Why print buyers choose on price – and how to stop them
Have you recently lost a job on price?
Perhaps one of your competitors has just won a job from you with their cheaper price. If this is the case, you may not feel particularly kindly towards the buyer. But let’s be fair, the buyer was only doing their job.
Buyers are tasked with trying to reduce costs for their companies. The most common way to do this is look for the lowest price possible for a product.
But buyers tend to choose on price for one particular type of product
They choose on price when they are buying a product that they understand. When a buyer can create an accurate specification for a product then they have commoditised it. They can go out to the market and bid for the best price from the suppliers that they know.
If you are dealing with a buyer in this situation, your only hope of winning the job is to choose the right price.
Let’s take the example of direct mail. Most buyers understand direct mail items. It is easy for them to obtain prices from multiple suppliers and choose the cheapest option.
So what’s the solution?
Good suppliers offer buyers new opportunities for their business. The right opportunity will help a buyer reduce costs (not price). Or it will help a client improve their business results.
However, to get the right results from this new opportunity, the buyer has to go through a learning curve. The supplier offering the new solution has to educate the buyer.
For example, a buyer may be encouraged to use personalized urls for the first time in a mailer. They understand that this is likely to increase their response rates. However, they need to learn how this works. How is data handled? What is required to build the landing site? What are the best strategies to get the most information and response from respondents?
A buyer in this situation will tend to put their trust in the supplier that has suggested this solution. Trust has been established between the two parties in order to make this project happen. The buyer is not yet confident enough to start bidding this type of work out to other suppliers.
But there’s a problem
After the first two or three jobs, the buyer will begin to understand how this type of job works. They will start to know how to manage the data and the websites and how to handle respondents.
It is at this point that the buyer is in a position to commoditise the job. They have enough knowledge to start finding competitor suppliers. They are confident enough to start tendering the job and awarding it to the lowest bidder.
A smart supplier is ready for this moment
They will already be introducing their client to a new opportunity. They will have the next learning moment ready. The buyer is then back in education mode. They are too busy trying to understand the next opportunity to think about bidding out work and finding the cheapest supplier.
Once a client understands personalized urls, it may be time to introduce them to other levels of variable data. After this, it might be time to encourage the client to add SMS or social media functionality to their campaigns.
The idea is to take clients on a constant journey. The supplier becomes a valued partner who is always teaching them. Price becomes much less of a focus.
How do you take your clients on a journey?
- List what opportunities you have to educate your key clients
- Start to map out a learning journey for each of these clients
- Think about what opportunities you can develop to continue this journey for your clients
When you adopt this approach you are far less likely to find that you have just lost a job to the competition on price.
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