Printing Impressions

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TJ Tedesco

View from Mount Olympus

By TJ Tedesco

About TJ

T.J. is team leader of Grow Sales, Inc., a marketing and social media services company operating at the intersection of compelling content, clear vision and quality communication practices. In this blog, fire is a metaphor for print. Hang on, this ride will be weird...

Prometheus crept into Mt. Olympus, stole fire, returned to the lowlands, ran from house to house distributing it, got caught, was chained to a rock, lost his liver to a huge ugly bird and was rescued by Hercules. Leveraging his fame, Prometheus started Fire Enterprises Inc.  (FEI). Since fire was the hottest technology of the time, company success came fast and furious. Two generations later, fire isn't such an easy sale. Now led by Prometheus' grandson Org, FEI's growth is non-existent, competitors are pounding and prices are in the toilet.
 

Move the Battlefield Away from Price

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Last time, Marka the marketer and Zoot the salesperson discussed the importance of “top-of-mind” positioning. This week, the topic is “moving the battlefield away from price.” Remember, fire is just a fancy metaphor for print.

Today’s FIRE! Point:

If you’re competing against other companies without moving the battlefield away from price, your printing services are nothing more than commodities. Even though many print buyers pay lip service to low prices, their security depends on reliability, quality and expertise—not price. If you position your business as the safe choice, you will move the battlefield away from price, earn a better margin and develop greater customer loyalty.

    *    *    *

“Is getting a sales inquiry call good enough?” Marka asked Zoot. Marka had propped her sandal-clad feet up on the conference table, and Zoot didn’t relish seeing her ugly toes.

“I think you want me to say ‘no,’” Zoot replied, averting his eyes.

“Of course.” Marka gulped a drink of water directly from her bottle.

“Want to use a glass?” asked Zoot. The stylish salesperson was always mindful of good manners and appearances, neither of which seemed important to his friend Marka, with her tangled mop of hair.

“Nah, I never change my routine when I’m on a roll,” Marka replied, wiping her mouth on her sleeve. “Anyway, Zoot ol‘ pal, competing against other fire companies without moving the battlefield away from price means our products and services have achieved nothing more than commodity status. In commodity product industries, tactics such as regular price specials, ‘loss leader’ pricing, dumping, gimmick marketing, tie-ins, discounting and mega-branding efforts are the weapons of choice.”

“That doesn’t sound like the fire industry to me,” Zoot said.

“Let’s hope not!” Marka cried. “Our business is founded on relationships and trust. If a buyer of fire trusts Fire Enterprises, Inc. (FEI) enough to rest easily after giving us an important order, then our company is succeeding.”

“Talk to me about price,” Zoot said, trying to steer the conversation to the bottom line.

“Over the long run, price is rarely the true motivator driving purchase decisions,” Marka started. “Do buyers scramble for their professional lives when they award jobs to reliable companies? Companies that deliver a quality product on time?”

“Of course not,” replied Zoot. “That’s what you call a good night’s sleep, right?”

“Hey, for a sales guy, you’re not bad at this stuff,” Marka said playfully. “So do companies panic when they lose customers because of poor service, bad manufacturing quality or constantly serving up an outdated product line?”

“Of course,” Zoot scoffed. “Even though most consumers and B2B buyers of fire pay a lot of lip service to low prices, their security depends on reliability, quality and expertise—not price.”

“Brilliant, Zoot! And if we can position our company as the safe choice, we will move the battlefield away from price, earn a better margin and develop greater customer loyalty,” Marka said. “Think of it this way: What’s the cost of a hearth going cold? What if there are children in the household?”

“Cold toes at night,” Zoot started. “Cold breakfast? No light at night for kids to do their homework?”

“There are consequences beyond inconvenience,” Marka continued. “Cold hearths lead to children catching colds, which can lead to more serious illnesses. We can easily say warm hearths contribute to the better health of an entire family!”

“And how can you put a price on your family’s health!” Zoot shouted, banging his knuckles on the knotty oak tabletop.

Marka relaxed a bit. This marketing stuff is going to work.

    *    *    *

FIRE! In Action

Procter and Gamble raises prices and profits

Last year, Procter and Gamble responded to a hike in oil by raising prices and rolling out a high-end skin care line. Evidently consumers were willing to pay more for the name-brand products, as P&G saw an 11% increase in annual profits. (http://bit.ly/bGWhir)

LAST NOTE: If you’re a printer, loose-leaf manufacturer or finishing company that uses oil-intensive materials, your costs have increased. If the cost of energy affects you, and you’ve done your relationship homework, you may be able to raise your prices too.

Next blog: Marketing nuts & bolts begin with a discussion about a Customer Nurture Program.
 

