Why discounting is the route to failed print sales

Posted by Matthew Parker

Let me tell you about Sean

Sean is very fussy about his coffee. He knows what he likes. He only likes the best. Sean makes sure that he gets premium coffee.

But he never pays full price for it.

Sean buys his coffee from a specialist coffee merchant. It’s the type of company where you expect to pay more for the service and products that they provide. If you look at their price list, you’ll see why only coffee connoisseurs shop there.

So why is Sean paying substantially less than standard prices?

The issue lies with discounting

print-selling

Having a sale is not a good idea for printing companies

Every 2 to 3 months the coffee merchant runs a special offer. The first time it happens, Sean was pleasantly surprised. But then he got wise to their ways.

Now he just waits for each special offer and then buys his coffee in bulk. The coffee merchant meant the sales offer to expand their client base. They hoped that the reduced prices would encourage customers to try new lines.

But all these sales and discounts have achieved is to reduce their profit margins.

Printing companies face a similar problem

Price discounting is seen as a valid strategy to win new customers. It is also used to fill presses at short notice.

It’s a very common strategy. Every week I received emails from printers trying to win me over with special offers. It’s great news for me as the buyer. But it’s not so good for the company.

Here are three reasons why price discounting doesn’t work.

Buyers see discount prices as the standard price

It doesn’t matter how much a print price is branded as a special offer. Buyers will always expect a special price to set a new standard. They will rarely accept a price increase unless there has been an increase in raw material costs.

However, if you suddenly start offering discount prices it may change their view of you as a supplier.

Buyers see discount prices as a sign of commodity selling

If you are selling on discount prices then buyers will simply assume that you are a provider of cheap print. Discounting your prices simply distracts buyers from any value elements of your sales message.

It encourages them to treat you in exactly the way that you don’t want to be treated.

Buyers use you drive competitors’ prices down

Many times buyers may not have any intention of using you, despite your special offer. However, they will be very happy to use up your valuable estimating and quoting time. They will use it to try and get other prices to beat up their current suppliers with.

Even if a buyer does go with your special offer, you can be sure they will move to a new supplier just as soon as they find a cheaper price.

So what’s the alternative?

If you want to create a special offer to attract a buyer, it is still possible to stay away from price. Why not offer something of value instead?

You could offer buyers a design review, a data report or a postal review. The buyer may benefit far more from such a service. It may be worth a lot more than a slightly cheaper price.

This strategy also has another benefit. It demonstrates other value-added services that you offer.

If you do go down this route, it is important to remember one thing.

Always remember to price your value-added offering

If you are offering an extra service, make sure your customers know what it is worth. That way, they will find it easier to understand the value of what you are offering.

It will also be easier for you to charge for it next time.

Here are three action points to get you started

  • Review your policy of price discounting
  • Develop two or three value-added offerings
  • Make sure price is attached to these offerings

It’s time to stop offering discounts. Otherwise you’ll just end up slashing your profit margins, just like the coffee merchant.
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P.S. Receive more advice on alternatives to price discounting when selling print – written by a print buyer. You’ll also receive a free copy of my e-book “Ten Common Print Selling Errors and What To Do About Them” (worth £19/$29)

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3 Responses to Why discounting is the route to failed print sales

  • David says:

    We always get request for discounts but do not discount off our price list (well maybe once in a blue moon). This makes it easier for our employees since the price on the price list is the price we charge. With regards to sales, we are starting a sample sale like 50 free full color digital printed envelopes. Something a customer can take advantage of but not something that the customer would use in place of a regular order.

    • Matthew Parker says:

      That’s a great strategy David. Are you telling customers how much the envelopes are worth?

      Matthew

  • Colin says:

    Sometimes its a tough decision Matthew, I often think lowest price gets their attention. Would it be easy to sell print if my price was the lowest every time? Maybe, but it is so much more satisfying to ‘value add’. Let me explain 2 months ago I presented a low price to a customer for a quarterly catalogue. I was aware of their current price so I knew I would be in the ballpark. I received the catalougue brief during what was supposed to be a 15min presentation to one person but ended up being one hour to 4 people. I had their attention with a range of different synthetic products that they had not seen before and was so interested in. My challenge now was should I still be the lowest price AND the supplier of this new niche market printing. I walked away quite excited and presented the catalogue price the next day. It wasn’t my lowest price. I was told it was close to the competitor but that they were going to stay with them. Now I would be putting the other printer on notice as to keep those three all important ingredients; on time, high quality and low price. I thought after, maybe my lowest price still would have not won the order as their mind was already made up to use another printer, I don’t know, but I do know the client want’s something I have other than the catalogue and I’ll be hovering around each time one week before order placement every 3 months.

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