Everything You Need For B2B Revenue Growth

December

10

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Have you ever thought about what you need to ensure the growth of your business? If so, you don’t want to miss this episode. We've got Jose Palomino from Value Prop Interactive with us. He is going to share everything you need for B2B revenue growth.

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Everything You Need For B2B Revenue Growth



Tim Fitzpatrick
Have you ever thought about what you need to ensure the growth of your business? If you have, you do not want to miss this conversation. I have a special guest with me today, and we are going to dig into everything you need for b2b revenue growth. Hi. I'm Tim Fitzpatrick with Rialto Marketing, where we believe marketing shouldn't be difficult. All you need is the right plan. I want to thank you so much for taking the time to tune in. I am super excited to have Jose Palomino with me today from Value Prop Interactive. Jose, thanks for joining me.

Jose Palomino
My pleasure. Glad to be here.

Tim Fitzpatrick
I'm looking forward to digging into this because as we were talking before we went live, you and I share a lot of the same philosophies and thoughts around marketing and revenue growth, so I cannot wait to dig into this. Before we do, want to ask you some rapid-fire questions to help us get to know you. You ready to jump in with both feet?

Jose Palomino
Let's go. I'm strapped in. Getting ready.

Tim Fitzpatrick
All right. So when you're not working, how do you like to spend your time?

Jose Palomino
At this point, it's very much family, kids. I have a granddaughter now, and any time we can, she's in Virginia. I'm outside Philly, so it's anytime we can. We try to see her and just spending time with our kids.

Tim Fitzpatrick
Cool. So you get the best of both worlds, right? You get to spoil them, and then you can leave.

Jose Palomino
And then we can leave. That's exactly the plan.

Tim Fitzpatrick
What's your hidden talent?

Jose Palomino
Wow. That's an interesting question. I thought about it when you threw it out before I said, "Hey, how would I ask that?" I think probably something people don't know or wouldn't know is that I am part-time, occasionally, a preacher.

Tim Fitzpatrick
I never would have guessed.

Jose Palomino
I guess it comes out of that same spirit of teaching and encouraging people all at the same time. So that's something I really enjoy doing.

Tim Fitzpatrick
What's the best piece of advice you've ever been given?

Jose Palomino
Probably, I think something along the lines of really finding, and it's been heard before, and everyone's maybe gotten it from a dad or something, but find the thing you can be passionate about and you won't work another day in your life. That's not quite true. You work pretty hard, but still. But really, you might as well. It's like they say, "Life's too long, life's too short." It's both. So you might as well do something if you can. If you have the option to find something you really are passionate about, I think that was really great advice. And one I tried to live to.

Tim Fitzpatrick
The first business I was in. I was in that situation, and you're totally right. It's not that you don't work, but you enjoy the work so much, it doesn't feel like work.

Jose Palomino
Yeah, absolutely.

Tim Fitzpatrick
And when you can find that spot, it is an amazing place to be. What's the one thing about you that surprises people?

Jose Palomino
It gets a little long. It's a backstory. But basically I started my business career and I never went to College. So I went on. And then somewhere probably around the time I started this or fuse before I started this business, I had a conversation with a friend and he said, "Well, why don't you go back to school?" I said, "Well, look at this stage in my career and I'm helping people. So I'm not going to spend 10, 15 years night school." He says, "No, go get your MBA." And I said, "Well, what part of I've never gone to College didn't you understand?" I told my friend, and he said something to me, it was really it's a great other piece of advice, he says, "Have you asked?" I said, and I looked down at my shoes and I said, "Well, not exactly." And so I started making calls and I called Penn Wharton. I called Kellogg. I called Villanova, which is near me. And I called Drexel near me as well. I said, "Would you consider a pretty nonstandard applicant for your executive MBA program?" All four said, "Let's talk about it." Villanova said, "Come on down." And sure enough, I went through Villanova's executive MBA program, received my MBA, actually teach in the MBA program now as an adjunct for the last ten years. So I am a high school graduate with an advanced degree. And most people wouldn't know that.

Tim Fitzpatrick
That's an amazing story. And if you never would have asked, it never would have happened.

Jose Palomino
Never would have happened. I would have just thought about what if that would have been nice. Again, I've been in my career at that point, 20 years and working Fortune 200 companies, all that stuff I hadn't learned. Doing the work.

Tim Fitzpatrick
On the job.

Jose Palomino
But that one other piece, the academic piece was always like a little flag in my head. I wonder what and if and what would be nice and really a door opened for me to go through. And again, it was a very significant moment in my life.

Tim Fitzpatrick
When you made those outreaches to those colleges.,Who did you outreach to?

