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Printing_News_February_2017

Case Study: PRINTING’S RULES OF Price, Product, & Sales Activities Somewhere along the line, many of us took Econ 101 and we bought into the simplistic fi ction that “as price goes down, demand goes up.” And, “as price goes up, demand goes down.” But they never actually taught that in your Economics class because that’s not the law of supply and demand. Th e fact is, there are no laws, not a single law, of supply and demand. Yet, about all that anyone remembers from their Econ class is the law of perfect competition: where supply and demand do have a direct correlation, but only under very specifi c circumstances – including that all fi rms sell an identical product. Printing is not ‘perfect’ Well, printing isn’t printing. Printing isn’t printing as coal is coal, or as wheat is wheat. Th e biggest diff erence between my printing and the printing from the guy down the street is that, with my printing, you get me and my years of experience in doing exactly what you need. Also, in the perfect-competition scenario, there has to be perfect information. All buyers and all sellers must know of all prices as each transaction occurs. Heck, it’s hard enough getting two people in the same shop to come up with the same price, let alone match the guy down the block. Finally, in perfect competition, there must be no scarcity. Is there scarcity in printing? Yes, there is: “Take this 400-page book and give me 20 exact duplicates by noon.” It can be done, but not every shop can do it. So, perfect competition doesn’t apply here, and cutting our price in half will not result in twice as many sales. Instead, we need to focus on monopolistic competition because that’s where we truly operate, and you have to keep in mind its three rules if your company is to prosper. The three rules Price: Price matters within a class. Lexus, for instance, is a low-priced auto in the luxury-car class. Mont Blanc and Bic both make pens, but one isn’t a substitute for another. So, within the class of printers capable of delivering archival-quality color or variable graphics, price matters. But if a buyer needs variable data, only shops who can do that matter. Sell to what the customer needs, not necessarily what they want now – by doing so, you narrow the competition from all printers to only those that can provide what’s specifi ed. You should also focus your selling approach, refi ne it. “I sell everything, do you want to buy something?” Th at’s a blatantly weak off er. Much stronger is: “I can deliver your unique selling proposition in an exceptional way to your best prospects in the state.” It begs the question of “how?” or “tell me more.” It also serves to limit your price competition. Product: Our attitude tends to be, “You tell me exactly what you want done and I’ll do it – or we’ll do it over without charge.” Huh? A true print professional knows more about what the customer needs than the customer does, and oversees translating customer needs into production specs. A print professional speaks in terms of “prosperous green” when speaking to a customer, then translates that to PMS 361 for production. Th e need of the customer is identifi ed and then serviced by adopting the proper product. So, price matters within the class of product that best serves the customer’s needs. Sales activities: As an industry, we tend to not provide our prospects with top-of-mind awareness. We don’t proactively use our ability to create direct mail, call customers on repeat jobs that should be ready to reprint, or even verify who the buyer is at a prospect’s offi ce. Instead, we oft en wait for the customer to come to us to beg to buy. Only when our big customers leave do we panic. And then it’s usually too late. So, it’s not quality, service, and price, and the customer can pick any two that they want. It’s price, product, and sales activities. Especially sales activities. Th at’s what makes the diff erence between prospering and just bumping along. By Tom Crouser Senior Contributing Editor Tom Crouser is senior contributing editor, chairman of CPrint International, and principal of Crouser & Associates, Inc. You can reach him at 304/541-3714, connect on Facebook and LinkedIn and follow his business tweets on Twitter @tomcrouser. Find this article at PrintingNews.com/12293317 22 Printing News ® February 2017 PrintingNews®com


Printing_News_February_2017
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