Printers say “Price.” Customers say “Value.”
Hardly a day goes by that I don’t have a conversation with a printing company owner/CEO. Invariably, we talk about the current state of business and when I ask how business is, the conversation centers on price competition.
Adjectives like brutal, illogical, unreasonable, and insane are used to describe the current state of determining pricing in a hypercompetitive marketplace. This phenomenon is not exclusive to a specific region, nor is it reflective of a certain size of company. While no one can deny the reality of overcapacity and its effect on pricing, I wonder if we are missing something here.
Beginning in 1993, a company called eKG Research™ has been surveying printing customers for many of the best companies in our industry. The eKG Research™ approach is unique. It uses a 22-question survey comprising 16 standard questions and six customized to the specific printing company’s interests. That means that over the past 17 years, thousands of print customers of hundreds of printing companies have answered the very same questions. Not surprisingly, one of the standard 16 questions deals with price.
The survey instrument goes beyond simply attempting to gauge how satisfied a printer’s customers are (satisfaction alone is not a predictor of loyalty), but also asks how its customers rate their satisfaction compared with its competitors and how important each item is to its customers. This three dimensional view (satisfaction, competitiveness and importance) roll up into what is termed the QCI™ or Quality Competitive Index™.
A few years ago, NAPL acquired eKG Research™ and the survey product was recently renamed the NAPL Competitive Index Profile™. While we are excited to have this survey product (it is the best I have ever seen), we are even more encouraged by owning this rich database of thousands of responses. A high-level analysis provides some interesting patterns. One has to do with price.
In looking at the issues print customers rate as most important, sure enough, price consistently ranks in the top five—but it is never number one. In fact, it is rarely in the top three. What are the other items in the top five? Reliability (product quality and on-time delivery) for sure. But the consistently highest-rated factors are “understands my business” and “offers ideas and suggestions I can use.” These are closely followed by “easily accessible” and “responsive.”
Time and again, the best customers of the best companies tell us that while price and quality matter, these are trumped by a demonstrated genuine interest in them, their business, and what it is they are trying to accomplish. Absent those factors, and if quality is considered a constant, there is only one thing left to talk about—price.
There is a lesson here and a significant opportunity. And it begins with a question: How much do you know about your customers’ businesses, their objectives, and what it is they are trying to accomplish? The very act of trying to find out may just set you apart from the competition.