Almost as common as “going green” or maybe “think global, act local,” a perennial contender, or should I say offender, for most overused sayings in our industry is “adding value.” What does this really mean and how can your company profit from it? “Adding value” or “Value added” are basic economic terms which represent the price difference between what it costs you to make a product and what you sell it for. Yes, in other words, it is why we are in business. It is our favorite goal/concept/need/passion—you get the point—Profit!
The challenge with this concept is how to add more of it doing what you are doing today. For example, if you are a marketing service provider, it might be time to make the foray into analytics or velocity drip marketing systems.
The great news is that adding profit doesn’t necessarily need to come by way of new investments or enhancing services. It can come by partnerships or dependable vendor relationships.
Although there are a lot of ways to add value, in my experience, the prerequisite to adding more value requires a departure from the “business as usual” mentality of figuring it out when the customer need arises. What can be done today to increase the profit of the engagement is a question that needs to be asked as many times as you can during the business day.
Once you identify what services are reasonable extensions of your or your staff’s capability, list them in order, with the highest margin work on top, and select the top quarter.
Can I Add Value by Reducing Cost?
Yes, as long as profitability is increased, so is the value. One example is use of the Every Door Direct service from USPS. By allowing you to use carrier route-based delivery, local businesses can now effectively mail to relevant target audiences for less than 15-cents apiece.
Granted, you cannot use personalization. However, you can certainly add lots of profit by placing SMS text-based coupons, QR codes, and mobile websites on static print (read, litho) to deliver a highly memorable experience at rates not seen since 1978 for a postage stamp.
Isn’t Adding Value All About Customer
No, adding value is all about profitability. Unless the brand value of your company allows you to consistently charge more for your product than the marketplace, it does not constitute added value. I point this out, as a lot of us are victims to investing in systems that make our process better, but not able to command a higher value for the product or service.
Needless to say, depending on whether your customers are print management companies, agencies, or end customers will have a tremendous impact on acceptable profit margins, but there are strategies and services which will help you command more value for your product in each of these segments.
Until next month, keep printing, my friends!
Sudhir Ravi is a serial entrepreneur who runs a variable data print practice within TVP Graphics in Streamwood, IL. Want to continue the conversation? Contact him at firstname.lastname@example.org or 312-772-3191. Connect via Twitter @ThinkVariable.