Salespeople Say 'Price,' Customers Say 'Value'
Frequently, I have conversations with printing company owners and CEO’s. We talk about the current state of business which, even pre-COVID-19, was daunting. Among the challenges that have not lessened in intensity is the level of capacity, lack of differentiation, and perceived commoditization of the printed product. The result of these combined factors is a downward pressure on price.
Adjectives like brutal, illogical, unreasonable, and predatory are used to describe the current state of pricing in a hypercompetitive marketplace. This phenomenon is not exclusive to a specific region, nor is it reflective of a certain size of company. While no one can deny the reality of overcapacity and its effect on pricing, customer research indicates that we may be missing something here.
For many years, leading printing companies have used the eKG Customer Research System to help them measure and monitor their Competitive Profile Index. The approach is unique in that it uses 22 questions, 16 of which are standard and six of which are customized to the specific interest of each company. Over the years, thousands of print customers of hundreds of customers have answered the very same questions. Of course, one of the 16 standard questions deal with price.
This rich database of customer responses is a wonderful resource. A high-level analysis provides some interesting patterns. One has to do with price.
In looking at the issues print customers rate as most important, sure enough, price consistently ranks in the top five-but it is never No. 1. In fact, it is rarely even in the top three.
What are the other items in the top five? Reliability (product quality and on-time delivery) for sure. But they also rate “understands my business,” “offers ideas and suggestions I can use,” “easily accessible,” and “responsive” as high in importance. Time and again, the best customers of the best companies tell us that while price and quality matter, they are overshadowed by a demonstrated interest and understanding of the customer, their business, and what it is they are trying to accomplish. Absent those factors, and if quality is considered a constant, there is only one thing left to talk about: price!
There may be a significant opportunity here. And it begins with a question: How much do you know about your customers’ businesses, their objectives and what it is they are trying to accomplish? The very act of trying to find out may just set you apart from the competition.
Joseph P. Truncale, Ph.D., CAE, is the Founder and Principal of Alexander Joseph Associates, a privately held consultancy specializing in executive business advisory services with clients throughout the graphic communications industry.
Joe spent 30 years with NAPL, including 11 years as President and CEO. He is an adjunct professor at NYU teaching graduate courses in Executive Leadership; Financial Management and Analysis; Finance for Marketing Decisions; and Leadership: The C Suite Perspective. He may be reached at Joe@ajstrategy.com. Phone or text: (201) 394-8160.