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CURRENT NEWSLETTER
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Lindemann Chimney Supply sells wholesale only to the chimney and hearth industry.
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 August 2005
Apples to Apples
Have you ever heard the expression: “Make sure you are comparing apples to apples”? We'd like to take the opportunity this month to share a bit of interesting information we uncovered this month.
A very good customer of ours gave us a call and explained thatone of our competitors gave him a call after he realized his sales were down from the previous year. Our competitor offered him a 10% discount off catalog prices on all his purchases, if he could commit to $75,000 in business over the next year. Thankfully the customer called us up and explained the situation to us. He really had no desire to go back to buying from our competitor, as he liked dealing with us better, but a $7,500 savings was just too much to overlook.
What were we to do? We charge a fair price, and our margins need to go a long way. We certainly are not willing to skimp on customer service and definitely do not want lose a great customer.
We know that our prices are always competitive, and that our honest straightforward, no fine print, way of doing business was better for our customers in the long run. But we needed proof, something tangible. Here's what we did.
We took the customers year to date orders and compared them to what our competition would have charged. We did not include “Shipping and Handling” in the equation as the customer said he would almost always qualify for free freight. This was to our disadvantage as we do not add exorbitant handling fees as the competitor in question has been known to do. Fair shipping prices are one area we know we can save our customers a lot of money. With this out of the picture we still put together a comparison.
We created a lengthy computation of what our customer would have paid if he was with our competitor all year. After an “apple to apples comparison” we found our competition was 13.8% higher on the same purchases. A lot of little factors added up fast. No wonder they can give him 10% back as soon as they realize they have lost him as a customer. Our customer remains a customer, and he is now very happy to see that he really is getting the best service at the best price. We are very fortunate that he gave us the opportunity to do so, often this does not happen.
What we failed to do was to educate our customers on why Lindemann Chimney Supply is the best value. One factor is we change prices one time a year. This means when our vendors increase prices we often absorb their increase to honor our catalog prices. This helps our customers in bidding jobs as they do not have to worry about the price changing four times a year or worse yet, if they are “subject to change without notice”.
Another factor is Lindemann Chimney Supply does not practice pricing the items people tend to compare more competitively than the ones they don't. For example, the average buyer would compare prices on a 13x13 cap to see which distributor was higher, but they rarely would compare the price of a 17x17 cap or a leg kit that they occasionally use. So you end up buying a handful of 13x13 caps thinking your saving money, but when you add one 17x17 cap and a leg kit you end up losing your savings and do not even realize it!
Thank you! We truly appreciate your continued support!
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BACK ISSUES OF OUR NEWSLETTERS
July 2005
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