How Does a Customer Perceive Value – A Case Study

Allied Technologies is a manufacturer of Special Purpose Machine (SPM) and friction welding machines in Bangalore. The company had received an order to manufacture tablet filling machines from one of its clients. Servo drives is an important sub-assembly for this application. Being an SPM, the company had invited a market leader called MACK servo ( name changed) along with a medium sized company called Leonardo Automation. In the morning session, after the client gave a presentation about the SPM dimensions and application, the senior managers of MACK Servo started pitching in their products. The MD was a bit perturbed as he could sense the sales pitch. He was expecting the vendors to provide a solution rather than pitch a product.MACK Senior managers changed the approach sensing  the client discomfort.

Mr. Anil Purohit, the Director from Leonardo is a person known for his technical expertise. Rather than speaking about his servo products; he started speaking about the machine design and the relevance of the number of units needed in the SPM as suggested by the design team ( of the client) At one point of time Anil even  suggested the client that the same result can be achieved by using less number of servo drives. The design team was quite apprehensive as the vendor was challenging the former’s competence.. However the client MD gave  a patient listening to Anil’s proposal.. The meeting with both the vendors was over prior to lunch.The team from MACK were thanked profusely for their efforts. Anil was asked to wait.

After lunch the MD called for another round of  meeting with the mechanical design team where Anil was also invited. The team listened to his novel idea of bringing down the machine cost by innovative design. A decision was taken where Leonardo was considered as a sole vendor and the order was placed on it. The price of Leonardo Servo was higher vis-à-vis MACK. However the overall cost was lower due to an innovative design approach.

This was achieved due to the technical expertise of Anil about his product but also for value he brought for the client’s  machine design.

Quite often salespeople feel price is the main factor in today’s business environment. However it has more to do with your technical expertise and what value your bring to the customer. Can the salespersons change their paradigm from price to cost of ownership?

Rajan Parulekar, rajan@paradigm-info.com

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