Standing Out

Is it your products, your people, or your corporate “personality” that keeps your customers happy with the value you bring to a working relationship? Chances are, it’s a not-easily-replicated blend of all these things that makes your company a stand-out competitor. Each company has certain unique, individual qualities that differentiate it from the rest — it’s how they use them that makes all the difference.

Every company has characteristics it can promote as the reason or reasons it’s the better choice. But the true test of differentiating oneself in an era of “me-too” sellers is making sure the customer is acutely aware of what sets that company apart. Getting the message out starts at the top with the company’s “big-picture” vision.

Ukiah Paper’s unique mission statement starts off a bit tongue-in-cheek:

“Twenty-one years ago, three unemployed Ukiahans borrowed $30,000 from their parents and started Ukiah Paper Supply. They soon learned the paper business eats things. It ate a home equity loan, then it ate the home. It ate jewelry, vacation property and eventually a 3-bedroom trailer. Then it ate another one.”

Then the Ukiah, Calif.-based Ukiah Paper, obviously a company with a lively sense of humor, gets down to brass tacks. The mission statement explains Ukiah’s policy of listening to — and acting on — customer and employee suggestions:

“Many times, recommendations on price or product changes, which we then implemented, resulted in a benefit to everyone,” it reads. “We still observe this policy and welcome your suggestions.”

Ukiah Paper’s executives know how this message, which seeps in to every customer interaction, makes the company stand out among competitors as one having veteran salespeople who work hard to make a difference for their customers’ businesses. The company also knows its philosophy breeds customer loyalty. That, says Marlene Shupe, the company’s owner and manager, is what makes Ukiah different.

While having a firm, written mission statement isn’t mandatory in promoting a unified corporate message, it is essential that business executives research, discuss and agree upon the characteristics that epitomize their value. This company vision, or “big idea,” is the first step toward “standing out.”

Beyond Product and Price
Differentiation is not a new concept. While it has always contributed in a business’s success, its role has changed over the years. How? Competition has become more fierce, and — many will attest — a whole lot more abundant.

“If you’re in a business that 25 years ago had two competitors, and now it has 20, naturally [differentiation is] more important and more difficult to do now,” says Don Levin, president of Levin Public Relations & Marketing Inc., in Larchmont, N.Y. “To the extent that the landscape has changed, the value of differentiation has changed,” he adds.

So what is the true definition of differentiation, and how does it relate to the jan/san industry? Industry consultant J. Michael Moore says it includes “identifying and leveraging key day-to-day points of customer contact in ways that create a distinct message in the mind of customers — a message that clearly shows how each wholesaler-distributor is unique and how it delivers unique value.” Moore, chair of the DREF, the research arm of the National Association of Wholesaler-Distributors (NAW), outlined his definition in the preface of the newly released NAW/DREF book on the subject, Stand Out From the Competition! Four Pathways to Differentiate Your Wholesale Distribution Company,” by distribution experts Dr. William McCleave Jr. and Thomas P. Gale.

Distributor survival in this decade will rely on the company’s ability to “include communicating the value of that product and service mix against the claims of competitors,” Moore writes.

Competition can drive down price, but distributors don’t have to resign themselves to lowest-bidder status to make it. Many distributors unwisely focus on price over service, says Levin, which could be a mistake, especially when jan/san products are, in general, viewed as commodities.

“The more that a product is a commodity, the more the company has to find a way to differentiate,” says Levin. “The company has to provide reasons for the customer to buy from them instead of someone else.”

Levin contends that the best way to stand out is for companies to feature their service over products. Not surprisingly, the best service requires hiring the best people.

People, and the attributes and talents they possess, are the most significant mark of differentiation for individual wholesale distribution companies.

Accentuate Expertise
“The ultimate differentiating element is the character of a company, rather than the product mix,” says George Abi-Aad, president of Royal Paper Corp., Santa Fe Springs, Calif. “Product mix is always a necessity, but it won’t be sufficient in facing the next 10 years. Establishing trust with the customer is the first thing in differentiating yourself.”

Trust begins with each point of customer contact. It grows when a distributor becomes a reliable information source to his customers, according to Abi-Aad. His company prides itself on identifying trends — and honing internal expertise related to real-world implications — before those trends begin to affect customers.

For Abi-Aad, becoming an information source starts with an examination of pending legislation.

“If you’re involved and aware of what’s evolving in the state senate, you’ll know what they’re pushing for.” As those changes materialize, you’ll be the pioneer, he adds.