Industry Centers:

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COMMENTS

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Most Recent Comments:
Bill Farquharson - Posted on May 27, 2010
Oh, man, I am hooked to this Soap Opera! I wonder if Zoot has an evil twin brother coming into the picture any time in the future!!!! Good stuff, TJ!
TJ Tedesco - Posted on May 24, 2010
Brian – Fabulous! You’re so right - Unless we compete at a strategic level and demonstrate ROI, we will be perceived as commodity suppliers. Funny thing about commodities through: on the front end (i.e. bidding and sales part of the relationship), our service is perceived as a commodity. But once the job’s in the shop, what we’re selling is anything but. How many commodity suppliers (#2 pencils, gasoline or pork bellies) have to do anything resembling a midnight press check? Another differentiator for the print industry that any print buyer with 2+ years experience knows - things go wrong. And have very real consequences! So the trick for a new vendor is to demonstrate that your prospect’s job is safe (double meaning intended) in your as-to-yet unblemished hands. Back to your point about competing at a strategic level. All of us involved in selling print should all strive to “lock” in our customers. Consider storing and fulfilling your clients’ inventory, managing digital assets and integrating within manufacturing processes. Printers that successfully do this are very hard to drop for a few bucks. Thanks for the excellent comments. T.J.
Brian - Posted on May 24, 2010
TJ, Let's be honest here, the real reason printing companies are getting an opportunity is because they're already considered a safe choice. None of those characteristics (reliability, quality, expertise) are unique differentiators unless you can prove them to be superior to your competitors. You either have these or you don't have a business...these are givens. The truth is that print is a commodity and unless you can engage at a strategic level and demonstrate ROI, it is just another tactic/expense. That means being asked to bid because they trust you and then giving you an opportunity to be the cheapest. Sorry, but I don't think your "safe" positioning is a deterrent for the price objection...not in the world I'm selling in anyways!
TJ Tedesco - Posted on May 24, 2010
Patty - Good question! Every business has key selling advantages. Established businesses have track records, which should help land new opportunities. If possible, new businesses should be positioned to fill marketplace voids. In these cases, your track record is less important than the sharing your vision with appropriate customers and prospects. When you do get opportunities, make sure the customer experience is completely in line with your selling proposition. Bottom line: Businesses of any size and longevity can move the battlefield away from price, even SNV! T.J.
Patty Traynor - Posted on May 22, 2010
Okay, okay! I hear you! But get your ugly toes off my desk! But seriously... here's a question. Not that there are a whole lot of start-ups in the industry, but how does one balance the price issue when the company is new? People (and businesses) look for an incentive to change what they are doing. Let's say they are happy with the vendor they are using. SpankinNewVendor, Inc. calls on them & says, "Give us a try." What incentive does the customer have to try SNV? They aren't an established company like FEI. With a good price, they might give SNV a chance to prove themselves. SNV does a great job, but the customer still expects great (read: lower) prices for the next great job. It certainly makes sense to move the battlefield away from price, but how does one find the right balance?
Click here to view archived comments...
Archived Comments:
Bill Farquharson - Posted on May 27, 2010
Oh, man, I am hooked to this Soap Opera! I wonder if Zoot has an evil twin brother coming into the picture any time in the future!!!! Good stuff, TJ!
TJ Tedesco - Posted on May 24, 2010
Brian – Fabulous! You’re so right - Unless we compete at a strategic level and demonstrate ROI, we will be perceived as commodity suppliers. Funny thing about commodities through: on the front end (i.e. bidding and sales part of the relationship), our service is perceived as a commodity. But once the job’s in the shop, what we’re selling is anything but. How many commodity suppliers (#2 pencils, gasoline or pork bellies) have to do anything resembling a midnight press check? Another differentiator for the print industry that any print buyer with 2+ years experience knows - things go wrong. And have very real consequences! So the trick for a new vendor is to demonstrate that your prospect’s job is safe (double meaning intended) in your as-to-yet unblemished hands. Back to your point about competing at a strategic level. All of us involved in selling print should all strive to “lock” in our customers. Consider storing and fulfilling your clients’ inventory, managing digital assets and integrating within manufacturing processes. Printers that successfully do this are very hard to drop for a few bucks. Thanks for the excellent comments. T.J.
Brian - Posted on May 24, 2010
TJ, Let's be honest here, the real reason printing companies are getting an opportunity is because they're already considered a safe choice. None of those characteristics (reliability, quality, expertise) are unique differentiators unless you can prove them to be superior to your competitors. You either have these or you don't have a business...these are givens. The truth is that print is a commodity and unless you can engage at a strategic level and demonstrate ROI, it is just another tactic/expense. That means being asked to bid because they trust you and then giving you an opportunity to be the cheapest. Sorry, but I don't think your "safe" positioning is a deterrent for the price objection...not in the world I'm selling in anyways!
TJ Tedesco - Posted on May 24, 2010
Patty - Good question! Every business has key selling advantages. Established businesses have track records, which should help land new opportunities. If possible, new businesses should be positioned to fill marketplace voids. In these cases, your track record is less important than the sharing your vision with appropriate customers and prospects. When you do get opportunities, make sure the customer experience is completely in line with your selling proposition. Bottom line: Businesses of any size and longevity can move the battlefield away from price, even SNV! T.J.
Patty Traynor - Posted on May 22, 2010
Okay, okay! I hear you! But get your ugly toes off my desk! But seriously... here's a question. Not that there are a whole lot of start-ups in the industry, but how does one balance the price issue when the company is new? People (and businesses) look for an incentive to change what they are doing. Let's say they are happy with the vendor they are using. SpankinNewVendor, Inc. calls on them & says, "Give us a try." What incentive does the customer have to try SNV? They aren't an established company like FEI. With a good price, they might give SNV a chance to prove themselves. SNV does a great job, but the customer still expects great (read: lower) prices for the next great job. It certainly makes sense to move the battlefield away from price, but how does one find the right balance?