Have you ever had a customer ask you to lower your price? Have you ever heard, "Is that the best you can do?" We all have.
Just today I had a customer who has been printing with us for many, many years. Not a big account by any means and much smaller than it used to be. However, he is very loyal and there certainly is value in that. But his business has slowed and he was looking for a price break for a recent reorder.
It was a very small order to me, but it wasn't to him. Sometimes it's hard to remember that the $100,000 and $1,000,000 revenues are made up of many, many smaller sales.
So he was asking for a break. What did I do?
A few months ago we installed some new software which gives us a much better handle on our costs involved in jobs. It has helped me be more competitive and taken out a lot of guess work in pricing jobs. It has tons of other management tools where I have barely scratched the surface.
So here's what I did. I was able to pull the job I priced for him and look at the hard costs involved. For example, let's say he wanted some NCR forms and the quoted price was $135.00. He was asking of we could reduce the price "since times were slow for him". (Apparently he's not reading the news about how bad things are for printers!) With the job details in front of me, I told him that my hard costs were $100.00 in this job. I told him, "I'm making only $35.00 on this job, what do YOU think I should make?"
That changed the dynamics of the conversation. Being a businessman himself, he could recognize how thin margins were. So then the discussion became a joint effort in how the job could be changed to reduce my costs and his price.
We changed some of the specs. I reduced his price. He was happy and my margins remained intact.
And by the way, if you need 500 to 500,000 NCR Carbonless Forms, I'm your guy.
Advantage Printing is a commercial print and marketing service provider serving small to mid-sized businesses, nonprofits and churches.
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