Are You Late….. Raising Prices….?

Published Articles
Published in

American Printer

on Tuesday, April 25, 2017

By Sid Chadwick, Chadwick Consulting, Inc.

“Let fear be a counselor, and not a jailor.”…….Anthony Robbins

About half a dozen clients over the last six or so months --- have provided themes of recognizable evidence --- that they were selling at prices --- “below market”--- while print demand --- is increasing.

ObservationsFactual --- and circumstantial evidence --- of “below market pricing” was represented by some combination of the following:

  • An increasing number of customers did not require a quote --- before sending their supplier the work they wanted produced.
  • Sales Reps were winning a steadily increasing percentage of work --- that provides “bonus commissions”.
  • Your Quote Hit-Ratios --- are higher than the previous three to four years."Some were as high as 60%+."
  • Your company is increasingly running on weekends, but profitability does not seem to increase. In fact, profitability seemed --- too often --- to be slowly slipping.) "A few clients are running every weekend --- and barely making a profit of any substance. (Guess why...!)"
  • On Customer Surveys, there are almost no criticism of “Competitive Pricing”.
  • Growing customer demand seems to be calling for additional investments in equipment--- to keep up with serving demand, but profitability does not justify the investments.
  • You "track" the number and percentage of ‘last looks’ from buyers that your Sales Reps receive --- and it seems to be steadily increasing --- for winning more work.
  • Employees have not received meaningful pay increases in several years. This condition is especially true for your most valuable employees.  Over recent months, you’ve watched valuable employees leave your company --- maybe even leave the industry --- for better paying positions, with better benefits. Yet, your lack of profitability won’t stand much of a pay increase for your valuable employees. Previous benefit levels have not been returned.
  • Generally speaking, alterations, storage, and lots of other “extras” --- tend to be “freebees” --- that aren’t even shown on the invoice for their value --- that wasn’t charged. (It all adds-up.)
  • You aren’t paying yourself properly…and/or….You aren’t charging the going rate for rent, though you do own the building.

dollar sign

Suggestions for correcting this unhealthy condition…?

  • Raise pricing 3-5% --- immediately, and track carefully if you start to lose --- or continue to win --- customers work.
  • As you probably won’t experience any radical change in work booked, raise pricing another 3-5% --- after 60 – 90 days.
  • Repeat “one” and “two” --- until real resistance is experienced.
  • Begin examining profitability of all jobs --- and notifying customers of modest price increases on specific future work --- as you identify specific jobs and margins that are not healthy for your organization.
  • If you’re working six and seven days a week, work to lose your lowest margined customers --- let’s say 10% of your revenues --- and especially those with low margins, and who are slow to pay their account with you. On accomplishing this, your company is most likely more stable, and more valuable.

We get “sucked-into” fear of losing a valuable customer, who is tough on pricing from suppliers --- though they expect the best of all that you can provide. That pattern too often --- becomes habit --- for all customers.

What are your objectives of where do you want to be in six months --- in terms of improved profitability, and improved morale of your employees….?

Improved clarity of our objectives --- seems to always assist with developing a written plan --- that supports those objectives. 

“He who desires but acts not, breeds pestilence”…….William Blake