Tuesday, May 24, 2011

It Is Hard To Believe: Customers Lie


Rising fuel costs are pushing prices up for everything we buy. Printers are seeing jumps in paper and every other thing they buy. The rising costs mean lower profit margins if a printer doesn’t react quickly, but we aren’t seeing a jump in print prices because customers tell the printer it isn’t happening.

Every day I talk to printers who are concerned about raising their prices. They tell me that they can’t raise prices because their customer told them they could get the job cheaper somewhere else. When we drill down in the conversation, I find that usually the printer doesn’t have any facts to what the prices really are. He is just going on what he was told by the customer.

Printers lose jobs every day because of price. A certain percentage of customers requesting a price will make their buying decision on price, but that doesn’t mean everyone buys on price. There is usually one other factor besides pricing that affects the decision.

I think a printer would be hard pressed to find a top 25 customer who buy from them based solely on price. Usually top 25 customers have a history with the printer where the printer has proven it can meet the customer’s needs with a fair price. The printer delivers the job on time. The printer assures the quality is high. The printer will work with the customer’s budget and his emergencies. There are a lot of intangibles that can’t be obtained from the low-priced printer.

Yet printers don’t listen to their top 25 customers when it comes to price. They listen to the person who walked in off the street and is buying his first printing order. He is shocked when the price is high. The printer is listening to the person who just saw a price on the Internet that was low, but doesn’t realize the specifications for the low cost job are limiting. Does he really want the Internet printer’s name and web address on the back of his business card?

Printing isn’t a charity. You can’t give people special prices because they can’t afford the printing. You are allowed to make a fair profit on your products and services. You need to make a fair profit so you can pay your employees and purchase the equipment that gives customers better and faster service.

And the average invoice for most quick printers is in the $300 to $500 range. If you added $25 to the $500 order, would you lose the customer? That is a five percent increase? Would a customer leave you because the bill last time was $300 and now it is $315 to cover your rising costs?

Next time you hear that walk in customer or price shopper complain about your price, just think of your top 25 customers. Did they complain when you stayed late to meet their required delivery date and you charged them the normal price? Your top 25 customers buy from you and your staff because they like you and you give great service at a fair price. Know the facts before you start cutting your prices just because a customer couldn’t afford what you sell.

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