When you think of software for manufacturing companies, what do you think of? Software to track inventory and supply chain items? Or something else?
Software for manufacturing companies certainly does all that and more, including tracking sales. It can help you with sales forecasting, sales history, and invoicing. It can also help you ascertain if your sales are profitable, and that’s where it may shed light on your company’s approach to winning sales. Do you sell based on value or price? The two may be very different things.
Value and Price Are Not Equal
There’s a truism in marketing which holds that the price of an item hints at its value. That’s why discounters end their prices with a “9” or a “7”. Psychological pricing holds that such numbers lend an air of discount to the price tag regardless of its value.
If your company gains sales at the expense of value by undercutting pricing, you have nowhere to go but down … and that’s not a good place to be. For example, if your team continually harps on discounting as the way to get more sales, think about what signals you’re giving the marketplace about the value of your products or services if you keep lowering the price tag. Are you saying your items are no longer worth their original price?
Selling on Price Doesn’t Support Long-Term Strategy
Achieving sales goals at the expense of steeply discounted prices builds a shaky foundation upon which long-term strategy cannot hold. If you undercut prices, competitors can easily undercut your pricing, and pricing wars ensue. Customers have no reason to be loyal because you’ve trained them to expect low prices in lieu of value. They defect to the competition, leaving you with no alternative but to continually cut prices until your margins are so slim, they don’t even cast a shadow.
Happy Customers Understand Long-Term Value
The happiest and most satisfied customers on your roster aren’t those who shop based upon price. They are the customers who may pay the most but who understand the value your company brings to the transaction. Relationships with suppliers and a deep understanding of why your products and services are superior to the competition build long-term relationships and repeat sales without devaluing the products through low prices.
Use Software for Manufacturing Companies to Spot Price-Cutting
Software for manufacturing companies, specifically ERP software, can be used to spot price-cutting. A few areas to examine include:
- Forecasting: Tracking products through every stage of their lifecycle enables you to determine whether you’re under or overspending on the raw materials.
- Integrated Information: Integrating ERP information with CRM information can help you identify long-term customers and cultivate valuable relationships.
- Reduced Costs: Because of the information generated and shared in the ERP, costs are cut across the company, from inventory to manufacturing to materials to transportation and even back-office costs. Pass on those savings to your customers without sacrificing value.
Selling based on value always wins in the long term. Pricing wars only devalue your business and products. Build relationships, enhance the value, and use software for manufacturing companies to ensure you are measuring, monitoring, and tracking results throughout the supply chain for a winning sales strategy.
When you need software for manufacturing companies, contact Emerald TC. We can help you choose the right ERP system for your needs and offer Sage, Acumatica, and other software packages for every type and size manufacturing company. Contact us or call 678-456-6919 for more information.