Director's Message: Delivering Value

During our PCI® Committee meetings, chairpersons are required to read the “Do’s and Don’ts,” where we are warned not to discuss prices for fear of violating anti-trust regulations because competitors sit next to one another looking for ways to further grow the powder coating industry.

You do not have the same constraints in your business. You, your staff and your colleagues are met with the same challenge nearly every day; that is, what price do you ask and ultimately receive for your products and services? Product pricing is, at best, a science for companies that look at all of their variable costs and, at worst, a kneejerk reaction to a competitor dropping their prices to gain short-term market advantage.

We are all reminded of the dangers of dropping prices to head off a competitor: for instance, “You will never be able to get back to your previous price level.” You know that your margins could suffer or that you will have to make personnel adjustments (a.k.a. layoffs), or that you will have to try to charge other customers a higher price, or you will have to make it up on “volume.”

Also, we know that some companies are structured to drop prices to gain market share, hoping to drive their competitors out of business. Of course, I could ask, “How does a gain in market share pay the bills?”

Perhaps instead of focusing on price we put our focus on value and how our organization delivers value. Delivering value does not mean necessarily what is valuable to us or our organization, but what is of value for our customers and prospects. I know your objection: you have asked your customers what is important to them and they always say “quality and service,” but when it gets right down to it, price is always the determining factor.

The concept of selling value is important to PCI®— so important, in fact, that at our Annual Meeting on May 19-21, we have enlisted a top consulting company to help our member attendees learn best practices on implementing the value proposition. However, we are not stopping there.

Beginning in late summer, The Powder Coating Institute will begin formal measurement of the effectiveness of delivering programs and services to members and the reasons that a member continues its membership. We believe that this is the first step in determining how well our organization is delivering value to members. The survey will be conducted on a regular basis to benchmark these practices and learn how we are improving.

For members, this will give proper feedback to PCI® association management about the programs that actually help fulfill our mission to promote and grow the powder coating industry; for non-members it will better define why they should join PCI®. It may also help to serve as a catalyst for new ideas.

We will be reporting the results of this first assessment in the fall. In the meantime, think about how you can deliver value to your customers.

Dave Lurie Executive Director, PCI®