Editor's Note: This article originally appeared in Larry Hunt's High Speed Copy News, and is reprinted here with permission. Please visit the Larry Hunt newsletter site by clicking here: http://larryhunt.com/
By Paula Fargo
We printing company owners often seem to have a dichotomy when it comes to pricing philosophy. We complain and gnash our teeth, griping about the customer who will drive ten miles to save a dollar. “Don’t they understand?!,” we rail. “Our product is superior! Our equipment is better! Our staff is more attentive! Our deadlines are faster!” It’s just not fair.
Flash to your last equipment or consumable purchase. Did you spend hours researching, trying to find the absolute best deal possible? Did you beat up your vendor to make sure you got an even better price than your friend who just bought the same item? Did you squeeze in every last freebie to go with your purchase?
Do you see the conflict here? It is very difficult to remain on the “higher price” moral high ground when expecting your customers to pay more than they could when you are constantly beating up on your own vendors.
When you want to buy a shirt, how do you go about it? At Nordstroms, and you can buy a really nice shirt for $75.00. You get a beautiful store, attentive employees, a pleasant buying experience, and a liberal return/exchange policy. But that is a lot of money for a shirt. How about going to Walmart instead? You can get a shirt there for $10.00. What a savings! The shirt is not as nice as the one at Nordstrom, but maybe that’s ok. The experience isn’t as nice, but again, perhaps you don’t care. The lines are pretty long for check out. And returning the shirt once you wear it if there’s a problem with it will likely be a hassle, if not impossible. But look at all that money you saved!
But wait, maybe $10.00 is still too much for a shirt? You can go online and buy a cheaper shirt than that, but don’t forget about shipping costs. Or maybe you could go to Goodwill and buy a $2.00 shirt? Or scrounge around in your neighbor’s trash for one?
I think you see my point; there is always a cheaper alternative, no matter how little you want to spend.
My contention is that is not the best way to buy, especially for your business, and especially if you don’t expect to sell at a rock bottom price to your customers.
It might seem odd reading about this topic in the Larry Hunt newsletters, a bastion for owners who want to get the lowest prices for their equipment purchases. However, the Larry Hunt newsletters does not need to be wielded like a club over the heads of unsuspecting equipment vendors. It can and should be used as a weapon in your arsenal for making excellent equipment and service decisions.
Just because you know someone somewhere in the US paid $75,000 for a piece of equipment does not necessarily mean you are either entitled to the same deal or even would want the same deal. Think about how you treat your penny-pinching customers versus how you treat those clients who tend to spend more money for the same products? Who do you give better treatment to? If you answer honestly and say you give the same great treatment to both of them, then please allow me to gently suggest that you are not making a wise business decision. The person who pays the higher price deserves better service. Period.
Perhaps your equipment vendors are down with that philosophy too. Are they going to be breaking land speed records getting to your equipment problem when you spent months holding them hostage to save $500 on your purchase price? Maybe not. I could be wrong, and you could be thinking that those people who service your equipment have no idea how much you paid and how you were to deal with during the negotiation process. However, is that a chance you want to take?
The saying “You get what you pay for” is perfectly applicable here. By all means, use the information found in these amazingly helpful newsletters as leverage and for information to make sure you are fully aware of what you are committing to. But that does not mean if you pay more than you’ve read here, you are getting a “bad deal.”
Negotiating is tricky. If one party is totally happy and the other totally miserable, then that is not characterized as a good deal. Both parties should have given up something they wanted and also gotten something they wanted.
And paying a higher “price” often means you are getting a greater “value.” Shouldn’t we all sell on value? Your $100 business cards are a higher price than Vistaprint’s $15 business cards. But yours are a higher value. Why? They are here when you need them, and not a week later. You have the opportunity to speak to a live person and ask questions, altering your specifications based upon a professional opinion. You have recourse if there’s a problem. You can see a proof and make changes. You have many different stocks from which to select. Is that worth $85? That is where you need to “sell” your value.
The myriad pricing surveys done in our industry over the past few decades bear out my point: there is a wide range of pricing on “identical” products in our business. Profitability studies have shown that strong pricing strategies often lead to higher profitability.
Which leads me back to my original question: are you a Pricing Philosophy Hypocrite? You will have much greater credibility and be able to hold your head high when giving your “higher” price if you “walk the talk” and are willing to pay a higher price for better value for your own goods and services, translating to better products and services for your clients.
I’ll leave you with a final question: Have you become the type of buyer with your vendors that you cringe at when “that buyer” walks into your shop?
Paula Fargo is the owner of Curry Printing & Copy Center and also Copy Cat Printing, both in Baltimore, Maryland. Raised in Baltimore, she got her bachelor's degree in Economics as well as her MBA in Economics from Loyola University Baltimore. In addition to successfully operating her two printing companies, she enjoys reading, going to live music concerts and being a Sherpa for her Triathlete husband, Lance Fargo.
Copyright 2016 by Larry Hunt Publications. No part of this report may be copied or reproduced in any form without the express written consent of Larry Hunt Publications. Material presented in this publication is based on the best information available but cannot be guaranteed for completeness or accuracy. To subscribe, contact Larry Hunt Publications, P.O. Box 1269, Berryville, VA 22611 - (540) 336-3360, fax - (888) 345-3860, email: firstname.lastname@example.org, website: www.larryhunt.com. Dirck Holscher, editor.