QPQ For The Good
Politics is giving QPQ a bad reputation. But, “this for that” can also be a selling tool for turning win-lose customer requests into win-win outcomes.
Distributor reps can use QPQ for transactional fairness.
“Mr. Customer: you want a lower price? Understandable! How can we turn a – you win, I lose event – into a win-win transaction? Perhaps a bigger order or the promise of greater future purchases?”
Or, in some cases, the rep should challenge the buyer to move towards relationship greatness.
“You want a lower price? Why stop there? Why don’t we work on reducing all of your procurement costs and boosting your operational uptime productivity? Let’s explore a solution similar to what McDonald’s have evolved with their distributors: sole-supply, integrated, automated, transparent, ever-evolving, evergreen and all-winning!”
Like McDonald’s (McD’s)?
McD’s has grown with the same distributor suppliers for years. All relationships started with handshakes; no formal contracts. (For more on the how-to’s of these win-win partnerships, read an excellent summary article). Some key facets:
- Ray Kroc’s supplier vision requires distributors to sell on an open book basis.
- Then, the costs and the benefits of continuous innovations can be shared. Distributors are guaranteed a good profit/ROI which is needed for reinvesting in rapidly growing: sales, assets and innovations.
- To keep the total costs for both McD’s and distributors declining, distributors must have (like 3PL firms) Cost-To-Serve models at the line-item/SKU/pick level.
- The McD’s system also has no “special pricing agreements’ and rebate-activity costs between producers and distributors. Producer prices pass transparently through the distributors.
Plotting Customer Buying Sophistication
A small percent of customers have both – the win-win philosophical capabilities and supply-chain math imagination – of McD’s. Find your candidates by plotting big (potential) customers on an X, Y graph with (10,10) being McDonald’s. The X graph measures the degree that a customer is win-win committed and capable. “10s” will have McD’s: beliefs, metrics, practices and partnering track record.
The Y graph measures supply-chain, total-cost sophistication. Walmart, by example, invented cross-docking (a 10 on the Y graph). But, their X-axis scores vary by supplier.
Conclusion
Use QPQ to turn “price” requests into win-win solutions. Endeavor to move best customers up the 45-degree slope from 0,0 to 10,10. Most competitors can’t/won’t think or act like this. And, Amazon Business can’t sell such customized solutions. Be valuably different.