“Going, going… gone!”
Recently a London Coach House sold at £318,000 ($539,000 for those of you following in the States). The seller and the auction house must have been extremely pleased. £318,000 is an impressive result.
What makes the final sale price so impressive is the original valuation. The coach house sold for three times the guide price.
There’s a valuable lesson here in print sales.
Customers value services differently
I’ve used the word services deliberately here. People often value the print element of a job according to the lowest price. It is frequently seen as a commodity item. However, a service is often valued very differently.
Added value services are often seen as an emotional purchase. Design falls into this category. You can’t just price one designer against another. It’s important to take skill levels into account.
Other services can add huge value to a business. Then price often becomes less of an issue. We shall see an example of that later in this article.
Printing companies that value their additional services highly can dramatically increase their profit margins
They have a much better chance of controlling their business plans. They also often enjoy better customer relationships. Selling value added services in this way often leads to more of a partnership between customer and supplier.
However, before you can sell these types of services successfully there is a vital action you must take.
It’s important to stop selling on a standard profit margin
Many print companies sell everything to a customer on the same profit margin. If you sell value added services on a standard mark-up you are missing the opportunity to raise profit margins.
Instead it is important to understand the value that your services can bring to a customer’s business. It may be helpful to categorise your clients when you carry out this exercise. You can do this by market sector. You may also wish to consider the type of company.
Once you have reviewed the true value of your services, it’s time to take the next step. Show your customers the value your services can bring to their company. Once you talk to a customer about results, price becomes less of an issue.
Let’s look at a case study of selling on value
One company I know sells multi-channel marketing services. One upgrade that the company offers is to add social media interactivity to a campaign.
The cost to the print company is minimal. It involves them in around ten minutes studio time to add this functionality to a campaign.
The value to the customer is extremely high – as long as they are trying to reach prospects who use social media. This functionality can make a big difference to response rates on the right campaign. That means the print company can sell it at a high price.
They value this functionality at several hundred dollars. That’s not a bad return for a few minutes of programming work!
You could have the opportunity to make the same returns
Here are three steps to take to help you sell value added services in this way.
- Categorise your customers as outlined earlier in this piece
- Talk to a customer from each category to understand the true value to their business of your extra services
- Decide a suitable pricing policy according to customer category. Make sure that this is entered into your pricing system and that your sales team is briefed
You may not make quite the same results as the sale of that coach house. However, you may find that you have people spending more than you anticipated, just like that property sale.
Editor’s Note: This post is part of a larger series on how to effectively increase profit using price anchoring and price valuation selling :
- How to Upsell Your Customers With a Two-Price Offer
- How to Increase Your Print Prices Through Valuation
- How Price Anchoring Increases Print Profits
- Case Study: How to Increase Profits When Selling Multi-Channel Print With Price Anchoring
Matthew Parker has been buying print for over 20 years. He’s had over 1,400 sales pitches from printers. Now he’s using that experience to help printing companies engage with their customers and sell print more profitably. Find out more about Matthew on his site. Download his e-book “Ten Common Print Selling Errors And What To Do About Them” for free here, and also check out his latest e-book “How to Use Social Media to Create Warm Prospects” for free here.