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Commentary & Analysis

The Commodity Conversation: Who Are We Kidding?

The buying criteria within the printing industry are no different than any other—they come down to quality, service, and price. This article provides a brief overview of these three key buying criteria and explores how print service providers can shift away from a commodity conversation while still respecting customers’ inherent preferences.

By Keypoint Intelligence
Published: June 20, 2019

The buying criteria within the printing industry are no different than any other—they come down to quality, service, and price. This article provides a brief overview of these three key buying criteria and explores how print service providers can shift away from a commodity conversation while still respecting customers’ inherent preferences.

  • In our industry, true quality is driven by the total benefits and return on investment (ROI) that a product delivers to the buyer.
  • PSPs must assess their customers to truly understand their business needs, then develop a strategy to help them achieve those needs. Choosing the right substrate types, finishing options (including laser/die cutting), digital technologies and channels (e.g., NFCs, augmented reality), and design/copy creation (with personalization when relevant) will increase the chance of success.
  • Good service relies upon providing what customers need, when and where they need it.
  • Regardless of price, the product that delivers the highest ROI is ultimately the best and cheapest option for the print buyer.

By German Sacristan

Introduction

Much can be said about market trends, but the truth is that these trends are always connected to print buyers’ purchasing criteria. When it comes to buying criteria, those in the printing industry are no different from any other industry—they come down to quality, service, and price. Many printing professionals say that we need to move away from a “commodity conversation” that focuses on quality, service, and price, but how can we change the conversation when customers’ buying criteria are inherently tied to these attributes? This article provides a brief overview of the three key buying criteria and explores how print service providers can shift the conversation while still respecting customers’ inherent preferences.

Key Buying Criteria

Quality

Although quality is often perceived as a commodity, it is actually something more. Quality is a key area where we can truly differentiate ourselves from our competitors—but first, we must understand the broader meaning of quality. When talking about quality, we’re often referring to technical print quality—yet the overall quality of a printed product involves much more than technical print quality. In our industry, true quality is driven by the total benefits and return on investment (ROI) that a product delivers to the buyer. As a print service provider (PSP), you must be able to identify the benefits and ROI that your offerings bring to your customers.

All commercial printing products have the same goal—to sell something to someone. PSPs often focus on selling print products to their customers, yet customers are focused on using print products to sell their own offerings. Shouldn’t PSPs’ offerings be more aligned to what their customers need and sell? Rather than selling print, maybe we should really shift our focus to what our customers are selling (e.g., retail, finance, automotive, charity). The next time you’re in front of a customer, think of their company as your company and determine what you need to know to serve them best. You’ll find that you start asking different questions, and the customer will be more engaged in the conversation because it will be more closely linked to their job responsibilities and overall success. If you find it difficult to engage a particular prospect with this approach, consider the possibility that you might be talking to the wrong person within that company—or maybe you are not yet skilled enough to have those conversations.

PSPs often fall into the trap of asking questions that focus on the print specifications (print quality, paper size and weight, number of pages, etc.) of their customers’ existing print investments. Instead of doing this, we can avoid the commodity conversation by asking about the objectives of a purchase. What is the customer trying to achieve through the investment? With this opening, PSPs can help their customers do a better job serving their own clients—and this is ultimately what they want to do!

Sensitivity and practice are key when shifting the focus of the quality conversation. Start by determining if you are ready and capable of having this type of conversation with your customers and which of your customers might be open for this type of interaction.  Start practicing with a select few, then scale it to others. Ultimately, you’ll need to translate your customers’ objectives into strategic marketing and production specifications. If you take the time to identify the right customers and to better understand their businesses and job responsibilities, your meetings and conversations will be richer because of the quality of information that you’ll gather. This information will enable a better alignment with your customer and also provide more value. This will in turn enable you to improve the quality of the products that you sell while also differentiating yourself and your company from the competition.

To establish this type of relationship, PSPs must also ask their customers about the results and their overall satisfaction throughout the engagement. This ongoing dialogue is essential to becoming a proactive partner that can help the customer achieve business growth.

PSPs must assess their customers to truly understand their business needs, then work on the strategy to help them achieve those needs. Choosing the right substrate types, finishing options (including laser/die cutting), digital technologies and channels (e.g., NFCs, augmented reality), and design/copy creation (with personalization when relevant) will increase the chance of success.

Service

When having a conversation about service as well as quality, it’s important to shift the focus to ROI. PSPs should start by assessing their own unique capabilities. Good service relies upon providing what customers need, when and where they need it.

  • What can you do for your customers that other providers can’t, and which of your capabilities—technical and human—are superior to those of your competitors? You must understand what your customers need in terms of quality (previously discussed) and quantity (run lengths), while also having the right technologies and people to fulfill these requirements.
  • When relates to timing. Timing really is everything, and the right technologies and partnerships can help PSPs fulfill customers’ needs with the right timing.
  • The where is obvious, and partnerships and technologies are important here as well.

