ARE YOUR CUSTOMERS really buying the same things that you are selling them?
At first glance, this may seem like a dumb question. You have product. The customer takes delivery of it. A lot of times, the customer even pays you for it.
True. But what exactly is the customer giving up his money to acquire?
If we knew the answer to that question, wouldn't it help us sell more and waste less? If we could really lock in on what people want from us, couldn't we concentrate our efforts on giving them more of what they want and less of what they don't?
A truck equipment distributor we visited recently commissioned a survey of his customers and got some surprising results — results that are relevant to manufacturers and distributors alike.
Because he was new in certain niches of truck equipment, the distributor hired a market research company to analyze the market in his area. He wanted to measure how well recognized his company was in the marketplace, identify what customers knew about his company, get the customer to say what he expected from a truck equipment purchase, and measure how well his company fared relative to his competitors.
One of the key discoveries of the research — especially for dealers and distributors: equipment customers tend to buy based on their relationship with the company that sells and services the equipment. The brand of equipment tends to be of secondary importance. The research indicated that the customer tends to buy because of the confidence he places with his local vendor. It is less likely that the customer commits first to a national brand and then searches for a local vendor in order to buy it.
Before we get too deep into this, we have to throw out a few caveats. The input comes from one survey, conducted by one market research company. It involved a limited number of respondents in a relatively narrow geographical area. However, it was professionally done, the questions crafted so that customers had no idea who was commissioning the survey, and the respondents spent almost an hour with the researcher, providing more depth of input than is normally found in a survey.
But the results tend to confirm what many of us intuitively are convinced is true — concepts such as the value of local service and the customer's desire to buy from people he trusts. Despite the growth of the Internet and e-mail, the cliché still holds true: People want to do business with people, and local dealers and distributors remain the manufacturer's face in the marketplace.
The idea that brand is secondary in the customer's buying decision has profound repercussions for manufacturers and distributors.
For manufacturers who market much beyond the local community, a strong network of professional representatives is mandatory. These representatives can be independent dealers, or the manufacturer may choose to represent himself in all the areas he wants to sell. Whether the manufacturer sells direct or uses a network of independent distributors to market nationally, strong local representation is essential in this industry. Selling through Amazon.com is not an option.
The importance customers place on local sources obviously has a huge impact on dealers and distributors. For new, aggressive truck equipment shops that are looking to establish themselves, it means they can flourish — even without premier, nationally known lines of truck bodies and equipment. It means that trailer repair shops that handle customers well are ideal candidates to become the next new dealer for major trailer manufacturers.
For established distributors, it means that all is not lost when a key manufacturer sets up someone else across the street. We know of an instance where a distributor lost its dump body line after winning a large state bid. Jilted by Manufacturer A, the distributor signed on with Manufacturer B and continued delivering dump trucks.
But the key is performance. Not surprisingly, the distributor's survey showed that the company with the best sales growth was also the one with the strongest customer satisfaction scores. Nike pretty much nailed it. You gotta do it.
One last ramification: If the face the buyer sees is the one that counts, what can that face do to be more easily recognized? If national brands play second fiddle to local service, is it enough to lean on the reputation of the national manufacturer? The local guys who build their own name recognition can be a real force in the marketplace — as long as their customer service makes that name a good one.