The Added ValueBy Jacek Baranowski, International Sales Manager, Metal Market Asia
Published on June 5, 2019
Operating in highly competitive and demanding markets poses a challenge for businesses hoping to succeed. How can the company be distinguished from the competition? How can it attract more customers and ensure they keep coming back? How can it escape the hopeless loop of lowering prices to attract more interest only to require even more of it to sustain the rigorous pricing policy? All these questions lead to one fundamental question: What is the added value the company can bring to the table?
In a difficult and well-established market like investment precious metals, where most dealers carry similar portfolio of products and most manufacturers adhere closely to the very same and high standards, the added value may be the determining factor of the company’s success. Precious metals buyers are hardly known for being novelty seekers and the nature of the industry itself significantly limits the opportunities for brand new, out-of-the-box ideas. Therefore it is even more crucial for a company to find something unique to offer, thus differentiating itself from the competition.
Gathering resources is hardwired into human behaviour, and its evolved, more cultured expression – building collections – has accompanied mankind through centuries. Collecting art pieces, trophies, valuable trinkets, books, and more is a passion shared by people from all times, places and cultures. It is a deep fascination with putting matching things together and organising sets that fuel a collector’s zeal in search of missing pieces, bringing fulfilment once everything is in its right place.
It is exactly this nature of ours that producers of collectible items tap on, and it is what adds excitement to precious metals investing. The myriad of wonderful designs, the thrill of the hunt for rare specimens, the temptation of completing the set – all these bring an element of sheer, childlike joy to the rather studious and uninspiring process of saving up.
Given the choice to buy gold in the form of a plain bar or nicely finished coin with an interesting backstory, many customers will gladly choose the latter even if it means paying a premium. And that’s precisely where a bullion dealer can leave its mark. First, by offering a broad portfolio of products and steering the customer in the right direction, helping him navigate the vast sea of long-running series, new editions, one-off commemoratives, etc.
Second, by collaborating with the mints or refineries on exclusive coin programmes, and bringing new, exciting products to the market. A successful series can not only coax existing customers to keep coming back, but also attract new ones – which is the goal of every business hoping to expand. In recent years, several exclusive Perth Mint bullion coin series made for particular dealers got collectors worldwide excited. Coins such as Swan, Australian Emu, and Dragon & Phoenix proved to be instant hits, with their collectible value quickly exceeding their metal content value.
In the digital era, the importance of quality online solutions cannot be overstated. A tremendous amount of precious metals physical trading is done on the internet, so having an online presence is a necessity, not added value. However, the way this presence is manifested can either promote a business and put it at the front row or have it lagging behind. A traditional phone trading desk with simple email correspondence is the bare minimum, but is no longer capable of meeting customer needs and expectations. Trading platforms with multiple functionalities, automated sale/purchase processes, storage and shipping options at one click, charts, price alerts, investment calculators – all these are sought after by more educated and discerning investors.
A neatly organised, transparent, user-friendly and attractive web solution is often the best advertising a company can have, bringing in more customers than the grandest marketing campaigns. Questions about trading platforms are among the most pervasive ones within the industry and there seems to be a constant struggle to perfect existing solutions or to come up with newer and better ones.
In this quest of finding the most visually attractive, the most flexible, user friendly, comprehensive, stable and secure system, one important aspect of human nature should not be underestimated – people are creatures of habit. We become attached to familiar things and change more often than not simply irritates us. It’s not uncommon to find better, simpler, more thought-out websites losing out to far inferior ones, due to this very reason. That’s why every attempt at implementing new solutions should consider the customer’s perception on the new features and layout. Whether it will be considered an added value or a value ruined?
The company’s reputation, product authenticity, online data protection, terms and conditions, secure transportation and storage, all factor into a transaction’s security – a major concern of all precious metals buyers. Covering all of the above is only the first step, the next ones are about building trust and providing reassurance. Each and every customer wants to be certain of two things: that the metal is authentic and that it is kept in a safe place.
The role of the manufacturer and the dealer is to show that the supply chain has not been broken and that the product’s authenticity can be easily and surely verified. Being a step ahead in introducing new security features can ensure a manufacturer’s product is given a prominent spot among bestsellers and gives dealers a good reason to promote it. Offering customers only the safest, most advanced products is a good selling point especially since there is not much innovation possible in the investment gold refining other than amping up security.
This is the added value that can help convince potential customers and determine the brand choice. Providing an engaging and positive narrative for the salespeople should always be a priority for producers, because they are the actual establishers of the prevailing buying habits. In the precious metals industry, narratives about security, authenticity and verifiableness is and should be the strongest ones.
The globalisation of markets, high connectivity and online accessibility, have caused the differences between customers worldwide to diminish, and with them, suppliers too have become more alike. In the investment precious metals industry it is especially noticeable since most manufacturers produce extremely similar products and all dealers carry almost the same items. Even in terms of pricing most sellers have access to the same sources. This creates a unique environment were the field is so levelled that secondary features actually determine the outcome. The added value becomes the selling point. And it is the exclusive, collectible product; the multifunctional, user-friendly online solution; and the high-security storage and effortless authentication option, which may give businesses an edge over their competitors.
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