Know Thy Enemy
“If you know your enemies and know yourself, you will not be imperiled in a hundred battles… if you do not know your enemies nor yourself, you will be imperiled in every single battle.”
Sun Tzu, “The Art of War”, 6th century B.C.
Selling is war. Every day you are doing battle for new business and your enemies are those competitors who are fighting for the same prospects you are trying to sell. It is important for every textile rental sales rep to thoroughly understand how each of your competitors does business. You need to know how they acquire prospects, differentiate themselves, the products and services they provide, their billing methods and contract verbiage. In this article we will focus on different invoicing and billing methodologies.
What is and what isn’t on the invoice
Textile rental companies have a wide variety of ways they display their invoice. Some companies show the billed quantities, delivered quantities, item descriptions, unit prices, extended item prices, delivery frequency, replacement percentages, replacement unit prices, minimum usage quantities, etc. While other companies only show billed quantities and extended item prices and don’t show delivered quantities. Others take this process even further and only show a total dollar amount on the invoice. It is critical that you understand how each of your competitors invoice their customers and be able to explain it because your prospects don’t understand how the billing works.
During my selling time on the street I made it a habit of collecting copies of every competitor’s invoice. I would obtain multiple copies of each competitor. I encourage you to do the same
With invoice in hand, you can analyze each competitor and review their billing methods. Look for what information is omitted from the invoice. Does it show the delivered quantity? Does it show the unit price? If those items are missing you may have an opportunity to educate future prospects and create pain. Generally speaking, the more information that is provided the more transparent the billing process. The more information that is missing, the easier it is for the competitor to increase their revenue without raising alarm to their customer.
For example, if the unit price is not shown on the invoice it allows the competitor to increase unit prices without the customer noticing it. If the delivered quantity is not on the invoice it allows the competitor to bill for more (minimum usage quantity), sometimes far more, than is being delivered. I’ve observed situations where the quantity billed was 5 to 10 times the delivered quantity. If you can determine this you can get a prospect’s attention quickly.
Some textile rental companies offer extremely low pricing on the rental price, but make it up on their replacements. An example of this is when they charge the percentage on the inventory rather than the delivered or billed quantity. This generally doubles the quantity of items being charged for automatic replacements than when the competitor is charging a percentage on the delivered or billed quantity.
Some competitors get their foot in the door with below market rental unit prices and make it up on the ancillary charges, such as, inventory maintenance, garment or replacement insurance, fuel charges, delivery charges, service charges, DEF charges (delivery, environmental, fuel) to name a few. It is not unusual to see ancillary charges range from 25% – 50% of the total invoice amount.
Look for charges on items such as bag stands, laundry bags, garment lockers, mop handles, mop frames, dispensers, hampers and other items. The charges may seem minimal but can add up to several dollars per invoice.
The idea behind understanding how your competitors do their billing is not to say that any of the methods mentioned in this article are unfair, but to be able to differentiate yourself and your company from your competitors. The ability to differentiate your service creates opportunities for you to get your prospects’ attention, create pain and write the business.
Make it a habit to daily to collect invoices and learn how those companies you’re competing with conduct business. Know thy enemy and you WILL win more sales!
RentalSalesRep.com is a Remote Sales Management organization that provides digital sales training and support to the Textile Rental Industry.