Customers Will Pay a Premium for Speed
Everywhere we turn, opportunities to enjoy faster service are presented. Fast service, while certainly appreciated, often is offered at a premium—one we’re all too willing to pay. Even during the recession, people found ways to cost-justify their need for speed. Consider, for example, the recession-proof high-speed internet business, which remained nearly unscathed. This is evidenced by a survey conducted in June 2009 which found that 84 percent of consumers identified broadband as an essential service least likely to be cut during financially difficult times. The research also found that consumers, even while reducing spending in other areas, were planning to subscribe to or upgrade their broadband services.
We need speed, and we’re willing to pay for it.
Examining closer our infatuation with speed, I see rapid growth of electronic toll-collection systems that have millions of people buying and installing transponders in their vehicles. These allow us to pay tolls while traveling at highway speeds—no need to wait in line to exchange pleasantries with the toll-booth operator. I also see retailers chomping at the bit to implement mobile payment services, thanks to technology developments like Visa’s digital wallet and the Google Wallet developed in partnership with MasterCard.
We also see evolutionary high-speed activities being introduced in the restaurant industry, noted from a look at the website of ExaDigm, a supplier of wireless credit-card terminals and wired point-of-sale transaction terminals. Restaurants are rapidly adopting such technology to provide us with quick-serve solutions such as pay-at-the-counter, pay-at-the-table, and pay-at-the-car—all so we can get in and get out as quickly as possible, because, I suppose, we have better and more productive ways to spend our time.
The need for speed, and the premium that can be charged for faster service, certainly carries over to the metalforming and fabricating arena. Just ask the tool designers and builders gaining new customers hand over fist because they have been able to fine-tune their companies to enable quick turnaround on new projects. We now see lead times measured in days rather than weeks or months. Those that can step up to the plate can charge handsome premiums for such service.
This fact came into focus during my recent interview with a metal stamper and die builder serving the automotive industry (you’ll read more about this in the March issue of MetalForming.) For a host of reasons, it seems OEMs as well as Tier One suppliers frequently are delaying projects at the front end while not allowing back-end due dates to slide. To enjoy this luxury, they’re often willing to pay a premium for what can be dramatic lead-time reductions.Those suppliers that can take the heat from being squeezed from both ends will reap the benefits—the premium being paid for speed.
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