Tuesday, April 19, 2011

Price Pressures Continue To Grow

A visit to the grocery store or gas pumps lets us know how quickly prices can change. Pricing are going up quickly and not just for consumers. Printing companies are seeing their costs rise. The question is whether or not printers will react and raise prices or eat the rising costs and suffer the consequences.

I'm continuing to get calls from printers who are complaining that their competitors are “giving work away.” They say they are forced into price wars because a few low-ball printers are messing up the market for everyone and making customers expect to get lower prices.

I can’t agree. Printers are notorious for being poor sales people. Most just wait for customers to call and then react by giving a price. Since studies show that most customers don’t have more than three vendors for any product or service, it is hard to believe that customers are getting that much pricing information to put pressure on a specific market. I can’t believe that print prices are the topic of conversation between business people over lunch or that some printer is actively calling on customers promising the lowest market price.

What I believe is happening is that all customers are looking for the best deal possible and are asking “is this your best price?” Price is only one of the considerations a customer has when selecting a printer, but printers think that since the customer asked the question, then price must be foremost in the decision.
There is always going to be a customer who only goes for the cheapest prices. There are always going to be printers who will do the job below costs just to have work for their employees. The best way to combat this is to get out of the shop, make sales calls, and build a customer base that will pay a fair price for your products and services.

Tom Crouser recently posted a video at his website at www.crouser.com that discusses how lowering your price doesn’t get you additional business or profits. The 18-minute video will help expose some of the myths about pricing and perhaps, keep printers from cutting their price just to get the job.

Printers have to raise prices. The cost pressures are increasing and to delay passing on price increases is unfair to printers and their employees. Printers are in business to make money. There is nothing wrong with asking customers to pay a fair price.

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