Thoughtful Thursdays - What does it cost to change suppliers?

All of the above are objections we encounter on a daily basis and can be captured in the two letter word "No".

The immediate internal response is usually "Why?" and back we go to the list of objections.

Today's thought is about a very real reason you may be on the receiving end of one of these objections when you are trying to dislodge competition.

Consider what it will cost your potential customer to switch to your product/service.

Here are a few factors that may help you to quantify the cost of changing suppliers. Once you have this information you will have added an essential sales tool to your arsenal.

• Administrative costs of setting up a new supplier
• Costs of adding additional SKU's
• Disposal of existing inventory
• Time to train staff
• Plant costs if trials are required
• Additional raw material costs beyond your product to run trial
• Costs of sampling if required

In fact, every part of a business may be affected when taking on a new supplier. I am referring to marketing, operations and finance. It can be a decision that is not taken lightly and can often manifest itself in a common objection.

Although price is always important, thinking about the costs of changing suppliers will provide further insights to the real cost. It will enable you to talk intelligently about time to recover those costs and focus on the longer term value by dealing with your company.

On the surface it  may not make sense to change. Take on the responsibility for understanding your customer's concerns and do the research so you can provide a viable response.

It is more than the your price that will make the difference.

Good selling,
Richard