The ability to provide cost savings without risk can be a very compelling selling point, and that’s what the strategic buying contractors are saying. Let’s think about the second part of their proposition, though—beating up on suppliers to get the lowest price. Personally, I think there’s a fair amount of risk there, because the more price pressure a buyer exerts, the more likely it is that a supplier will have to cut corners in order to win or keep the work and produce it profitably.
My first experience with strategic buying contractors was in Europe, where I consulted with printing companies in England and Ireland a few years ago. The short term effects on my clients were difficult—one of them lost three of his top 10 clients within a three month period, but the longer term effects were not as severe. That’s because I coached my clients on a “passive-aggressive” strategy. It was passive because it recognized that the customers were going to do what they were going to do—the offer the contractor made them was just too attractive not to give it a try. It was aggressive, though, in that we positioned ourselves for the likelihood that anyone who was willing to sell at the prices the contractor demanded would eventually cut corners and fail to perform.
“We understand the attractiveness of this proposition,” we said, “and we understand that if it gives you great quality and service in addition to great pricing, we’ll have lost your business forever. We just want you to know that if it doesn’t turn out that way—if the pricing comes at the expense of quality and service—we will welcome you back with open arms.”
In other words, we didn’t burn any bridges, and we also stayed in close touch with the customers to commiserate with their dissatisfaction with the new regime.
Eventually, much of the business came back. Interestingly, the contractors still maintained a role in the customers’ businesses, because much of what they worked on worked out just fine, but printing and several other categories were either removed from the contractor’s control, or else they were simply instructed to buy from the “old” supplier and to dial back the pricing pressure.
Bottom line: Nobody wants to pay more than they have to for anything. As I’ve written before, though, part of the definition of selling in our industry is to explain how much it will cost to get what is wanted or needed. Sometimes that means that you have to allow a customer to experience “the other side of the coin”. In other words, losing the battle, but still winning the war.
Dave Fellman is the president of David Fellman & Associates, Cary, NC, a sales and marketing consulting firm serving numerous segments of the graphic arts industry. Contact Dave by phone at 800-325-9634; by fax at 919-363-4069; or by e-mail at firstname.lastname@example.org. Visit his website at www.davefellman.com. See the ad for Dave’s products and services in this issue.