Here’s how one distributor demonstrates how the value-added services it provides customers make it stand out from the competition.

When a major customer told Jim Ruetz that his company and other distributors were all the same, it made Ruetz think. From a purchasing manager’s perspective, Ruetz realized, most distributors really do look the same. So he asked himself, how can we demonstrate that what we do makes us different from all the rest?

Ruetz, president and general manager of All Fasteners, the sister company to All Tool Sales, both located in Racine, Wis., recognized that his company, like many distributors, did a poor job of documenting the value-added activities it performs for customers. For example, a purchasing director might not be aware that an All Fasteners account manager spent 40 hours during the last quarter working with various engineers at the customer’s plant on multiple cost-savings projects. Or, the plant manager might be clueless about All Fasteners’ progress toward its goal to cut costs by $25,000 through these projects.

So Ruetz decided to develop a quarterly report that account managers could share with key customers.

"It all started with me sketching something on a piece of paper and saying, ‘This is the kind of information I’d want to see if I was a purchasing manager.’ It kind of grew from there," he says.

The reports were later dubbed "Platinum Reports" because they’re given only to customers that have achieved the highest classification in the company’s Platinum, Gold and Silver customer categories. They include an executive summary and a detailed look (five to seven pages) of activities All Fasteners performed for that customer during the past quarter, in addition to inventory reviews and performance reports.

"Customers forget what you’re doing for them," says John Hohenfeldt, vice president of corporate systems. "The Platinum Reports allow us to take a snapshot of our activity so customers don’t forget what we do for them."

The first page lists activities that took place during each month, including total sales dollars, on-time delivery, complete orders and quality percentages. It also lists the number of deliveries, the number of rush orders, how many hours floor stockers and account managers spent in the plant, and cost-reduction goals.

Subsequent pages show special projects that customer service representatives and account managers worked on. For example, this is where All Fasteners might remind a customer about the time a CSR recommended a new spray-on lubricant that was 10 percent less expensive than what the maintenance department used previously. It may be the most valuable section of the report, because it provides details about important activities that take place in the normal course of business that otherwise might be forgotten.

The final page of the Platinum Report is the executive summary. It provides an at-a-glance look at activities during the quarter. Because it’s intended for upper level managers who don’t have time to read a lengthy document, it lacks some of the detail found elsewhere.

In order to make the biggest impact, account managers usually present the reports in person.

"It’s a fun feeling to be able to sit down with a customer and say look what we did last quarter and look at what our goals are next quarter," says Hohenfeldt. Some customers have taken the reports and shown them to other suppliers in the hopes that they will develop similar documentation.

It took about a year to fine-tune the format and to get account managers and customer service representatives up to speed on its use. To make sure they don’t neglect the reports, Ruetz gives account managers a 30-day deadline to turn them in each quarter and also tied part of their compensation packages into completing them.

All Fasteners started using the Platinum Reports about a year and a half ago and continues to revise them, using feedback from customers. Ruetz is confident that they help customers make apples-to-apples comparisons when they receive a low-ball bid from another distributor. The next time a buyer is tempted to switch to a supplier with a lower price, the account manager can pull out a stack of Platinum Reports and ask, "Are you sure they’re going to provide all of these services for that price?"

"Customers love it," Ruetz says. "They’re not used to seeing something like this. It’s not as if they’re looking at my reports and comparing them to my competition’s. Many of my competitors don’t have anything this elaborate."

This article was prepared exclusively for ValueAddedPartners.org, Copyright 2001.

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