One of the great untapped sources of information in your industry are your customers. As a famous quote by Bill Gates doing the rounds on social media states, “Your most unhappy customers are your greatest source of learning.” Finding out if price is a factor in your customer’s discontent can form a base to your pricing strategy.
This is a philosophy supported by Becky Sheetz-Runkle, author of ‘Sun Tzu for Women: The Art of War for Winning in Business’. She recommends the following good business practice, “Whenever you win a new customer, find out who they used before, and why they switched to you (i.e. the reason they were dissatisfied with their previous supplier). Do the same when you lose a customer—identify what they preferred about your competitor.”
If price was an issue, it is important to learn from the experience and study the market. One useful tool for this is use online sales sites to compare prices and gauge what the ‘going rate is’. Websites such as Alibaba will sell almost anything (including industrial chemicals), whilst other companies, like Spotchemi offer an E-commerce hub designed specifically to serve the chemical industry. Whilst this article must declare that it is paid for in part by Spotchemi, this does not deny the fact that such a service allows price tracking of wholesale chemical prices from actual offers to buy and sell in real time.
If you do not want to track prices yourself, then it may be worth using other industry specialist services. As Sheetz-Runkle says, “I recommend routinely tracking what the industry analyst firms, like Gartner, are reporting about your industry, as well as trade associations and advocacy groups. These organizations are doing research and studies that evaluate the people who are and should be your competitors. What are they telling you about where the industry is trending? Where are the unmet market needs that you can fill? How are prices trending”
Another strategy to find out more about your competitors is to hire employees from competing firms—especially those from the sales department. As Sheetz-Runkle suggests, “No one knows more about the inside of those organizations than the employees,” she says. “Find out all that you can about how these companies operate, and more importantly, what’s on the horizon for them? Where are they taking their business? What markets are they venturing into? How are they leveraging innovation to cut costs and advance productivity? Where is the highest level of dissatisfaction with their products or services? No one has more and better intelligence when it comes to sales than disgruntled sales people.”
If hiring new staff is not a possibility then a much more cost effective way to gain information on your customers’ prices and actions is to simply call them up and play the part of a prospective customer. According to Jordan Harbinger, the co-founder of ‘The Art of Charm’, “You’d be surprised how often companies will tell you everything you’d like to learn over the phone, especially if the question is phrased in a context that makes sense. For example, if you want to know how many people work there, you can say: ‘I’m looking for individualized attention, and my fear is that your organization is too large, and I’ll get lost in the shuffle. How many coaches do you have on staff? Oh, wow, that’s quite a few. How much support staff do you need for a team that size?’ This approach has served me very well.”
Tips like these can be very useful to finding out what your competitors are doing and how they are pricing their products. Do you know of any other ways to use your competitors to help you price chemical products?