Jose Palomino
I looked up the highest level person in admissions for their graduate programs, and I framed it very I just said, upfront. I said, "Would you consider a nonstandard applicant for your program?" And they said, "Well, tell us about yourself." And at that point when I explained my resume, right, 20 years experience and so on, they said, "Well, okay, that is nonstandard. But we could consider it. And let's talk about it." Villanova was very excited because at that point in the world of executive MBAs, almost everybody was corporate-sponsored, and I was a true entrepreneur. And they loved that idea of bringing that into the program, somebody who wasn't corporate-sponsored. So it was on my dime. And it was quite a few times to get there but they thought that would add to the mix. And in fact, it was really just a great experience. And one I would strongly recommend to somebody at some point in life that's a really neat thing to do.

Tim Fitzpatrick
What's the difference between an MBA program and an executive? Is it how the curriculums delivered or sponsored?

Jose Palomino
It's probably even more rigorous. The EMBA was probably 24 months. The difference is you strap in, in most programs, most executive MBA programs are designed to you strap in, you get on the bus and you can't get off the bus. Villanova also, and other universities offer more flexible programs where you could do, like, of course, a semester. And it might take you five years to finish it. This, you know, when you're going to be on the bus and when you're getting off the bus and you can't do anything about it. The second thing that you find is that it is generally, it skews a little bit older. Who's in the class? These are people who already have accomplished things in their business life. So I had people like the Office of the President advisor. He wasn't the President. He worked with the President on staff, for example.

Tim Fitzpatrick
Got it.

Jose Palomino
And on and on, pretty senior people at SAP and other large corporations. So when we talked about examples and really stressing that stuff out, we were working at the highest possible level because these are people really doing the real work for the last 10, 15 years. That is different. So when I've taught traditional MBA to skew a little younger, more like five years into their career, and it's different. I'm not under solid professionals, but it's just different when you're talking to a room full of 35 to 45-year-olds versus 25 to 30-year-olds. It's just different life experience.

Tim Fitzpatrick
That's an amazing story. We kind of went down a rabbit hole there, but that's okay. So what does success mean to you?

Jose Palomino
Oh, boy. At this point in my life, it really comes down to having healthy family and other relationships. I think it's about relationships that work. Your friends, people you care for, that you can connect genuinely and make a difference in each other's lives. I think that's really what I think success is. Certainly, I have business objectives. I don't want to be all touchy, feely. I have monetary objectives and so on. And those things matter. And those things get me up in the morning because I'm still involved in providing for my family. And my youngest is now going off to College next year. So those are those things that are considerations. But really, all of that stuff is very transitory. So you start realizing that success is really those things that are measured over, frankly, over eternity, as opposed to over time.

Tim Fitzpatrick
Yeah. Where's your happy place?

Jose Palomino
There's probably a few. But I think there are moments where you just have, like, our neighborhood is a nice neighborhood to walk through. Right? That just has a lot of trees. It's a mature neighborhood, so it has a lot of older, taller trees, and there's certain perfect moments where you could just walk into 1-mile loop and everything just feels right. Like it's just a good moment. And ironically, the other place that happens because I was born and raised, and I like to say that I'm a New Yorker living outside of Philly, right. So when I get into downtown New York, which I haven't in a little while because of COVID and so on, but there's a moment around April, where if you step out of the subway and it's like 65, 70 degrees outside and the sun is shining and the street cleaners came by and you see all the people hustling and bustling to get to their offices, there's an energy to that that's still very exciting to me.

Tim Fitzpatrick
What qualities do you value in the people you spend time with?

Jose Palomino
Authenticity. And I think also a spirit of I don't do very well with arrogance. And I don't do very well with somebody who's overly confrontational. Again, if you've been in business and you negotiate and you do things, you have to deal with confrontation at some level. But I don't revel in it. I've known people who are like, they're waiting for the good fight, and that's what you want. No different strokes for different folks. I guess that's not me. I like people who I prefer the peacemaker than the war bringer, right. That's just my preference. And especially what I like to call it humble confidence, right. I think it's great to have be around confident people who know they know how to do whatever they do. When you see a doctor, you want to see doctor, that doesn't go, "Well, I'm not sure." You want somebody who's sure. Right. But the humility part is that means that somebody who's willing to learn. And I can engage anybody who I can help and is open to help. And I don't say I have all the answers I say, "Hey, have you considered have you thought about this." And somebody who has a humble confidence can say, "Yeah, that can make sense." And that is a very good combination for me to work with people. That's true in personal relationships. Whether I'm doing lay counseling at Church, with somebody who's dealing with somebody, they tell me like, "I got it figure it out. And there's nothing you can say to help me." Well, then I guess that's true then, because they help you. That's the way that is.

