From MAGNET: Market Diversification

Each month we’ll be featuring a blog post from our friends at MAGNET (Manufacturing Advocacy & Growth Network). MAGNET’s mission is to support, educate and champion manufacturing in Ohio with the goal of transforming the region’s economy into a powerful, global player. You can visit MAGNET online at

This post originally appeared on MAGNET’s  Manufacturing Success blog and is reposted with permission.

Market Diversification: What Value Do You Bring? Part 1

Ken Walker, Senior Business Consultant, Program Administrator for Market Diversification

By Ken Walker, Senior Business Consultant, MAGNET

You’ve made “The Decision.”

No, I’m not talking about LeBron leaving Cleveland—I’m talking about the decision to move your company’s products and services into a new market.

Maybe it’s an allied market that uses the same type of products you produce.  Or maybe you’re selling the exact same product but to a different kind of customer, for example consumer instead of industrial.

You’ve decided that, for the strategic growth of your company, you are willing to make the investment necessary. You’ve researched this new market’s key customers and key competitors.  Your organization is primed, ready and willing to conquer this new territory.

However, before you go charging off, make sure the “new land” is receptive to your invading horde. In other words, in this new market, is anyone willing to buy what you are selling?

Consider: Why Might Customers Choose to Change?

When you decide to enter a new market, unless its an emerging technology market, it is very unlikely that you are the only supplier to the market. In most instances, existing suppliers will have been established for years. Even in markets where the barriers of entry are relatively low, it’s not easy to get customers to change without a compelling reason.

Here are some important reasons why a customer might be willing to change or add to their supplier base:

Not enough suppliers: Some industries have trouble maintaining a vibrant supply chain. The aerospace industry is an example of this, particularly if they are bringing to market a new plane. If you can meet standards or requirements, like AS9100 certification, a me-too product just might be successful.

Dissatisfaction with current supplier: Poor quality. Overpricing. Late deliveries. Poor service. These missteps can sink a supplier with any customer. For example, Motorola created the cell-phone market. But its lack of vision allowed new entrants to invade this exploding market space. The result: Motorola was marginalized in the market it created. Opportunities such as these can be exploited, allowing your company to be successful with a me-too product.

Supplier diversification: Sometimes customers just want to diversify their supply chain. If a customer is not comfortable having just one or two suppliers for a key component, they may be willing to slice up the pie and let you in.

Price: Customers are always looking for lower prices—and high value.  If you are willing to compete on price, you may be able to buy market entry in some cases—until someone else is willing to undercut you.  And there is always someone else.

Better value: In the end, customers are going to buy your products and services for the value they perceive. In most cases, believe it or not, this value goes beyond price. Yes, you have to be competitive, but if a lower price is all you have to bring, you won’t be at the table long. Someone will undercut you. Or you’ll find out that, in the long run, this market just isn’t worth your effort.

Define Your Company’s Value Proposition

So how do you define your value proposition for a new market or customer?

First, understand your own company’s core competencies. Understand what it is you do better than anyone else in your current industry.

Are you the low-cost manufacturer of widgets?  Do you provide just-in-time service?  Are you the technology leader?  Does your product provide better performance?  Lower cost of ownership? Easier to maintain?

Talk to a number of people in your organization to gain consensus on this important point.  You’ll find different departments may have different perceptions on the reason for your success in your current marketplace.

Once you really understand your company’s key value proposition attribute, translate it into why customers currently buy from you, why customers keep buying from you and why new customers would want to buy from you.

Here are some examples of major corporations, core competencies and how they translated them into value propositions:


  • Core Competency:  Manufacturer and Distributor of coatings and related products
  • Value Proposition:  Equipment, supplies and solutions to get the job done.

American Greetings

  • Core Competency:  Creating expressive ideas in words and images
  • Value Proposition:  Enhancing consumers relationships through social expression


  • Core Competency:  Applying technology to real world customer needs
  • Value Proposition:  Harnessing Innovation for your benefit

So what is your company’s core competency?   What’s your value proposition?

Once you know and understand these critical attributes, it’s time to effectively communicate them to the new market and go after those new customers.

We’ll cover that in Part 2.

Click here to read the original post.

Share this:

B-to-B Marketers: What Are You Doing to Retain Customers?

Depending on what industry you’re in, the rule of thumb is that it takes anywhere from 5-9 times more effort to get a new customer than to keep an existing one. So why don’t we spend more time nurturing the ones we have?

We’re all guilty of taking customers for granted sometimes. I read an article on, The 7 Ps of Customer Retention that I thought was appropriate. Here are some highlights:

  1. People – It’s about building relationships. Treat your customer as a person.
  2. Product – Make sure your product is up to what you promised it would be.
  3. Place – How does a customer communicate with you? Make it easy.
  4. Price – You need to take care and give them a good price. They expect you to take care of them.
  5. Promotions – Since they are already your customers, you know what they are buying and can make suggestions for other potential products/services they may be interested in.
  6. Processes – Customer surveys, social media monitoring and customer engagement tools to understand how each customer is engaging with you.
  7. Positioning – Know who you are and clearly communicate that to your customers. Keep the message simple and to the point.

Those are some suggestions on how to keep your current customers happy.

Share this:

What’s Your Company Value Proposition?

Sometimes we get caught up in selling product and making quotas and we lose site of what we’re really selling. If we’re just selling widgets, we’d better have one no one else has. If not, why should someone buy from you?

Today we have a guest post from Alan Sipe, President and General Manager of Knipex LP in Chicago. Alan is a dear friend, an old client and knows a few things about selling high-priced hand tools. Alan will share some thoughts with you regarding Value Propositions.

A lot is written about the topic of presenting your company’s Value Proposition and surely you have passed this along to all the semi-professional golfers and lunch buyers in your sales department…haven’t you?

So how do you know if your sales team has read the articles, thought about and formulated a basic company Value Proposition statement to use in their daily sales calls?

Simple…grab the first sales team member that walks by your office door and ask this question:

  • “If a customer were to say to you that generally our prices are a little higher overall than our competitors,” how would you reply to that statement specifically?
    • Be quiet now and don’t help them with an answer.
    • Do not let the salesperson ask you a whole bunch of qualifying questions!
    • Have them answer that specific question.

 Hopefully your salesperson will have a quick and precise answer like:

  • We maintain heavy stocks on the inventory you need and buy from us.
  • We deliver on time and packed correctly.
  • Our invoices are correct the first time to save your accounting office time and money.
  • We either have or have quick access to the product technical answers you need.
  • I bring you new ideas and products to help you do your job better.
  • We have the best repair shop in town.
  • You can count on us to be here when you need us, we have been in business for XX years.
  • And maybe even…We stuck by you with a good credit line when the business was tough.

If you get an answer like any of these, you have work to do:

  • Let me go back and review your pricing.
  • We give you the best prices we can.
  • Our suppliers are raising their prices to us.
  • Let me think about that and get back to you.
  • What competitor is cutting their price?
  • If I give you a 5% discount overall, would that help? (If you get this answer, you really have problems and give your team way too much pricing authority, but this is an article for another day)

Put on your sales manager’s hat, write down a list of your company’s Value Propositions and make sure your sales team can rattle them off quickly and with conviction.  Don’t be a sissy…make it happen!

What are your thoughts on Value Propositions? Does your company have one? Do you know what it is?

If you like this post, please share it with a friend.


Share this: