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Maximizing Your SCS Margins
New Tools for Selling SCS Value
A Matter of Scale - SCS vs. P&O
Floorspace Comparison |
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With the number of service centers selling SCS steadily growing, the TMW team is working hard to keep up with many requests: balancing schedules, sending samples, getting out the latest test reports, arranging visits and referrals. The list goes on.
Still, we make time to get together and share ideas on how we can better support our vital service center partners. Through these discussions we’ve found that these partners are having |
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Our interviews with the service centers prompted requests for additional sales tools to use with their customers. Yes, they like the information on the SCS web site, but there’s not always Internet access where important selling is done - like on the plant floor.
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A complete SCS Sales Kit is in the works, but we took the hint to accelerate release of a sales flyer that specifically responds to this need. It’s now available. Click here to order your copies >  |
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varying levels of success in growing their SCS sales. More to the point, they tend to fall into either of two groups:
1. Those selling SCS at a premium to P&O and growing their sales;
2. Those selling SCS at prices equal to P&O (still better margins) but
with rather slow growth in sales.
These partners are selling the same product with the same benefits to comparable end-user customers. So why the stark difference in success?
Solving Problems or Peddling A Commodity?
We spoke to companies in each group to learn the differences in approach that could account for the difference in success. We heard numerous theories, anecdotes, and even a few complaints, but we can summarize the most important lesson we learned as this:
The successful companies were using a classic consultative selling approach to show how SCS could solve problems for their customer. The less successful companies tended to treat SCS as another item on their price sheet, taking less initiative to explain how it might solve long-standing manufacturing problems.
A telling example of this difference was whether someone from the service center attended his customer’s initial trials of SCS. When they did attend and pointed out the various places where SCS either did or could solve a problem, they often were rewarded with an order for more SCS.
They’d point out the cleanliness of SCS. If the customer was welding, they’d point out the reduction in fumes with SCS. If the customer lasered, they’d have them increase the laser speed. They’d look for any opportunity to show how SCS might solve some problem, even if it was a minor one.
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By contrast, the less successful group tended to ship the trial order of SCS to the customer and leave it to the customer to discover SCS benefits largely on their own. While this worked well enough in some situations, it left a lot to chance in others. For example, when you ask most fabricators if they have problems with the oil on their P&O material, they’re likely to say “No, not really.” But when you probe deeper, pointing out how the oil gums up fabricating equipment, makes paint prep more time consuming, creates welding problems, and so on, there’s instant recognition that the oil on P&O sheets really does cause a lot of headaches. Fabricators have lived with these headaches for so long, they see them as part of the territory. When you show how the oil problems can be eliminated by using SCS, they recognize that SCS offers tangible value beyond flatness, cleanliness and price. That value recognition is the basis for winning SCS orders at a premium to P&O and even to temper pass.
Put TMW to Work for You
SCS is still new to most of our service center partners and they’ve not had the chance to develop the expertise with SCS that comes with time. But we ask “Why wait? Why not put TMW’s experience to work for you right now?”
How? By having us in to train your sales team, visit your customer trials with you, and assist you in developing SCS sales tools focused specifically on your target audience. Many of our smaller service center partners have already reached out for this kind of assistance. With lean sales staffs and light marketing budgets, they recognized the need to tap into the TMW clearinghouse of SCS information early on. Working together, we’ve succeeded in growing the SCS portion of their business at some pretty attractive price premiums.
This kind of assistance is available regardless of the size of your operation. Don’t hesitate to call us and discuss how we can apply our “lessons learned” to help you position SCS as a premium, problem-solving steel amongst even your most skeptical customers.
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The September 2004 SCS UPDATE explored
variable costs of a continuous P&O operation
and the SCS Coil Line for processing coils.
They both remove scale from hot rolled
black steel, leaving it ready for further
processing. But the variable operating
cost of the P&O process is roughly
four times that of the SCS process.
The other important difference:
P&O applies an undesirable oil
film for rust protection, while
SCS' clean, dry surface resists
rust with no oil or coating at all.
Another notable difference is
extremely important for anyone
considering building either a new
pickling line or a new SCS Coil Line:
a typical continuous pickling line requires
28 times as much floor space as an SCS Coil Line.
Floorspace for the pickling line might measure
500 x 100 square feet, and this doesn't include
space for large tanks which hold spent pickle
liquor. By contrast, the SCS Coil Line
occupies 90 x 20 square feet. This doesn't
include space for its water filtration system,
but that can be located in “dead space”
between crane rails. Also, a second tandem
brushing unit can be added to the SCS Coil
Line, extending its length by only 15 feet.
That’s valuable space, since a second
brushing unit boosts line output from
18,000 to 32,000 tons per month!
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