Abi-Aad cites a food-service grading system that has been adopted in California in recent years. The grading system extends down to concession stands in theaters (a substantial customer segment for Royal Paper).

He took notice of the regulations when they were first mentioned in the mid-1990s and followed them through today. “If we were not in-tuned, we would not have developed a program that makes this more readily understood,” he says.

Being on the front end of a trend can get a distributor noticed. “Others come along and copy what you do, but as needs evolve and change even on a minor level, the end user can quickly tell the expert from the ‘wanna-be’ expert.”

Product Mix
The ability to offer an alternative that makes customers’ jobs easier is also a way to differentiate oneself from competitors. Not only does Maintex Inc. specialize in both manufacturing and distribution, it goes the extra mile to provide customized solutions for its customers.

The company’s diversified approach gives it a leg up on its competitors, says Linda Silverman, vice president of sales and marketing for the Los Angeles-area-based company.

Maintex actively promotes its ability to provide custom-made product solutions in the form of specially mixed chemicals and private-label options.

“The fact we are a distributor and a manufacturer is a big differentiator for our company to begin with,” Silverman says. “It creates a unique opening and that leads to other things.”

The company’s chemists have the ability to reengineer cleaning chemicals to replicate or improve them. “And because we don’t buy from a manufacturer, it gives us a price advantage,” she adds.

Maintex’s private labeling operation also puts an on-site graphic arts department at its disposal.

“We can create our own quality literature and training programs, and customize them for our end-user customers,” Silverman explains. “Others are relying on something a manufacturer would make, and they have to fit every square peg into every round hole.”

It’s Got Personality
As a $20-million regional player, H.T. Berry’s main competitors are some of the most well-known national companies in the business, such as xpedx and Unisource. Because of the formidable competition, especially at the price level, differentiation becomes a critical sales tool for the Canton, Mass.-based distributor.

Chris Nolan, company president, says its philosophy in standing apart from competitors is maintaining — and projecting — the independent spirit and flexibility that its competitors lack — a “small-company feel.” Many national companies have high order minimums and special delivery requirements. Nolan says his company tries to buck that type of rigidity, and treat customers as individuals.

“We tailor-make things for people. We give people very particular service,” he says. “A lot of times with the national companies, they lose that flavor.”

Company representatives are also quick to point to the company’s roots when explaining its customer-focused philosophy. In the early days, Henry Berry, the company’s founder, loaded and drove trucks himself as he grew the company. That independent, entrepreneurial spirit remains.

“Customers are looking for a company to step up to the plate. They want more than pricing and product,” he says. “They want the service to go along with it.”

Know Your Niche
Ukiah Paper’s mission statement has been its operating credo since the company opened its doors 19 years ago. Before joining Ukiah, Shupe worked for a company where, on her business cards, it read “service is our motto.” Unfortunately, the claim didn’t ring true, she recalls.

“Service means going the extra mile to me: researching for customers, special orders. When I worked for that company, I was constantly fighting with people to make sure those things happened.”

Ukiah’s philosophy is ingrained in every employee as well. Employees don’t bat an eyelash when they have to make late-night deliveries, help out a customer on the weekend, or help out on a holiday.

“We know our niche,” says Shupe. “The reason we’ve survived is we’re a niche business: we’ve found the people who understand what service means.”

Promotional Campaign
For the distributors who know what their differentiating characteristics are, it becomes an exercise in determining customer awareness of those distinguishing traits. You may know what they are, but do they?

Surveys can be effective in first determining why customers choose you, and second, learning whether they choose you for the same reasons you think they are.

Levin suggests calling 25 customers and a few ex-customers. You might list three or four competing companies, and have the customer rate them in four areas: speed of service or pricing, for example. Have them rate each from one to 10 in these variables.

Once the customer information has been collected, Levin recommends launching an internal training program and an external communication program.

Many executives think the message is clear with both employees and customers, but often they’re not aware of true perceptions in the field. He recommends having short- and long-term plans in place for educating and disseminating the differentiating information to customers and employees.

Sum Of Its Parts
People, personality and products comprise the collective value a distributor brings to its customers. Leveraging those components allows companies to successfully differentiate in a highly competitive environment.

“You have to put the whole thing together as a unique combination of attributes and then capture the customer and hopefully keep them for many years to come,” says Maintex’s Silverman.

The bottom line: “We don’t want to be ‘me-too.” We want to be a leader.”