Tim Fitzpatrick
So tell us more about what you're doing at Value Prop. What services are you offering? What types of people are you helping? How do you help?

Jose Palomino
Yeah. So Value Prop at heart, because it reflects me. I have a few people on the team, and in our world is always the ability to bring in resources and so on. But I always tell people, prospective clients if you like this interaction we've had, you're going to get a lot of it. It's going to be a lot of me at this point. Right. So I am a consultant coach at heart, and I focus on growth on those strategy or strategic elements of what helps a company grow primarily in the B2B space. So that's been almost exclusive of my interest and mostly in what would be considered like industrial categories. They make a machine or they provide physical services. Certainly, I've worked with my fair share of software. That was where I started was in the It space was my whole earlier part of my career. And I enjoy that world a lot, too. But primarily, it's the owner leader who still has hands on the wheel. Right. So it's not a PE firm. It's the owner leader running the company day to day. The B2B company wants to grow it maybe not quite sure how and is willing to engage in a process whereby I can come alongside and say, "Okay, let's take a look at what your challenges are. Let's break it down. Let's build it back up. And if they really think there's a possibility of still growing, then I can work very well with that person. If they think they've arrived, then that's a harder thing to again, there's no need for change at that point. They're fine, especially the owner who maybe had better days before. But what often happens in this category, and we've talked about this before a company, let's say in a few million to maybe 15 20 million, they often just don't do marketing sales on purpose. They do it as a necessary process, just like somebody cleans the factory floor. It's like that kind of function, but it's not a strategic function. They don't think of it that way. They'd like to, but they don't know how to.

Tim Fitzpatrick
Yeah. So when we look at growth, I think a lot of people default to, "Well, I need to market. I need to have salespeople." Let's jump into the sales side of it first. And people think, "Well, I need to grow sales. So I just need to hire salespeople." But that's not always the case. So why does hiring salespeople not always translate to more sales?

Jose Palomino
Yeah. Because the salespeople, first of all, it's actually a very deep question. Let me take it in a few dimensions. One, your problem may not be lack of salespeople, and they're very expensive to get. Anybody any good, you're going to definitely be making six-figure commitments to add to one sales headcount. Two, it's twice that. So it's a lot of money if you're in that 10 15 million dollar range company, and it's like a ton of money. Plus, it's the hidden cost of managing that person and getting in training that person and onboard all that stuff can be a ton of expense to somebody who you may not actually have a problem with the salespeople you already have. You may have had what we call a dull value proposition, which, in other words, nothing stands out about your business. You sound like commodity. You are commodity. Well, I could throw 30 sales people on that, and it's just going to make you always bidding one of five. And so you win 20%. If you're hitting an average, you're winning 20% of your deals. Well, that's not that hard. The other thing is a lot of times in this category, they're not that great at selecting salespeople. And here's what I mean. Time and again, I run into this where especially in a very technical business, they make machine, they do manufacturing or they make software, whatever. They overvalue, and I know it's going to sound counterintuitive, they overvalue the industry and technical knowledge. So what they end up trying to put is somebody who's basically an engineer in a sales position. Now, an engineer who can sell is a great thing. But that burden is, and they also will say it takes, like, three years to learn this business. I'm saying, man, if you have a professional salesperson, give that person 90 days and they will stop producing for you, they just need to know enough to know. Who do I talk to? What do I talk to them about? What are the common objections that come up, which, by the way, are known at this point. If you've been in business ten years, you've heard every objection possible. Break it down. And then sales acumen is its own thing. And that's the other thing. A lot of owners who founded a business on the strength of they had domain expertise over a technical field. They don't often value sales as its own science and art. So there's a lot of things you have to figure out before you say, let's just add head count, because you may add one. You may add more of the same wrong headcount. That's one, right? Two. You think by making that investment, you solve the problem when, in fact, maybe the investment needed to go into marketing strategy, maybe into thinking your pricing or packaging. There's so many other opportunities that you could actually get more bang for the buck. Just adding salespeople it's an easy bandaid. But if the problem is internal, the problem is like bacterial infection. Bandaid doesn't do anything for you. So you have to get to the root cause of what it is that's keeping you from growing.

Tim Fitzpatrick
Yeah. So we don't want to treat the symptom. We need to treat the cause itself.

Jose Palomino
Absolutely.

Tim Fitzpatrick
So would you say, in this case that before you jump into that or go down that path, you need to make sure that you have enough information so that, you know, you're making the right decision?

