Move the Battlefield Away from Price
By: T.J. Tedesco
For: Dee Gentile, Management Portfolio
Published: Nov/Dec Issue 2008

The current U.S. economic crisis is driving companies to look at all business costs with an eagle eye. Expenses are being studied and whenever possible, eliminated. Nothing is exempt; employees, travel, business entertainment and yes, commercial printing.

This presents a challenge to printers: being price competitive without undercutting one’s value proposition. Beware of entering the price battle on your customers’ terms. If you pursue this all too common path, you may be setting up your company for long term profit erosion.

If your organization’s focus is only on beating competitors on price, yes, work will come in the door but the effect will be like a cheap Chinese dinner – you’ll be hungry in a few hours. Moving the battlefield away from price is the best way to create a win-win situation for both you and your customers. Strive to move job specifications in ways that don’t really matter to the print buyer, but help reduce your production costs. There are many ways of doing this and your options are only limited by resourcefulness and ingenuity.

An obvious place to start is paper. If a customer specifies a particular brand of a “warm” #1 sheet, perhaps one of your house sheets has a similar look and feel. If so, consider including a second price using the less expensive stock along with the price the customer originally requested. Even if they say “no thanks,” you’ll at least have differentiated yourself by showing you care a bit more about their needs than your competition.

Other differentiating areas to consider are partial deliveries, gang printing, in-line coating, more signature-friendly page counts for books and booklets, folding sequences, electronic proofs instead of paper proofs, production in sister facilities closer to final delivery point, untapped postal discounts, color builds rather than spot colors, and the list goes on. These are meant to be idea joggers and certainly aren’t applicable in every instance. But you won’t find any production savings unless you look!

If successful, you might be able to meet the price of a low cost competitor, while maintaining your all-important contribution margins.

When talking with customers and prospects, focus on your core competencies. Know your company’s differentiation strategy and unique selling proposition (USP) and make sure your front line sales reps, customer service reps and other key individuals with customer contact are able to successfully communicate them. Then, look for companies that value your differentiation strategy and USP and veer away from those that don’t.

Companies with a sales force that offers “me-too,” “please-just-let-me-quote,” or “tell-me-where-I-need-to-be” selling propositions will lose in the long run. These are not real reasons to buy. And, when someone does, they’ll have no reason to pay your desired price.

“Your Price Is Too High!”
Wouldn’t we all like a nickel for every time we’ve heard this one? Admittedly, pricing pressures are more extreme today than in the past. That doesn’t mean there aren’t ways to differentiate your business and command a premium for what you do.

Let’s digress ... take a look in the mirror. Are you wearing the cheapest shirt you could find? What about your shoes and belt? Probably not. How about your wallet, car, or anything else? Were these the cheapest functional products available at the time of purchase? With few exceptions, no, and with good reason: your appearance is worth more than saving a few pennies.

The same is true for printing and the people with whom you want to do business. Fear of making a bad buying decision is a huge motivator, especially when print jobs – and people’s jobs – are on the line. That’s why it’s in your best interest to be positioned in the mind of the buyer as the safe choice, the one that makes your customers look good. Then, pricing objections will melt a bit and you will sell more at better prices.

You’ll only get that opportunity if you can sell more than just ink on paper or toner on paper. Here are three selling messages to emphasize, ones that your customers and prospects will gladly pay your price for, as long as the difference is real:

Convenience: When a prospect considers doing business with you, the first thing that pops in their head likely will be, “What’s in it for me?” Your prospects want the comfort of being able to contact you when they want. If this means keeping your cell phone on longer than usual, what’s the real harm? I know this falls in the realm of personal choice, and this is difficult to mandate throughout a company, but in plain words, those who remain in touch are more valuable than those who do not. When you and your company sell the convenience of making your prospects’ lives easier, you’ll find more willing buyers.

