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What is Priority One?

Posted February 10, 2011 7:03 AM

With minimizing energy use a key concern in most industries these days, do you find your customers are willing to pay more upfront to minimize long-term operating costs from energy consumption? But how much more are they willing to absorb?

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Guru

Join Date: Jul 2006
Location: "Dancing over the abyss."
Posts: 4884
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#1

Re: What is Priority One?

02/10/2011 11:04 AM

Priority one is always human safety.

"In the first place, do no harm"

Then you can worry about 2) meeting spec, and 3) lowering cost.

it is the nature of customers to push back on price increases. it is our job as suppliers to do the future value present value benefit calculation and sell the solution.

milo

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People say between two opposed opinions the truth lies in the middle. Not at all! Between them lies the problem, what is unseeable,eternally active life, contemplated in repose. Goethe
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Guru

Join Date: Dec 2010
Location: North West England
Posts: 1170
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#2

Re: What is Priority One?

02/11/2011 7:51 PM

I head a consultancy that has been involved in designing industrial production plant and process lines for over twenty years.

One of the questions we always ask when we receive a new enquiry is the customer's pay back criteria. If their normal payback requirement is three years we try to design a plant that will pay for itself in two years six months. This often gives us an advantage over our competitors, even if our price is higher. A premium price energy efficient plant that pays for itself in 27 months taking into account reduced running costs, will usually win out over a lower price plant that pays for itself in 30 months.

It is worth noting that decisions about capital spend are usually made be groups of people who probably have different priorities. So we sell reduced maintenance to the customer's engineering department, higher reliability and productivity to their production guys, improved product quality to their sales people, increased safety to their HR, and shorter payback to their accountants.

We don't have a web site, we have never advertised, all our work comes from word of mouth referrals, and in twenty years we have never been short of work.

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