Jose Palomino
Absolutely. It's like anything else. For example, that same company wouldn't just run out willynilly and say, "Let's buy a quarter million dollar machine to a production line." Unless they probably would have, like whole charts figuring out what level of production that would impact what parts it would allow them to make. They would really give it a lot of thought right for spending money on that $250,000 machine. But they would be less inclined to do that same kind of analysis before hiring a salesperson. Again, I'm not against hiring salespeople. I'm saying salespeople are great if you can find good ones. By the way, they're not that easy to find. And in the smaller mid-market, they're usually especially difficult to find because somebody is at the height of their career. Let's say a 35-year-old champion salesperson has an opportunity to work with Oracle and make half a million dollars a year. They're not really that happy saying, "Well, I'll take $80,000 for this industrial sales position." They often are like territory managers and stuff like that. So you have to really think, who can I get and what else do I need to fix to make them more successful? What tools do I need to give them? I can't send them to a gunfight with a box cutter. Yeah, it's a terrible metaphor, but you get the point you say, "How am I equipping these people?" Those questions rarely even get asked.

Tim Fitzpatrick
Yeah, your point about them defaulting to hiring salespeople for their knowledge of the industry, I think is a really good point. And frankly, I think you probably could make the argument that hiring somebody that's a great salesperson, but has no experience in the industry is actually a better person to hire because I think they are more inclined to speak to prospects and clients in a way that it makes sense to them. And I think they're more inclined to focus on those things that are really going to make the difference for the prospect.

Jose Palomino
I couldn't agree with you more, Tim. Here's the other thing you find somebody says they have 20 years experience in our business, you can end up with what it's not a very charitable statement, but it's true, a broke down journeyman. Somebody who's never been that great never really made a lot of money in any sales position. But somehow it just goes from sales job to sales job. And they have this deep industry knowledge. But where's the leverage in that? What do they have they really done? And what ends up happening is they walk into sales situations, and they tend to be the ones that shortcut the process, even though you're trying to put together a sales process. So I don't need to do that. I already know what they need. And so they do poor selling. And selling has changed radically in the last 20 years. In the last ten years. The changes keep accelerating where buyers really own the process. So unless you have somebody who understands it's about understanding navigating the buying process rather than trying to force a prospect through my selling process, those days are gone. Buyers now say, "No. We are actually manning the till on the sale boat now." So you have to understand, how can I use that to my advantage? Knowing that then the first set of questions I want to have is actually, I prefer somebody who's a little bit ignorant because let's say you and my prospect, Tim, I say, "Tell me a little bit more about your business, what you're doing." And I understand this whole argument about, well, you should know more about the industry, and I am committed. And I believe salespeople should commit to learn their industry, of course. But it's about making assumptions and presumptions about things and not going through the process. It's a good sales process. Can take a decently, talented salesperson to make them very successful. The wrong process can take even a talented salesperson and actually take them down.

Tim Fitzpatrick
Now, I know that when you work with companies, there are four main areas of business that you help them with and focus on. Correct?

Jose Palomino
Yeah. It's a process we call a competitive edge. Right. So the whole idea is and it comes from if you look at athletics, especially like timed sports, like running, right?

Tim Fitzpatrick
Yeah.

Jose Palomino
Usain Bolt, who is the best name an athlete was ever born with, that's actually his real name. It's a tremendous fastest human on the world. Right. But Usain Bolt wins on average. He wins by sub seconds. Right. So think about that for a moment that he only wins because everyone else running is a world class runner, too. At the Olympic level, they're all like, they're fastest humans. Any one of them would have been the fastest human ever, like even just five years ago. Right. That's how the sport evolves. But he wins consistently. But he wins consistently. Occasionally, he'll blow out the field. But more often than not, he'll win by marginal fractions. But here's what happens. And it's a real interesting thing. And I hope anyone watching this or listening to this really grab hold of this mental picture. When he wins, he gets the whole gold medal. They don't shave off a fraction of the gold medal because he only won by a fraction of a second.

Tim Fitzpatrick
Right.

