Adding the Right Value Added Services to your Business

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I just finished a new white paper on Value Added Services, a topic we'll be focusing on heavily throughout the next month or so. We all need to stand apart from competition. It's becoming a lot harder for small and mid-sized companies to differentiate themselves to appeal to new customers, retain existing customers, and add new revenue streams. And adding the right value-added services is key to doing all three.

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Tony Corley is a Sr. Product Marketing Manager at Epicor.

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Adding the right Value Added Services to your BusinessIn case you  missed it, this research paper from Epicor and Benfield Consulting showed some pretty interesting stats around the percentage of sales from value added services.  Notably, the research showed that about 70% of  distribution businesses still bring less than 25% of their sales from services -  even though services typically have much higher margins and tend to be less price sensitive than products. It also showed that services drive more product sales and improved retention.

The takeaway?  Distributors, as a whole, still have a long way to  go when it comes to adding services to  their business - and it's more essential to our long-term success than ever before.

As I discuss in our new white paper, there are three basic steps to adding more services to your business:

  • First, there's finding the right services.  There are three common areas of  the  business to consider: production (like manufacturing and assembly); service (like field maintenance, in­ house repair, engineering, and design); and product (like custom products and staging). How do you determine which services will most benefit your customers? Start by asking them. A quick survey can reveal insight into services that would benefit your customers and it may also help you gauge the price threshold they are willing to pay for  these services.
  • Second, you need to do your competitive research.  Take a close look at the competitive landscape and learn what services other distributors are offering- or not offering.  This will give you both specific ideas about what to offer, as well as a chance to determine what the market is willing to accept with regard to cost and service offerings.
  • Lastly, no matter what you implement or try, you need to monitor the  success and track the ROI. You do this by implementing a service team, using your online storefront, and by leveraging the tools you have in your ERP.

Incorporating the right value-added services into your distribution business can have a tremendous impact on your bottom line, but  it requires careful planning and thoughtful implementation.

Read our new white paper for more detail, or our research report for a lot more depth!

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