Engineering Firm Shifts Value PropositionAnalysis of their business showed that over 75 percent of their business came from one client.
They had run a steady and profitable manufacturing business for over 25 years. When they came to us the real issue was profitable growth. Analysis of their business showed that over 75 percent of their business came from one client. Every time they increased their capacity, this client would give them more business while squeezing them for price. They never seemed to be able to break the cycle.
Upon closer inspection, it became apparent that although they were a high quality, service-oriented supplier, they thought of themselves as a small vendor to these multinational companies. As a result, they were almost subservient in their approach to these customers.
So, the first step was to build their confidence to relate to their customers, not as a small vendor, but as an equal. It was vital for them to recognize that their customers bought from them because they had something special to offer. It had to be two-way relationship. Understanding their own self-worth and appreciating the value they brought to their customers was the first step. The second step was to create options for negotiating.
Ultimately, we helped them to build their confidence and enabled them to stop being bullied by one large customer. As a result, they secured better pricing, building capacity, diversification and growth.