Jose Palomino
Even if the photo finish and it was a nose ahead, he gets the whole gold medal. And in business, it's the same thing. The difference is in business, you come in second, you don't get the silver, you get nothing. You might get a phone call from somebody who says, "Man, you were close. We really liked your proposal. Except that blah, blah, blah." Fill in the excuse. And you get exactly $0 back from that answer. So we help companies look at how to create a competitive edge because we say to them, "You don't have to become Apple." See so much of what's written, like great book. I love it. It's been around for 15 years. Is Blue Ocean Strategy. And I can't tell you how many small businesses have read it and try to think about how they're going to revolutionize their industry. And I'm saying, "Well, maybe you might, but typically, your $10 million contract manufacturer is not going to revolutionize contract manufacturing." They don't have the RND dollars they don't have that. But it doesn't mean they can't grow 50% and with better margins by doing something smartly. So we believe in incremental improvements when applied in four areas, actually create outsized results. So the four areas are your value proposition. Really sharply concentrating on your target market, knowing who they are and especially knowing what problem you solve from their point of view, we often just think about, no, this is what I'm doing. This is what I offer. What problems do they solve? Second thing is your value delivery aligned with your value proposition? In other words, you're promising these things to the market. Have you told production? Have you told fulfillment? Are they onboard with that? Right. If you're saying in your sales and marketing materials, you're talking about being a rapid turnaround and your operations is a mess and they're like running 30-day lags, that blows up your value proposition. So you have to stay aligned. Then you have to mark it on purpose. What we talked about. Basically around, especially in B2B around Legion, like, really thinking through, what are you doing to get that next appointment? And I've had owners tell me, "Well, we get most of our business from referrals." And what they mean is that like, John Deere Caterpillar is 70% of their revenue. Let's take a look at the margins on that. And it turns out I'm not picking on those companies. They're great companies. But any big companies that buys from a small company, inevitably, what they do is every year they turn the dial and say, "We need 5% more. We need another 5%." And so on and so forth. At some point, that small company finally says, "We won't make any money." And instead of the big companies saying, "Wow, that's unfortunate. We don't want to put you in a spot." What they say instead is, "Well, it's been really nice working with you. We will now move on to the next supplier who can hit that target." Because they got their targets to hit. So you need to think about marketing on purpose, to make the phone ring, so to speak, to have more opportunities, more at that. And lastly, as we talked about before, the sales process has to really work, it has to be intentional. So I've trained teams where, like, there's 50 sales reps. And I said, "How many people run into objections?" Everybody raises their hand. I said, "All right, so let's wipe out some of the objections you commonly hear." And I hear the objection. I hear the objection. Everybody's raising their hands. Eventually I said, "No, Larry already said that one." "Mary said that one." And so it turns out there's, like, five common objections they're all running up against. But since they never thought about it purposefully together, they all dealt with it like if you said 50 people, it's 250 objections. It's an impossible. No, it's the same five objections. More or less. Maybe say a little differently. So now you start thinking, "Okay, well, which of these objections do we have an answer for?" What is our best answer? We could actually put our heads together over pizza and come up with some good flashcardable answers to, by the way, you don't need a Department of Competitive intelligence, i mean, that's great. If you're a big company, you have that. I've worked with those divisions, like, 50 person, just on competitive intelligence. But the reality is it's common sense. But only once you make it part of your process. And then really thinking through what is the process? What do we want our sellers doing when they engage with a prospect? "Well, Billy's really experienced. He has his own style. He does his own thing." I said, "All right, great. But let's talk to Billy. Billy, tell us what you do, because apparently everyone thinks you do it really well. And maybe there's some best practices in what you're doing that Sharon over here would benefit from because she's struggling a little bit." This isn't that hard when you start thinking about it that way. These are human things that can be thought through. So, again, your value proposition, which is basically answering the question, why should anyone buy X from you at Y price? Valid delivery. Make sure you can actually fulfill the promises of your value proposition. Purposeful marketing, always looking towards, not vanity metrics. We got this many clicks. We have this many visitors. Why are you spending the money? Do you want the phone to ring? Do you want inbound to happen? How are you doing it? I recently spoke in an event. It's actually going to be disseminated to, like, 2000 manufacturers around trade shows. Right. And so I can't tell you how many clients. And I'm sure you've worked with them that say, "Okay, well, we're going to do trade shows." And I asked why? And they said, "What do you mean, why?" "Just tell me, what do you get out of this trade show last year? How much do you spend on it?" "Well, we bought the booth. We had to spend the space. We have to travel to Chicago." Blah, blah, blah. "Okay. Can you point to any business that came from it?" And you know the answer, maybe seven out of ten times. The answer is nothing I can actually point to. I said, "Well, I'm not against trade shows. I think they are a great opportunity to meet up with the people you have." But I said, well, what, and I've done this with some clients I said, "You spent 50 grand on that last year." And that was a ten by ten next to the men's room, right? It's not even a great facility. "Well, why did you spend half that amount?" Didn't take everybody out, took three people out. And in advance of the show, reach out to everybody you think will be there. And since you're going to be in Vegas, buy tickets to Cirque du Soleil and invite somebody to go to a show, take somebody to Morton's and do things that people will want to do and get real face time with your target audience. If there's three of you flying out there, if it's a three day event, you'll have, like, maybe each of you could have five good meetings. Thst's 15 meetings in a space of three days that might take you all year to get. That's useful. And you spent half the amount of money. But again, you have to think about, why are we doing what we're doing? Let's not just repeat it because it's all we know. And again, this is the stuff you do, Tim, is help people plan and think bigger ideas, broader ideas, challenge every assumption. So anyone listening to this? I'd say, "Whatever you think you're supposed to be doing, ask the question why and what's come of it?"

