One hundred printers recently participated in Industry Measure’s Variable Data Printing pricing survey. Here is a summary of some of the results:
- Thirty-four percent of respondents indicated that they are doing VDP jobs in-house. Six percent indicated that they are outsourcing them.
- When respondents were asked how they price their VDP or VI/1:1 print jobs, two primary pricing models emerge: pricing everything together as part of a single package (37% using this model) and creative and print production broken out by line item (35% using this model).
- Even if respondents are invoicing various services as separate line items, there are still two different ways to price: by value or by cost-plus. Which way are respondents to this survey pricing some of the most common services? Overwhelmingly, respondents not involved in package pricing are pricing by cost-plus rather than by value.
Discussion
By Dr Joe Webb on Nov 14, 2006
Not a surprise.... if you don't design the program, you are just selling press time.... um..... digital printer time.... and nothing else. Old habits are hard to break.
By Patrick Surrena on Nov 15, 2006
Agree with Dr. Webb. Too many printers buy digital equipment to produce VD or VI docs and think of them purely as output devices. But the real value is in making the recommendations on use for the clients, designing the program, then producing it and charging a higher, value added fee for the service. That way, you become a more valuable resource to your client, and you don't trapped in the the commodity pricing game as in offset printing. Guess what? The more digital machines, the lower the pricing levels get driven and then how do you make money? In volume?
By John Marcian on Nov 17, 2006
I've been heavy into VDP for ten years. In the beginning, I skimmed the market based on value. Rising competition has eroded that model significantly. I've continued to pushed the envelope in terms of programming in order to keep the value high. Unfortunately, there aren't many buyers out there that have the data to drive the level of programming that I'm able to provide. You both are correct, merely selling machine time creates a commodity type pricing. Selling advanced coding and creativity is the value. Finding buyers that can see the vision and can mine their data is challenging.
By Michael Josefowicz on Nov 22, 2006
I don't think there is a plausible alternative to cost plus pricing. Printers are manufacturers.. They want to be something else and a couple are. But denying reality is not a strategy to win. My bet is that the winning approach is to concentrate on being the most efficient producer so that in market place you have the lowest cost..and the biggest spread to the price. And locate experts who can be network partners to deliver solutions that releave a customer's pain.
By Vaughn Fisher on Nov 28, 2006
The price for a VDP project must always be less than the benefit to the customer. Pay attention to your costs but they do not determine the price to the customer. I have been involved in VDP for many years and learned that you cannot price a VDP project like a manufactured printed piece. Bundle the cost together. The margin is in the programming and creative elements, not in manufacturing. Any manufacturer will drive out their costs and the price, but if you provide creative solutions, your price is determined by the benefit.
Discussion
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