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Why Discounting Is The Route To Failed Print Sales

3 reasons why price discounting doesn’t work

Matthew Parker ,

Let me tell you about Sean

Sean is very fussy about his coffee. He knows what he likes. He only likes the best. Sean makes sure that he gets premium coffee.

But he never pays full price for it.

Sean buys his coffee from a specialist coffee merchant. It’s the type of company where you expect to pay more for the service and products that they provide. If you look at their price list, you’ll see why only coffee connoisseurs shop there.

So why is Sean paying substantially less than standard prices?

The issue lies with discounting

Every 2 to 3 months the coffee merchant runs a special offer. The first time it happens, Sean was pleasantly surprised. But then he got wise to their ways.

Now he just waits for each special offer and then buys his coffee in bulk. The coffee merchant meant the sales offer to expand their client base. They hoped that the reduced prices would encourage customers to try new lines.

But all these sales and discounts have achieved is to reduce their profit margins.

Printing companies face a similar problem

Price discounting is seen as a valid strategy to win new customers. It is also used to fill presses at short notice.

It’s a very common strategy. Every week I received emails from printers trying to win me over with special offers. It’s great news for me as the buyer. But it’s not so good for the company.

Here are three reasons why price discounting doesn’t work.

Buyers see discount prices as the standard price

It doesn’t matter how much a print price is branded as a special offer. Buyers will always expect a special price to set a new standard. They will rarely accept a price increase unless there has been an increase in raw material costs.

However, if you suddenly start offering discount prices it may change their view of you as a supplier.

Buyers see discount prices as a sign of commodity selling

If you are selling on discount prices then buyers will simply assume that you are a provider of cheap print. Discounting your prices simply distracts buyers from any value elements of your sales message.

It encourages them to treat you in exactly the way that you don’t want to be treated.

Buyers use you drive competitors’ prices down

Many times buyers may not have any intention of using you, despite your special offer. However, they will be very happy to use up your valuable estimating and quoting time. They will use it to try and get other prices to beat up their current suppliers with.

Even if a buyer does go with your special offer, you can be sure they will move to a new supplier just as soon as they find a cheaper price.

So what’s the alternative?

If you want to create a special offer to attract a buyer, it is still possible to stay away from price. Why not offer something of value instead?

You could offer buyers a design review, a data report or a postal review. The buyer may benefit far more from such a service. It may be worth a lot more than a slightly cheaper price.

This strategy also has another benefit. It demonstrates other value-added services that you offer.

If you do go down this route, it is important to remember one thing.

Always remember to price your value-added offering

If you are offering an extra service, make sure your customers know what it is worth. That way, they will find it easier to understand the value of what you are offering.

It will also be easier for you to charge for it next time.

Here are three action points to get you started

1 - Review your policy of price discounting

2 - Develop two or three value-added offerings

3 - Make sure price is attached to these offerings

It’s time to stop offering discounts. Otherwise you’ll just end up slashing your profit margins, just like the coffee merchant.

Matthew Parker

Matthew Parker

Founding director of Profitable Print Relationships

Matthew Parker
Runs www.profitableprintrelationships.com After many years of print buying (when he received over 1,400 sales pitches from print companies) he is now sharing the buyer’s point of view with the print industry.
Matthew is training the sales and customer service staff of many leading printers.
He also speaks at many print industry events.
Download his free e-book “Ten Common Print Selling Errors and What To Do About Them” now at:  profitableprintrelationships.com/e-book/

matthew.parker@printandprocure | www.profitableprintrelationships.com

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