Ivelin Radkov
Race To The Bottom Price War Concept
Editor’s Note: The most recent APDSP webinar was about how to avoid competing on price. Sales trainer Dave Fellman provided some strategies for dodging the price war, and here are five of the best. To view the entire webinar, click here to log into the APDSP Member Center and click on the link on the left side that says APDSP Webinar: Navigating Away from Price.
1. Decide how you want to position your firm. “Do you really want to be the cheapest printer in town? Now it is true if you have the most modern, up-to-date equipment you can produce at the lowest unit cost. You can offer pretty low prices and still make some profit. And if all of your equipment is paid for it and you don't pay your employees very well, you can also offer really low prices and still make some profit. But I don’t think that is who you want to be… Let’s introduce a magic word: Value. Ultimately people will buy from you at whatever your price is if they see value in your price, if they look at your price and say, yeah, this has a good price, this reflects value. I feel like I'm getting what I want, what I need at this price and I'm happy with this price.”
2. Fire, or change, the price monsters. “Some customers are price monsters. That’s my term for people who buy on price, who make all of their device decisions based strictly on price. … How do you define a bad customer? … My definition of a bad customer is anybody who is more trouble than they're worth. Give some real thought to exactly what it is that causes problems for you and your team and then see if you can set up a meeting with your bad customer. I've had a lot of these meetings and I always start out by saying, ‘Thank you for your business’ and then I continue by saying we'd like to do even more business with you, but when we do business together, it doesn't go smoothly all the time and I was hoping we could talk a little bit today about some of those things, those problems, those issues. I have had conversations that ended with the customer changing their behavior. … You might be pleasantly surprised at how often you can turn a bad customer into a better customer just by talking with them.”
3. Poor follow-up is worse than high prices. “I think more opportunities are lost to poor follow-up than anything else…. [An acquaintance] told me ‘I’m happy to give new guys the opportunity to bid on jobs, but how come they never follow up? I’d say half these printers ask for an opportunity to provide a quote, but never follow up.’ “
4. Don’t lead with price. “This [acquaintance] told me, ‘When they do follow-up, they always ask, “How was my price?” I tell them they were competitive, not the lowest, but they’re not going to win the job on price alone. Nevertheless they always say, “Can I have another chance? Can I take another shot at this? Can I sharpen my pencil?”’ ….. So think about how what you say can reinforce the idea of selling on price… Find out if it’s your salespeople who are doing all the talking about price, and therefore undermining your profitability.”
5. Sell to the right people within an organization. “If you have the opportunity to sell to the purchasing agent, or to marketing, human resources, facilities management, others in the organization who might be considered the owners or originators of the print project…which of those categories is most likely to be a price monster? Is it the marketing manager, who’s counting on the printed stuff to get something done for them, or the purchasing agent, whose job is to get the lowest price?”
This is just a sample of what was in the webinar. To view it all, click here to log into the Member Center, then click on the tab on the left that says "APDSP Webinar: Navigating Away From Price."