By: Erik Kane | On: October 28, 2020
Value. A simple concept that drives nearly every transaction – but one that can be tricky to wrangle onto paper! Expressing qualitative features and benefits using quantitative measures is by definition going to be a slippery slope. Yet as consumers, we perform this math equation in our heads in various ways many times throughout the day. Comparing various cuts of meat, bottles of wine, which gym membership to go with…or perhaps cancelling your gym membership altogether and building your own at home! Each of these decisions is driven by the overall value presented by each option with a simple goal in mind – achieve the greatest overall value!
The Value Equation
Around Christmas-time every year, the Hose Master family (machine operators, tool and die makers, sales, engineering, administration…everyone) get together for our annual company debriefing. Our CEO, Sam Foti Jr. (the son of our founder) stands in front of the whole organization and presents the rundown on how the previous year went – and one element of this discussion is constant each year: our value as a manufacturer. As a self-proclaimed marketing whiz, I’ve seen this equation expressed plenty of different ways depending on the industry and situation it’s applied to…and at Hose Master the equation is always written the same way:
At a minimum, our Value number has to be positive. If it is, it means that the quality of our products and the service at which we deliver them is worth more to our customers than what it costs! This is not enough however…having a positive value equation only indicates that it makes sense for us to be in business, not that we’ll be successful. Meaning – if we want to win consistently, not only does our Value have to be positive, it has to be more positive than our competition in order for us to get picked when it comes time to buy. Clearly we want our Value to our customers to be as high as we can possibly make it. Not only will it allow us to grow, it helps us continually raise the bar and continue to become a better manufacturer.
How Does Hose Master Calculate Value?
Different businesses manipulate this equation in their own way in order to determine a viable strategy that works for them that will also produce a Value number that is higher than their competition. For example: as long as you leave the other variables the same – lowering your Cost to customers or boosting your Quality will net you a higher value. Hose Master’s strategic approach to the equation is to have the highest possible Quality and Service possible so that after we subtract what it Costs, we will still have far more Value left on the table, leading customers to choose us.
Okay, Where are the Numbers?
You’ve likely noticed – I haven’t even mentioned any numbers yet!
This is the tremendous power of the simplicity of the value equation. I left out a major detail from my story: that during our annual meeting we do not attach numbers to this equation either. Regardless of role, background or tenure – every employee in the company benefits from knowing and keeping this equation in mind. By reviewing our strategy and the details of how the Quality and Service variables are being incorporated into what we do, everyone can frame the equation into their own world and apply those principles. Whether it’s purchasing our raw material, operating a machine, engineering new products, or selling the ones we already have – the company has a focus on Quality and Service at all levels.
Because Hose Master is committed to having the strongest value equation in the industry, we’d like to hear from you! We take great care to manufacture the highest quality products and to support our customers with the best service in the industry. If you have questions, comments or suggestions on how we can improve – or would just like to share what you enjoy about Hose Master, please feel free to call us at 216-481-2020 or reach out to us on social media!