No to ‘Value-Added’ Plans –Farquharson/Tedesco
The ‘Value-Added’ Conundrum
Value-added comp plans reduce print sales reps' willingness to problem solve because they're incentivized to work in a small sandbox: Either they can do it or they can't. Less restrictive sales plans based on total revenue allow salespeople to play in a much larger playground and are free to pursue client needs. Of course, reps working under total revenue comp plans still look for ways to tweak job engineering specifications for use and cost advantages, but they're doing it for the client, not for themselves.
How would Joe and Jane react to the following opportunities?
• Job 1: $100k miniature folding job
• Job 2: $50k polywrapped and mailed booklet with a customized reply form inside the book matching the address on the outside cover
• Job 3: $25k plastic spiral job with laminated covers
Assuming neither Joe nor Jane's employer has miniature folding, automated plastic spiral inserting, laminating, polybagging and inside/outside inkjet imaging equipment, this is what each would probably say:
JOE: “The miniature folding portion of this job is 90 percent of the value of this job. We’ll take a pass.”
JANE: “Bring it on baby! We have the perfect miniature-folding partner for this job. I’ve been in their plant many times and, rest assured, we’ll take complete responsibility for the whole thing; you don’t have to worry at all.”
JOE: “Yes, we can bid this, but let’s substitute shrink wrapping for polywrapping. Also, rather than binding the reply card inside the booklet, let’s lay it on top of the non-addressed side of the booklet before shrink wrapping.”
JANE: “Got ’cha covered. Polywrapping is 1/4th the price of shrink wrapping and perfect for this job. Sure, we can save a buck by onserting a free-floating reply card on the backside of the booklet before polywrapping, but is this in your best interest?
Bill Farquharson is a sales trainer for the graphic arts. Email him at Bill@AspireFor.com or call (781) 934-7036. Bill’s two books, The 25 Best Print Sales Tips Ever and Who’s Making Money at Digital/Inkjet Printing…and How? as well as information on his new subscription-based website, The Sales Vault are available at BillFarquharson.com.