Value Beyond PriceMr. Jerry Nelson

AWMI New York ChapterFebruary 16, 2016

Today’s Market Analysis• Steel is oversupplied both globally and in the

USA market.• Pricing globally has been driven by “cheap”

foreign offerings.• Strong USA dollar has kept USA mills’ costs

relatively high.• Trade rulings providing some relief.• Demand is “ok” but not superb.• Commodity cycle will likely have a protracted

price bottom, which will keep downward pressure on steel prices.

2Value Beyond Price

Not Your Father’s Downturn; It’s Really Dire Circumstances

• USA steel mill shipments were down 10% in 2015 to 88 million tons.

• USA apparent steel consumption was down 9% in 2015 to 109 million tons.

• Integrated mills have shuttered 10 million tons of capacity, or 19% of their total steelmaking ability. If this capacity had been off-line for all of 2015, their collective utilization rate would have been 87% versus the 74% reported.

• EAF based mills are operating on reduced turns and in some cases as low as 50% of capacity.

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In a Very Competitive Market, It Pays to Differentiate Yourself

Given the current state of affairs, what can we do?

Demonstrate Value to your Customers!!!

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Create Additional Value Around the Product Through Superior Service

People are willing to pay more for a product if they think it gives them a truly special or significant value –

and if you present it to them in just the right way.

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Present the Total Value Proposition

The key to success is your ability to discuss the total value proposition of your products and services.

• Understand your customers needs.

• Know your products….

• and why they are best for your client.

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Explore and Understand the Ways Value is Created

• About one-third of consumers are purely hung up on price, while the balance are open to at least hearing what you have to offer.

• It is almost embarrassing at times the way people don’t understand all the ways they bring value.

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Listen to Discern the Value Your Customer Desires

Don’t get so caught up in your own presentation that you don’t listen to what is important to your customer.

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Investigate Beyond the Obvious

Question Everything: Thoroughly review what your customer is currently doing. Things like:

• Freight alternatives• Material substitutions• Optimum Quantity purchases

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Be Respectful & Focused; Present the Vision

• The most difficult thing when selling value to customers is getting them to visualize the full depth and breadth of what you can offer.

• Be prepared and keep your presentation concise and quantifiable.

• Respect their time and make their job easy!

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Be Willing to Adapt; Stay Positive and Compete on Your Strengths.

• Individuals and companies that adapt quickly will be most successful.

• Be professional, don’t make excuses or badmouth a competitor if they have a better offering.

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Foundational Business Principals from The Godfather

“It’s Just Business”….. Michael Corleone

• Don’t take it personally.

• Respect the challenges of your customers.

• Don’t be angry at someone doing their job.

• Never sacrifice your own integrity.

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Relationships Create Value

In conclusion:

• Why are they going to buy from you?

• Because they like you!!!

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