There is a big difference between price and cost, and defined in economic terms, price is what someone is willing to pay for a product or service, and cost is the expense incurred in bringing that product or service to market. Pretty straightforward conversation, right?
Over the past couple of months Mirteq production has greatly increased as has our interaction with new prospects. Along with this growth has come many conversations about how the MIR line of products can help solve specific project needs. The obvious is that many companies are looking for better and often cheaper products to increase their bottom line. These conversations typically begin with phrases such as this – “that’s expensive”, “that’s 20% more than I am paying for my current product…” We all face comments like that in our business and must address them accordingly, and in our case, completely change the conversation.
Since 2011 customers have been using the MIR casting and molding products for a couple of reasons – they same them time and money by reducing labor and materials cost, increased time to market with finished goods, and a high quality of product reducing the number of returns or failures. That is the nature of our products and why they were developed, and none of the benefits have any thing to do with the price per pound but have everything to do with the cost of producing the product and delivering it to market. Again, a different conversation.
In these last few months Mirteq has engaged more prospects than every before and has more opportunity to help fabricators solve complex issues and do so more effectively since the day we opened our doors. We all must look at the price tag, but more importantly, we must consider the cost – labor, complete bill of materials, tact time, time to market, and opportunity cost to make the best decision.
Here are two recent encounters to serve as examples:
A recent prospect wanted to sample our new line of MIR-HOLD 650 Structural Adhesive. There were problems with the current bonding agent adhering to multiple substrates (steel, aluminum, and FRP) to a wood base causing in-field failures resulting in an increase in returns or costly field servicing for repair. After using the 650 he wanted to order and needed the PRICE – our product was $2.00 more per 490ml, so he balked – “that’s expensive!” Competitively speaking our product costs much less than most brands, but I heard his concern, so I changed the conversation and within a few minutes the prospect was able to calculate his current cost – returned products, field repair calls, total materials… The bottom line was that his COST was more than $138.00 per 490ml than he was currently paying. Yep, you read that correctly – $138.00 for a 490ml of adhesive, and a leading brand nonetheless.
The prospect did the math based on his data, but as he figured that his crews were already on the clock and repairs were “normal” his cost would be low, but in the end, he was paying a high price for a product that didn’t meet his needs. Now, he is using half as much product, which is a cost savings alone, and to date, no service calls for a bad bond.
A current customer received a request to prototype a new product for a client and wanted Mirteq to research the cost of using one of our molding products. Again, the same response – “that’s expense!” However, the customer missed the key piece of the conversation as the MIR product would be the single source material to produce the finished part – no added felt, glass or reinforcement, nor did he need to invest in expensive tooling, and it would take less than half the time in labor. This was a single pour, room temperature cured finished product in under an hour.
However, the hesitation was a result of him paying $4.00 a pound for resin, and we were not talking about resin. Our discussion was to build a high-quality detailed part as cost-effectively as possible – a completely different conversation.
The result – a product that was stronger than he imagined, in a faction of the time and at half the cost. New order number two!
Mirteq products cannot solve all challenges or address every application, but when evaluating new products or projects, changing the conversation from price to cost can lead to big differences, and bigger profits.