At the upcoming IFDA (International Foodservice Distributors Association) SMart Conference, a discussion titled “What’s Your Price? Now What?” will tackle the current selling paradigm around price.
The two featured speakers—John Paré of Pate Dawson–Southern Foods and Rob Keeney of F.AB—sat down for a discussion about price, transparency, DSR/customer interaction, and the need to make the customer the hero of the story. This SMart Minute shares an excerpt from that conversation.
John Paré on the need for a discussion around “What’s Your Price? Now What?”:
“The art of foodservice selling has completely evolved over the last 50 years. Customers have changed the way they buy and caused an evolution that the distribution industry has got to deal with. We have created this highly commoditized, price-driven marketplace. Many of our customer interactions have become more about transactions.
“It seems as though the general foodservice distribution selling model is based on price, promotion, program—and things that are based more on pricing manipulation rather than bringing useful information and inspiration to the operator.
“This, to me, creates a fear factor because the buyer may feel they are missing out if they don’t object with pricing. It has almost become instinct for people to say ‘What’s your price?’—just to see how low they can get a DSR to go.
“Amazon is a great example of the era of customer control. Amazon has, in a sense, provided a vehicle and process that has transformed the customer retail experience.
“That is something the distribution business has to consider. For sales growth and retention, both our leaders and frontline sales professionals have to re-evaluate the sales process. The sales experience with the customer has got to be relevant and tailored to that customer’s needs rather than the needs of the distributor. In the end, I think this practice will serve both the customer and the seller better.
“So essentially, that is what we are going to tackle on stage both in a micro and a macro sense.”
Rob Keeney on putting the customer first and his definition of transparency:
“If you think like your customer, then you approach it as customer-centric pricing.
“We teach a module called ‘customer centric pricing.’ So if you give information to your customer in a way that makes sense to the customer, including the price, then that is the definition of transparency.
“Now, you brought up the term transparency, and we have a disagreement in the community about what transparency means.
“Some people are of the opinion that in order for us to be transparent, our customers need to know everything about my company—my distribution company—and how much does it cost me to move a case. I don’t agree with that.
“To me, transparency is what the customer cares about, which in most cases is whether the cost has come up or gone down. If that happens, I just want to know about it. Don’t surprise me when a delivery happens and the price is $2 more than the last time I bought this, regardless of when I last bought this. The customer just wants to know if something on price has changed. To me, that is the essence of transparency.
“The idea that transparency means revealing all my internals harkens back to what John mentioned about Amazon. If I go to their website and want to buy a piece of computer equipment, I don’t care what their operational costs are to run their warehouse. I just want to know how much it is and what’s the shipping going to be and what’s the tax going to be.
“Lack of transparency is hidden costs that I have to pay that I did not know about. Transparency is not about the customer knowing what the operational costs are for the warehouse.”
At IFDA SMart 2015, take part in this conversation about changing the sales paradigm. The conference is scheduled for July 12-14, 2015, at the Ritz-Carlton New Orleans (LA).
Click here for full conference information.