NEWS RELEASE September 2021
Make it Easy to Buy a Better Pump, Valve, or Filter
Every supplier is striving to show why his product is a better choice than the one the prospect is using. Revenues for companies selling air, water, and combustion related products and services are over $600 billion per year.
Fifty percent of these products are in the high performance category where price is secondary and the service is unique, critical, or severe.
There needs to be a better way for purchasers to determine which product will best meet the high performance requirements. This could increase revenue and EBITA by $45 billion.
If the product is already performing at the prospect’s plant or is the market leader, the default position is that this is the best performing product.
Claims of a new and better product fall on deaf ears unless there is supporting evidence relevant to the unique requirements of that plant in that location and for that application.
There is no system in place to make it easy to demonstrate a better product for a specific niche. As a result you have two strategies. One is to minimize R&D and be content with EBITA of less than 15%.
Another strategy is to focus on very narrow niches. Several companies with this strategy are enjoying EBITA above 30%.
However without a system to easily demonstrate superiority of a better product, the pursuit of these niches is challenging. Success has primarily come from acquiring existing small companies focused on a niche.
As a result, these high EBITA companies are not revenue market leaders. Ninety-five percent of the $300 billion of revenues in the high performance segment accrue to companies with EBITA of less than 15%.
Despite all the potential of the internet it is no easier to make the right decisions than it was in 1974 when McIlvaine introduced thousand-page loose leaf decision guides
A new approach is needed. It involves publishers, conference organizers, associations and the suppliers of systems and products.
McIlvaine proposes a holistic program as explained at http://home.mcilvainecompany.com/index.php/30-general/1658-holistic-content-marketing-program
The program starts with a market forecast in each niche.