Safety: This is important enough to state again. Everyday, your prospects encounter fear in their business lives: Fear of blown deadlines, fear of dealing with vendors and customers, fear of losing a job ... and the list goes on. Discover the source of your prospect’s fear and position yourself and your company as the solution, the remedy, the anecdote. When you are properly positioned as the “safe choice,” your prospects will trust you with a larger percentage of their business.

Peace of mind: When you make it your business to sell convenience and safety, you’re making implicit promises. Now, deliver! Kept promises are the peace of mind your prospects simply can’t put a price on. In this industry, the key to success is the ability to forge and maintain long-lasting business relationships. Companies that continually prove their value by making promises and keeping them will have a roster of happy clients that see no reason to do significant business elsewhere.

Remove pain, reduce price objections
Once a prospect’s buying fears are removed, or at least diminished, you have a much better chance of getting a stream of business at the price you want. Rest assured that every seasoned print buyer has at some point been severely burnt by a low-cost print provider. Identify the previous or current pain and focus your selling efforts there.

Price objections are a reality in the hyper-competitive graphic arts industry. Emotion, not price is where purchasing decisions really lie. After all, a lower price means little if deadlines aren’t met and promises aren’t kept. Print buyers never want management heat focused on them caused by bad sourcing decisions. When you get an opportunity at your price, make sure all goes as intended.
How exactly how do you discover buyer pain, especially when it’s different for each prospect?

Ask piercing questions: It’s rare that a prospect will actually come out and tell you exactly what their pain is, much less how to relieve it. You must ask the questions that get them to share their areas of significant concern. Ask, “What happened the last time your current print services provider missed an important deadline? Or try, “When a project is at your printer, how do you know production is on schedule?” Then, listen for buying clues. (By the way, the best sales reps ask 25 times more questions than poor reps that love the sound of their own voice, but this isn’t today’s topic.)

Listen and dig deeper. Once you have your prospect sharing their pain, uncover as much of it as possible. Ask follow up questions like “how did that make you feel?” or “what did you do about that?” or “how many times has this happened?” Get your prospect to share the details of what’s causing their pain. People love talking about themselves. Be a great listener for good reason; your prospects may provide you with all information you need to treat their pain and win their print business.

Feed off emotions. While you’re asking your prospect questions that bring their pain to the forefront of the discussion, be sure to match their level of emotion. Nothing will end the pain discovery process and the opportunity to make a sale faster than being disengaged from your prospect’s emotion. Maintain eye contact, lower your tone of voice and lean towards the prospect because these subtle physical actions are all signs of engagement and interest.

Get your whole team working on value
When pricing pressure is at its strongest, the ability to effectively handle price objections will help you win more business and maintain profits. This effort should involve your entire team. Certainly involve anyone in your company with significant customer contact. If your estimators, production managers or job engineers work with customers, encourage them to understand the important principles of moving the battlefield away from price.

What about those on the plant floor? Stop short of formal sales training, but let these important people know in no uncertain terms that their behavior is also part of the customer experience. In the daily crush to get work out the door, basic business manners can sometimes be deemphasized or forgotten altogether. Remind every employee in your company of the vital role they play in maintaining happy customers. Inappropriate behavior and unprofessional work conditions affect the way customers and prospects feel about a printing services vendor.

Internal communications such as a company newsletter, shop floor bulletin board posting or even a stuffer in paycheck envelopes are all good ways to get internal messages dispersed. Employees will climb aboard when they are reminded that their actions contribute to or detract from the customer experience, which is an essential component for moving the battlefield away from price.
Today’s bottom line?  People, not prices, win jobs.

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T.J. Tedesco is president of Grow Sales, Inc., a full-service sales growth firm that has served the graphic arts industry since 1996. Grow Sales services include marketing, public relations, Web site design and sales support. T.J. is the author of “Binding, Finishing & Mailing: The Final Word,” “Win Top-of-Mind Positioning,” and the ever popular “Direct Mail Pal,” all published by GATFPress and available at Amazon.com. T.J. can be reached at (301) 294-9900 or tj@growsales.com.