Price

The price battle drives PSPs out of business each and every year, and the only way to shift the conversation from price is to add differentiation. At the same time, however, this differentiation can’t be random—it must relate to the customer’s other core buying criteria (i.e., quality and service).

Differentiating with service can be difficult because competitors can easily duplicate it. Meanwhile, differentiating with quality—and not just print quality—creates more potential for differentiation and has a better chance of aligning with the customer’s ultimate goals. Nevertheless, it is important to remember that the quality of a product is not enough on its own—without excellent service, even the best quality product will not live up to its full potential.

It is also important to understand that a low-quality, low-cost product might ultimately be more expensive than a high-quality product with a higher price. Regardless of price, the product that delivers the highest ROI is ultimately the best and cheapest option for the print buyer. A good friend of mine is fond of saying, “We’ll lose on price if we sell on price!” For PSPs hoping to avoid price-driven battles, these are words to live by.

The Bottom Line

Although PSPs can’t ignore customers’ core buying criteria of quality, service, and price, they can shift the focus away from these commodities by focusing on benefits and ROI. By creating market differentiation with outstanding quality and service, PSPs can eliminate price-driven battles and create a sustainable business that stands apart from the competition and delivers greater profits.

German Sacristan is the Director of Keypoint Intelligence – InfoTrends’ Production Print & Media group. In this role, he supports customers with strategic go-to-market advice related to production printing in graphic arts and similar industry segments. His responsibilities include conducting market research, forecasts, custom consulting and development of analyses, editorial content on technology, as well as supporting clients in the areas of production digital printing.

Keypoint Intelligence is a brand built upon two great companies, Buyers Lab and InfoTrends. We are a collective force of unrivalled capabilities trusted all over the world to provide true end-to-end solutions and services which include in-depth product information, game changing insights, and responsive web tools that drive business growth.

 

Discussion

By Hamilton Costa on Jun 20, 2019

Hi German, good points. Good advices to many PSPs as they need to change their mindset and refocus their commercial approach.

 

By Robert Lindgren on Jun 20, 2019

Great article! It's key insight is the importance of understanding what the buyer wants to accomplish with the printed product and not just the mechanical specs. Only with this focus can the conversation move from price to value.

 

By Thayer Long on Jun 20, 2019

Every industry commoditizes at some point during it's life-cycle. Successful companies are those who can do something that others cannot. They diverge away from what the herd is doing, and innovate. They are unique.

 

By Gordon Pritchard on Jun 20, 2019

Print isn’t becoming a commodity - it already is.

Print commoditization began with the acceptance of linear film as the file-interchange standard between prepress tradeshops and their clients.
Standardization of the “press characteristic” – process hue sets, solid ink densities, dot gain, print contrast, etc. embodied in the ISO specifications – completed the industry commoditization of print.

Regarding Quality.

Most printers define themselves as “quality” printers – but often draw a blank when trying to describe specifically what that means. Dictionaries define “quality” as a “distinguishing attribute” or “inherent feature.” So, one might say that a quality printer is simply one that has the attribute of being distinct. Or putting it another way, given that quality is concerned with meeting customer expectations, quality printers distinguish themselves by meeting customer – rather than supplier – expectations.

The first step in becoming a "quality" print supplier is to eliminate the use of the term "quality" by everyone in the organization. "Quality" by itself is a meaningless, overused, vague term. Eliminating the use of that descriptive forces the organization to think in terms that are specific, measurable, attributes of their offerings. That, in turn, will help the shop confirm whether those attributes align with customer needs or not.

 

By Chris Lynn on Jun 22, 2019

Quality is classically defined as "conformance to customer requirements" so I don't like German's definition of quality as "total benefits and return on investment (ROI)". If you accept the classical definition, it means that 'quality' represents the table stakes and is not a differentiator.

I tell clients to think deeply about what constitutes "superior value" for each group of customers, and how to organize themselves to deliver it. This takes work, but once this is clearly understood, how to price for that value delivered becomes clearer.

 

By robert godwin on Jun 25, 2019

80% of print is commodity and most of that falls to online ordering with customer uploads files.
The remaining 20% is custom meaning the requestor needs help on costs or engineering, logistics etc.

As for quality, much of the innovation has lead to ‘good enough’; perfection being the enemy of both good and efficient.
Quality in the commodity world infers reliability, if the results are acceptable and consistent order after order, that’s ‘good enough’

 

By Robert Lindgren on Jun 25, 2019

Without doubt, "quality" is defined by the buyer not the producer. However, the producer may change this by offering something that the buyer likes, but hadn't realized was possible (printing on unique substrates, VDP, etc. are examples of this).

The underlying reality is that enterprise profit is maximized by fully utilizing the productive capacity in place at the highest price levels that are obtainable.

 

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