Not Pricing Print Correctly Is an Unforgiveable Sin

Dealing with price cutting is not new in the printing industry. Historically, traditional print solutions have continually faced excruciating price competition due to over capacity and commoditization.

Today, as new applications and services become available and the economy continues to be unstable, there will be print providers and sales people who will lower prices to gain quick market share and new accounts. This can be a fatal strategy for the future of a printing business because it makes it impossible to sustain a professional business relationship with a customer.

There are few graphic communications companies or sales people that can survive over an extended period selling products and services at low prices.

I keep a quote on my desk from Printing for Profit by Charles Francis written 90 years ago: “The Unforgiveable Sin: Underestimating is the most serious error of the average printer. It is a sin that brings its own punishment.” This is not only a caution for printing companies, but should be a mantra for their salespeople as well.

The Best Salespeople Sell Profitably

Through the years working with graphic communication companies, we have frequently asked print shop owners, sales managers and customers to rate their salespeople from top to bottom. We give them no specific criteria. The result may surprise you.

With rare exception, the top ranked salesperson is the one that generates the highest profit margins. It is not uncommon for the top ranked salespeople to not only generate the highest profit margins, but also the most sales as well. Try this exercise in your own company. 12 Selling Strategies

To Combat Price Cutting

There are number of key factors that affect customer pricing decisions. Salespeople must be prepared to convince their customers that their offerings are superior both operationally and financially.

If you are not achieving higher prices where you have distinct advantages, it is time to rethink your approach and develop a new sales and marketing plan. Use the pricing scenarios below to test your sales skills and strategy.

1. Is there something else we can buy cheaper or better?

At higher price levels, customers who spend large amounts of their marketing budgets for traditional print and direct mail campaigns are likely to look at the costs of alternative ways to communicate with their customers, or perceived substitutes, such as the Web, cross-media, advertising etc.

We have been seeing a large number of customers moving to Web-based communications for no other reason than the difference in cost. To combat this issue, salespeople must have a confident perspective of why print works better or as a complement to the Web.

2. Are you a one-trick pony, or a one-stop shop?

The more capabilities a printer can provide, the less price sensitive the customer will be. Those graphic communication companies that can provide more of the creation, data base capabilities, project management, fulfillment, binding, mailing etc., the more they will be perceived as a one-stop shop.

The more value added a salesperson can inject into the solution, the more margin they will obtain.

3. Wow, is there anyone else doing this?

Market-driven companies are less sensitive to price if they value any or all of the unique characteristics of the solution being provided.

The bottom line here is that, if your solution can be differentiated and generate perceived business results, top performing companies are willing to pay for it.

4. Who else can produce this?

Having perceived experience providing industry specific i.e. Pharma, Financial or complex products or services (i.e. VDP or cross media), the customer will be less price sensitive. When salespeople have this advantage and knowledge they have great leverage in extracting higher prices from customers.