Tim Fitzpatrick
Yeah. One of the mastermind groups I was in, we always talked about that. The most important business question you can ask is why. It is such a great question. Frankly, when we were talking about hiring salespeople, why? Right. That's helping you dig below the surface to really figure out whether the assumptions you have are actually correct. And I love the trade show example, when I was in the distribution business, there were multiple trade shows and manufacturers, so many people, they just did it because that's the way that they always had done it. And it was like, we can't not go to the show. It's like the main industry trade show. Well, what you just walk people through is not saying we're not going to not go. We're just rethinking our approach to see whether we can get more value from it.

Jose Palomino
Absolutely. And again, not to beat down on trade shows, because in some industries, it can still be very relevant. But it came from a time pre Internet, literally. Where that's how people got information. That's how people, that's how buyers learn what's new, what's happening. That's not true anymore. That's true for a while. Now, it's a great place to meet the people you might want to meet cost-effectively because you don't have to travel all over the country. You're all going to Vegas, you're all going to Chicago McCormick Center. And if you know they're going to be there, then leverage your budget to make yourself a compelling get. And again, front row tickets to Celine Dion. Whatever you think somebody is interested in, it might set you back $500. But you know what? It's a lot less than 50 grand for that outside the men's room.

Tim Fitzpatrick
Yes. So a lot of what we've been touching on is really leading to your value prop, what's your competitive advantage? And I think I don't care what industry you're in. We are all battling noise in some way, shape or form. There is so much information out there bombarding people that we want to do business with. What kind of tips do you have to help people really kind of hone in on, how do I create this competitive advantage? Because without a competitive advantage, you're not going anywhere, right?

Jose Palomino
Well, absolutely. Because then you're conceding that you're just a commodity and erase to the bottom. And I always tell owners that I said you cannot be the low-cost provider unless you are the low-cost buyer. Right? Because otherwise somebody else's cost structure will be less than yours. And they can always just come under you and blow you out of the water. So don't even try going to the low-cost provider position, because again, unless you are literally the biggest buyer of steel or whatever, and you're not. If you're an owner-led business by and large, right, you're going to be way below that level. You don't have that kind of leverage. So I always say the competitive advantage is going to be probably in four areas. And to think about it this way. One is, how do I help my customers either save money or make money? If you're on the revenue side, if your solution, what you sell is to help people grow in revenue. But more often than not, almost every kind of B2B offering business service, whatever is somewhere to help people, it's going to affect cost. So how do you affect costs? How do you answer that question? How do you help them save money? If you're an accounting firm, if you're a legal firm, answer that question. Secondly, how do you save them time? Everybody feels more harried now. We're all on 24-hour clocks. The phone never stops. Email comes in and literally, and we all know that everybody listening has encountered the email that was sent on Sunday night and Monday at 8:30, somebody's calling you, "Hey, didn't you get my email?" "You just sent me the email last night. It was Sunday. I was off." But there's no off. So time is an issue. So how are you helping people save time? Third category of value that we like to look at from a problem solving point of view, is hassles, right? So really dig in on this one. What vexes your customer. So any time a customer calls your customer service or calls you as the President and has a complaint, sometimes we as human beings, we deal with complaints like, "Okay, how do I placate this person? How do I deal with this? No, really. That's what it comes. Humanly. We just want to go away. We don't like. But write it down because maybe they're telling you something. Really, they say, "Look, I don't understand why the label couldn't be on top of the box. Why it had to be on the bottom of the box. That made our whole team have to come. We have to turn the box upside down. And the barcode was on a different label on a different part of the box. They had to move the box again. That was three motions versus one that. Really tick me off." And then so you could hang up the phone and say, "Can you believe this guy? He's worried about the labels on the box?" Yes, that is what business is like today. You have to worry about the label on the box because it matters. Because people are looking to save hassle. And the fourth area is risk. How do you reduce somebody's risk profile? That's the world of guarantees. That's the world that we get it right every time. That's the world, I learned this a long time ago, working with me, rest in peace, Don at Lido Chem, I was doing a project for him as a software designer. I was a kid, just probably in my 20s, and I was in his office doing some software programming. And I just heard a situation come up, and it was an interesting situation. And what it was was that somebody had called and said one of the deliveries, they sold chemicals, wholesale chemicals. One of the drums did not arrive. They're supposed to be 40 drums. It was 39. Now, Don's operation is pretty tight. They knew that they sent 40. But he said, and I still remember he was on the phone with the customer. He says, "We are rushing you that 40th drum. We're so sorry. That was a mess." And it's like going back over 30 years ago with this happened. So hung up the phone, I said, "Don, why did you do that?" Because I think and I remember somebody worked for him, said, "No, we had sent it all 40. We had checked." He says, "Here's why, Jose? Because I work in a world where my margins are nickels per pound. And that customer and many others like them want the very best price. But they will pay me an extra penny compared to a competitor." And they'll give me the last call. So they'll call me and say, "Can you do $0.39? And he'll say, "I can't do 39? I can do 39 and a half." And they give him the business. So he differentiated on a service dimension, which, by the way, any small company can do it if they commit to it. And he just didn't give him a hassle. He eliminated the hassle the risk of dealing with him. He saved them money over time because he could actually make sure that they were always getting a fair price. And he saved them time because they didn't have to source the product all the time because they could go to his company and know they're getting a fair price. I'm sure they checked the market from time to time to make sure prices were right. But that was his philosophy. And I learned a lot even as a young entrepreneur. Back then, I said, "Wow, just a little thing." So I would say to anybody, saying, what can you do practical things is always look at what annoys vexes frustrates your customer and see, can you solve that? If you can solve for the annoyance, you don't have to become Apple. You don't have to have, like, we're going to invent Google or things like that, which is great if you have that. Hey, God bless you. Do it. But for most people, it's just being easier to deal with on many little things. And if you can inculcate that in your culture, we're always thinking, how do we make life easier for our customer? Just that as a mantra, like on the wall and really mean it. We are committed to making life easier for our customers. You will grow your business just off of really following that and making sure that goes throughout your whole organization.

