Why NICE negotiation skills can double your print profits
Here’s a simple way to double your profits
There’s no magic trickery involved. There’s no need to invest in dubious get quick rich schemes. It’s just a basic sales strategy.
The solution is to add 5% to your selling price.
Let’s look at the maths involved
Most printing companies don’t make a lot of profit on their jobs. By the time everything else is taken into account, their profit may be just 5%. So adding 5% to your sales price doesn’t sound like it will change much.
However, this extra 5% is pure profit. So, if your profit margin is 5% to begin with, you will double the amount of profit you make on that job. (I’m sorry if I am stating the obvious to you here. But when I have explained this to many people it appears to be a major revelation to them!)
Naturally, many people in the print industry will tell me that this isn’t so simple!
Surely buyers only choose on price: they won’t accept an extra 5%
Price will always be an important part of the final decision. However, if you look through my blog, you will be surprised at how many other things influence the buying decision.
Buyers like to push on price. But they can often be encouraged to change their minds if you approach the final price discussions creatively.
That’s where NICE goal setting comes in
When planning a price discussion with a prospect or customer, there are four things you should take into account:
This is what you have to have, otherwise you must walk away. It includes things like the minimum sale price, the right payment terms and an acceptable schedule.
This is what you would expect to achieve in a normal negotiation. It makes a good entry point – as long as you are prepared to stand your ground if the buyer starts pushing!
What would you be prepared to give away in order to get the deal? There are often lots of things that are valuable to a customer that need not cost you a lot of money.
What could you get from the customer in order to help them out with their part of the deal? There may be things that might be worth a lot to you that are not worth so much to the customer.
— Matthew Parker (@PrintChampion) February 24, 2016
Here’s an example of how to put NICE negotiation into action
Let’s say you have quoted a customer for an urgent job. The customer wants to use you. But they have asked for a cheaper price. Rather than move from your intended, or entry, position, you could make a new proposal.
You could suggest that, instead of lowering your price, you will give them a dedicated delivery rater than an overnight service. This gets them the job quicker. And, if the customer is at an event, it makes sure they get the delivery rather than the overnight driver giving up when faced by the typical event gatekeeper!
The dedicated delivery will cost you more money. But it will usually cost you a lot less than the value to the customer. It’s the sort of negotiation element that allows you to keep your price (and your profit margin) high.
Other ideas might be to offer the customer:
- a shorter schedule (if you can achieve this without too much trouble)
- a better quality stock (if you happen to have something suitable in your paper store that you want to get rid of)
- some extra copies: the cost of producing the run-ons can be a lot less than the price reduction the customer was hoping for
Here are three suggestions to help you achieve NICE negotiation
Have a list of options you can offer instead of a price reduction – and make sure you value them correctly for the customer
Make a plan to stick to the price you offer
Invest in “How To Make Print More Profitable: The Print Industry Negotiation Handbook”
Suddenly, adding 5% to your sale price won’t seem as difficult as you thought
You are on the road to doubling your print profits!