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BY Kassandra Kania
SponsorsProduct bundling, also called system selling, is the practice of grouping together similar products and selling them at a discounted rate. While this isn’t a new concept for distributors, successful product bundling programs go well beyond this standard definition. Beyond lumping together a package of standard restroom products and selling them to the customer, distributors should serve as consultants to help customers identify their restroom needs and customize solutions that address their specific problems.
“We don’t just shove products in front of the customer and say, ‘I can save you 5 percent,’” says Lance LaFave, owner of Newton Distributing in Newton, Mass. “We’re a solution provider. We’re trying to solve problems for [facility managers] because they have less time and less money to do it.”
At Dade Paper in Miami, the bundling process begins with a restroom audit to help customers clarify what type of restroom bundle they need.
“We do a walkthrough, and we fill out a form with product recommendations specifically for their situation,” says Laura Craven, director of communications and marketing. “We look at what’s going on at the customer’s location, how the restroom is used and the volume of traffic. Then we try to identify the right bundle that’s going to solve their problems.”
In addition to lowering prices and solving specific restroom challenges, product bundling can improve the appearance of customers’ restrooms and give them a uniform look.
“We try to figure out what types of products are best because a lot of businesses are judged on the quality of their restrooms,” says Craven. “How many times does someone go to a restaurant, use the restroom, and then come out and say, ‘I’m not eating here again?’ And when you’re talking about dispensers, it’s important that they match because it improves the esthetics of the facility.”
LaFave agrees. Before bundling, his customer, Starbucks, ordered restroom products from a variety of local vendors.
“At the end of the day they were left with a hodge-podge of different fixtures all over their portfolio,” says LaFave. “By bundling and working with one distributor, customers are able to achieve consistency.”
But customers aren’t the only ones that walk away happy. Successful product bundling programs can also help distributors save a bundle.
“It’s all about logistics,” says Craven. “By increasing the drop size at that customer location, it’s more cost-effective on our side — especially when you consider labor and fuel costs.”
Best of all, bigger orders translate into larger profits.
“Bundling is something that’s been in our vocabulary as salespeople for years, but few people take the time to do it,” says Randy Niblett, vice president of sales and operations for ProStar in Bryan, Texas. “It’s a great opportunity to penetrate an account and add profitability to each invoice. That’s the end run goal; to make the delivery more profitable.”
By developing a restroom system, distributors are creating a solution to their customers’ problems. This kind of service is what creates lasting, profitable vendor relationships.
“With our program, we hope that by providing these additional consultative services, and helping the customer pick the best products for their situation, that it will help protect our business with them,” says Craven. “Someone might come in and offer an item for a penny less, but because they feel they’ve actually received value from our services, they would be less likely to entertain a competitor that just wants to move boxes.”
Kassandra Kania is a freelance writer based in Charlotte, N.C. She is a frequent contributor to Sanitary Maintenance.
POSTED ON: 6/19/2012