The Gilman Company Blog

What other problems do your customers have?

Isn't it frustrating? You product or service is great. It's going to solve a lot of problems, move your potential clients forward, make them more happy, improve their lives, save them tons of money, and no one can be more convincing or charming than you, but....

At least address the issues that are surrounding the problem that you're trying to solve for your clients, for your buyers.

How most offers work:

1. Here's the stuff
2. Here's why it's better than the stuff other people are selling and why you need it
3. Here's how much
4. Wanna buy?

Talk to your clients or customers about what they need, the unique problems they have and sort those issues out. Anyway, you're an expert in your industry, right?

Ask a question.

How not to pass your costs along

At the end of the day, you are passing along certain costs to your customers. There are many ways to pass these costs along.

When you are in a market where price is everything (wireless service, banking, etc.), a market where your product or service being 5% higher means you lose sales, you end up with things like hidden fees, watered down products and services, etc.

If you're not in that type of market, why would you ever consider inviting consumer angst with something like a "fee" or an additional cost when you can pass your cost along strategically?

Get a Gilman consultation.

How to select the cost of an extended warranty

You've decided that an extended warranty is a great product to add to your catalog. Wonderful. Now, how do you decide the macroeconomics of an extended warranty?

Two issues here, perceived value and cost.

Perceived Value
One way to think about the pricing of an extended warranty is to understand what an extended warranty is to the consumer. What you're selling is a type of insurance on the consumer's investment in your product. So, how much would the average purchaser of your product be willing to pay to guarantee that product will be usable for a period of time which is longer than the basic manufacturer's warranty, say, one year from the date of purchase? Depending on the nature of the product, 10-20% of the advertised cost of a product could be a good place to start.

Cost
Along with perceived value, how much it will cost your company to make good on your extended warranty program will mean the difference between a successful program and a crashing business failure. Exploring an extended warranty program is a great way to reel in quality control issues and think about advancing design concepts that limit mechanical failure or wear and tear issues that may be characterized as mechanical failure.

Note: There are many pitfalls in the world of warranties. A good approach to a warranty program will require a thorough analysis of development costs, pricing, margins, customer service costs, logistics costs, customer satisfaction, distribution channels, sales channels and others issues.

Get a Gilman consultation.

Doing Business with a Mass Market Retailer

Below is a short piece that I wrote for an online column earlier this week. Just a few tips and thoughts for growing companies on doing business with a mass market retailer.

Getting your product on the shelves of a large, mass market retailer, such as Wal-Mart, Target, or any other large retailer is no small task. It is certainly possible, but business owners can expect large retailers to turn the screws on any standard product distribution model and stretch product distributors, manufacturers and brand owners to new extremes.

One thing I have learned in dealing with companies like Wal-Mart is that having a product on Wal-Mart shelves is not for everyone. Doing business with a large retailer could change your entire business model and your approach to product development and product and brand integrity. Depending on what your objectives are, it could be a change for the better or for the worse. You'll have to decide if that's the type of change you're willing to go through. You will also have to be much more in tune with your production model, as you will need to squeeze every tenth of a cent out of your production costs while maintaining a mandated level of quality in order for any transaction to be profitable.

If you haven't already, you will also have to design a new segment of your business that addresses the all-new problem of a substantial increases of returned products. In order to build goodwill with shoppers, mass market retailers have especially liberal return policies, which distribution, manufacturing or product development companies need to foot the bill for.

Finally, macroeconomics will be especially important to your efforts in working with a mass market retailer. Here, unless you're working with a well-known brand, your company will be operating an margins that are thinner than a razor, so you'll have to audit every cost imaginable in doing business with a mass market retailer to insure that you can turn a profit, including costs like customer service, returns, production, packaging, logistics, etc.

These are just a few of many general issues your company will have to face in a deal with a mass market retailer like Wal-Mart. Working with mass market retailers can be especially rewarding, but that reward doesn't come without a cost. Do a lot of research. When your done with the research, do more research. Then start with a simple cost/benefit analysis and make an informed decision on whether working with a mass market retailer is the right choice for your company.

Get a Gilman consultation.