Tim Fitzpatrick
So when we look at these four elements and I want to make sure I got this right. So one you talked about helping people save money or make money. Two was saving time. Three was eliminating hassles. And four was reducing risk. We can look at any one or all of those elements as ways to establish a competitive advantage, right?

Jose Palomino
Correct.

Tim Fitzpatrick
And notice some of these things will come out in marketing and your sales process, but they don't always come out that way. Right. Like some of it, like eliminating hassle. Sometimes that's a customer service issue, right. Or an operational issue that you can put in place to eliminate that hassle, right?

Jose Palomino
Yes. But I'll give you a great example. One of my favorite examples of clients to work with. They're in delivering home heating oil, one of the few non B2 B customers I've ever worked with at Valley Prop. But it's a great little story. So how do you differentiate home heating? The answer is nothing. With the oil, it's a global commodity. All delivery trucks use the same exact oil from the same refineries and so on. So there's no difference in New York, I said, "Gee, how are we going to do this?" And by the way, oil as an industry is declining. Homes are converting to gas and all new construction is gas, not oil. Right. So that's real big issues, existential threats of the business. So they needed time to shift their business strategy towards other, more profitable things that have longer life and so on. But they have been in oil for, like, over 50 years and as well. How do you know when to deliver oil? Because there is no sensor, there's no WiFi connection. It's 285 gallon drums that they have, he said, "Well, the industry uses something called a weather algorithm, which estimates based on humidity, temperature, and past usage when a customer is going to need to have oil delivered to them, so they don't run out of oil because the house goes cold pretty bad in the winter." All right. Great. And I said, well, and he says, "Everybody uses the same algorithm, and we were running a ton of overtime hours on Saturdays. We missed a run and we missed something." But then we commissioned our own algorithm and they did this proprietary software, right. They were able to do this as a small company, but it was a real significant investment and as well, how does that work out? He says, "Well, last year, we had 60,000 deliveries, and we missed nine." That's 99. 99% accurate. I said, "Why? And you did that to eliminate over time." I said, "Have you told your customers this?" And this goes to your point about the connection, right?

Tim Fitzpatrick
Yes.

Jose Palomino
He said, "Well, not really." I said, "Well, let's tell our customers." And I said, "Would you be willing to if you let somebody run out of oil, fill the tank on your dime?" And that's, by the way, $5 a gallon, 285 gallons. Real money, right. As a consumer purchase. He said, "Sure, because it's so rare." Okay. So we launched what we call the no run out guarantee. And we said, others make promises because everybody says automatic delivery says we won't let you run out. But there's no guarantee.

