Printing Industy Blog
Value-Based Selling and Pricing - It's All About the Numbers!
By David Dodd
Published: May 13, 2010
For the past several years, printing company managers have been urged to practice a value-based approach to selling and pricing. Value-based selling and pricing are particularly important for companies that provide more complex offerings such as personalized direct marketing campaigns and online collateral management systems or other web-to-print solutions.
Purchasing these kinds of solutions often requires the buyer to make a significant change from the status quo. Therefore, demonstrating the value of the proposed solution can be critical to closing the sale. Unfortunately, many printing companies are not quantifying the value that their solutions will deliver. Over the past several months, I've reviewed numerous sales proposals for direct marketing campaigns and web-to-print solutions and not one of these proposals contained a quantitative estimate of value or an ROI calculation.
I often hear managers say they're having difficulty selling marketing services and/or web-to-print solutions, and I've read similar comments on several online discussion forums. I strongly suspect that one of the primary causes of these difficulties is the failure to provide potential buyers with compelling value estimates.
It's also important to use value-based pricing when you are selling more complex offerings. If you use cost-plus pricing for things like marketing services and web-to-print solutions, you will often leave a significant number of revenue and profit dollars on the table because the "hard" costs of the time and materials required to produce the solution don't reflect the value that the buyer will obtain by purchasing that solution. But you can't price based on value if you don't know how much value your solution will actually create for a customer.
The bottom line is that you can't practice real value-based selling and pricing until you quantify the value that your solution will produce for a prospective buyer. Qualitative descriptions of value - phrases like "Our personalized marketing campaign will produce higher response rates" or "Our online collateral management system will lower your cost of processing requests for collateral materials" - are important and useful in the marketing/sales process, but they are no substitute for a quantitative estimate of value and ROI.