thing is certain: Incremental innovation at the product level simply isn’t enough to create and maintain a meaningful competitive advantage. In order to succeed, manufacturers must now find ways to enhance the value they deliver to end-users in the form of add-on services and enhancements.
Why Add-On Services and Enhancements Inspire Brand Loyalty
When manufacturers consider how to remain competitive, the first thing they usually think about is new product innovation. Innovation is important, no doubt. But it shouldn’t be your only move. The reality is that as products, brands, and providers proliferate, so do their challenges in the marketplace. The rate of change is accelerating as competitors emulate innovation faster than ever before. As a result, too many companies are competing on what amounts to incremental product innovation. And that means end-users are increasingly unable to meaningfully distinguish between similar products.
Complicating matters is the fact that the distributor’s role has changed. Traditionally, a distributor’s product and application expertise comprised a large part of their value proposition. End-users expected distributors to play an advisory role, helping them to understand their options and find the right product to meet their needs. Increasingly, though, distributors are shifting their model. Many now carry thousands of products from competing brands. With such a large product catalog, they are no longer able to provide the same level of product and application expertise. Because of this, distributors are less likely to act as brand advocates and are more likely to make purchase suggestions based on pricing and availability.
The other problem with a “product-only innovation” approach is that some product categories don’t lend themselves to endless rounds of meaningful innovation that an end-user will value enough to pay a premium for. Some products are so simple, or have been improved upon for so long, that they really can’t be incrementally improved upon much further without net-new disruptive innovation. So, do you continue to innovate at a product-only level? Or do you figure out what else is happening around your products that your end-users actually care about?
For all these reasons, products alone may no longer inspire your end-user to be loyal to your brand. But you can still cultivate end-user stickiness by meeting their needs in a more holistic way. What does that mean? It means surrounding your products with the right package of services and value-added enhancements that deliver value throughout the entire buyer journey.
At Dorn, we believe this represents one of the most fertile opportunities for manufacturers to enhance their overall customer experience, expand their portfolio offerings, create competitive advantage and cultivate brand loyalty.
Identifying and Incorporating Add-On Enhancements: The Dorn Process
In working with clients such as Georgia-Pacific Professional, we use a structured, three-step approach to help our clients identify the right opportunities to enhance their offerings in a way that anticipates and meets their end-users’ needs. Beyond that, we help them identify and communicate their total value proposition so their end-users immediately understand the value they bring. Here’s how our process works.
- Map the buyer journey to identify opportunities. We begin our process by sorting customers into core and non-core segments. Your core segments represent your greatest opportunity to cultivate brand loyalty, so it makes sense to focus your efforts there. Next, we create a detailed map of the buyer journey — starting with the end-user and working our way back. The more fully we understand your core customers and their needs, the more insight we have into the opportunities that exist to meaningfully enhance your products in a way that will matter to your customers and end-users. Typically, this includes identifying the jobs or problems your end-users are attempting to work through when they use your products. For example, let’s say your core segment of users works in a manufacturing plant. What does their typical day look like? What is the full range of tools they use, and how do they approach their work? How do your particular products fit into that equation? In what ways can you enhance your end-users’ experience by making their job or life easier?
- Design upstream and downstream solutions to enhance value. Once we’ve mapped the buyer journey, including all touchpoints, we look upstream and downstream to design value-enhancing solutions. Often, this requires close collaboration with your distribution and sales teams to solve end-user challenges. Upstream solutions are designed to help your customers solve problems before they purchase or use your product. For example, if your company specializes in cutting tools, you might offer CNC programming services to help end-users maximize tool life and cycle time. Other examples of upstream solutions include kitting (such as packaging all the necessary tools and parts for installation along with your product), assessments, engineering services, training services, and installation services. Downstream enhancements might include warranties, quality assurances, maintenance services (or a network of approved service centers), training, and consulting (such as how your customers can increase productivity using your products).
- Identify your total value proposition and craft a narrative to support it. Finally, we work with our clients to help them combine their service and product offerings into a total value proposition. To arrive at your firm’s total value proposition, we inventory your products as well as new and existing services and add-on enhancements. Then, using proof points, we craft a compelling story about what sets your manufacturing company apart from the competition. Next, we connect your total value proposition to your brand by helping your team develop the right messaging and engagement tools to support your total value proposition, including elements like selling stories, messaging hierarchies, sales training, assets and deployment tools. Taking this final step ensures that your total value proposition is both tangible and readily understood by your internal workforce, customers and end-users.
Want assistance crafting a total value proposition that helps your brand edge out the competition? We’d love to help.