Tim Fitzpatrick
Yeah.

Jose Palomino
They were willing to guarantee because they had an operational advantage that they leverage into a marketing advantage. What happened was it allowed them to go after the more demanding part of the market, who is willing to pay more per gallon for the assurety of no risk of running out. No hassle. All right. They're going to pay a premium. So it wasn't going to save them money directly. But it certainly saves them time. They don't think about it. And they stay on this program for years. So you have doctors, lawyers in the home. They don't want to worry about that heating oil. They don't want to worry about it. And it allowed them to enjoy roughly at any given point in time, roughly 50% greater margins than just about their whole competitive set on a per gallon basis.

Tim Fitzpatrick
That is an awesome example. It's an example where they took that competitive advantage and then you shifted it into their marketing, right. Because it's a competitive advantage still there. But they're not taking in full advantage of it if they don't tell people about it.

Jose Palomino
Correct. That was the whole thing, right? It was an internal thing. So I think a lot of people listening might say, "Well, we've done some smart things with our operations, with our production." I said, "Okay, how many of those smart things either save your customers money? Save them time? Saves them hassle? Or saves the risk.? If it does any of those things, then you got to tell them."

Tim Fitzpatrick
Yeah. You need to talk about it.

Jose Palomino
You need to talk about it, and you can weave that into your story because it matters because in the B2B world, when you're making a purchase, when you're looking at it's a considered purchase, it's not emotional. It's not like you're buying a Ferrari. It's something you're probably talking to some of the people in your team and you're considering that, there might be some other dimensions, but by and large, 80% of the decision is going to be in those four areas.

Tim Fitzpatrick
I love that. And that's an awesome example, too, of somebody that's in a commoditized market differentiating themselves because you can't talk about the oil.

Jose Palomino
You can't talk about the oil.

Tim Fitzpatrick
Who cares? Oil's oil. Well, some people might debate that, but most people, if the customer doesn't see the value in it and they're just like, "Look, oil is oil, you can't talk about the oil." This has been a fantastic conversation. I learn new things when I talk to you, and I know people who listen or watch this will pick up some new things as well. Do you have any last-minute thoughts you want to leave us with?

Jose Palomino
Yeah, I would say this, Tim, and thank you again for just the opportunity to share with you and your audience. It's a great I get charged for the topic as well. I would say that no matter how small you are and how limited you might feel, there's always ways to think about. How can I better please my customer? And I would say, Think of it. That's a question worth pondering. I would say keep a Journal, have a yellow pad by your desk, by your nightstand. And don't try to do one of these things where I have to come up with something right now like marinate on the spot as you talk to customers. What's annoying them? It may be something that's annoying them that has nothing to do with your service, but it's something you can mitigate in some way, by the way, you do what you do. So think about that and then start talking about it with your team. Say, "Hey, what's really ticking off our customers? What are you hearing from them? Even if it has nothing to do with us? What's annoying them?" And let them say whatever they say and you start whiteboarding them and say, "Is there anything here we can help them with?" Even if it's not something we sell, it's just something that we solve the problem. We solve this kind of supply chain thing and we can tell about it. It could be that there are so many ways to add value, if your commitment is to add value.

Tim Fitzpatrick
I love it. Where can people learn more about you? You've dropped a ton of value here. No pun intended there. You obviously have a ton of experience. You know what you're doing. If people are interested in learning more about how they might be able to get some help from you. Where do you want them to go?

Jose Palomino
Sure. So our website is ValueProp dot com. That's V-A-L-U-E-P-R-O-P dot com. And the stuff we've been talking about today around competitive edge, you can go to valueprop dot com forward slash edge. There's a whole page describing what we do in this area around helping companies develop their competitive edge.

Tim Fitzpatrick
Awesome. Do not wait. Jump over there. Valueprop dot com forward slash edge. I'm sure Jose would be happy to chat with you. I always enjoy chatting with him, so I know you'll get a ton of value from it as well. Jose, thank you so much, man. I really appreciate you taking the time today.

Jose Palomino
My pleasure.

Tim Fitzpatrick
It's always great to reconnect.

Jose Palomino
Yeah, absolutely.

Tim Fitzpatrick
For those watching listening, thank you so much. Really appreciate it. If you are running into roadblocks with your marketing, you're not sure what that next right step is, hop on over to our website, Rialto Marketing dot com. That's R-I-A-L-T-O Marketing dot com. Click on the Get a Free Consultation and I will be happy to chat with you and help give you some clarity on what those next right steps are for you. Thanks so much. Till next time. Take care.


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About the author, Tim Fitzpatrick

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