Value Added is the cornerstone of a successful business. In order to make money, on a good or service, you have to be able to sell it for more than it cost you. The best way to add value is to make something more desirable. By improving a product’s utility or perceived value, the customer wants it more and is willing to either pay a premium or buy larger quantities. These changes in behavior result in more earnings for the seller and, ideally, a happier customer.
Concrete producers and construction materials retailers often overlook the potential of value added products such as decorative concrete. There is a tendency to be put off by the additional effort and inventory costs associated with carrying an additional product line. There is a desire to focus on core value products that can be easily sold in mass quantities and with little effort. These products are often commodities, meaning price is a primary selling point, leaving little room for profit and a great deal of competition.
This is where specialty products like decorative concrete come in handy. They add value in a number of ways that can help construction supply retailers and ready mix concrete producers better serve their market and find success.
By investing in mastering a specialized segment like decorative concrete, a supplier can add value to the transaction for the customer. The saying “knowledge is power” holds true – and it can often be the deciding factor when making the sale. Customers desire knowledgeable, supportive suppliers. If a customer knows you can provide informed recommendations, instruction, and troubleshooting, they are more inclined to purchase from you even if the competition is cheaper. This effect is greater with more specialized areas such as decorative concrete.
Being the “one stop shop” adds value to the customer in a big way. Time is money and travel takes time. By expanding in breadth to better meet customer needs, you can save them time, hassle, and potentially money. By adequately meeting multiple needs for the customer and reducing the amount of work needed to prepare for a project adds value, improves sales, builds loyalty, and establishes buying patterns. This means customers are more likely to go to you, even when you don’t have the lowest price, because you offer the value of comfort and convenience.
Specializing in a unique segment creates a different kind of value – one that is especially potent in larger markets. When the customer’s base needs are handily met by a number of other suppliers, an opportunity exists to expand in the depth of products and services offered. For example, a construction materials supplier may choose to focus on decorative concrete products. Combining the role of a one stop shop and product expert, this retailer does everything it can to dominate the decorative concrete segment. By offering every conceivable decorative product, no matter how niche, they become the go-to destination for anyone interested in decorative concrete products. This virtually guarantees a customer base while bringing value to these customers in the form of a steady source for even obscure materials.
Decorative concrete products act as a sales driver. Up to this point, the discussion on the value added equation has focused on ways carrying a certain segment, such as decorative concrete, adds value to the customer. The added value for the customer in turn improves sales for the distributor. Embracing decorative concrete can drive sales of other core products through bundling. No material should be sold on its own. For example, every stamp purchase or rental could be paired with other decorative products – color, release agents, sealer – as well as regular items – forms, admixtures, finishing tools, etc. This acts as a sales multiplier, increasing the potential revenue on every purchase with little additional effort.