-
I want to thank all the members that have upgraded your accounts. I truly appreciate your support of the site monetarily. Supporting the site keeps this site up and running as a lot of work daily goes on behind the scenes. Click to Support Signs101 ...
Price vs Value Add
- Thread starter sjm
- Start date
sjm
New Member
Sales is 99% perception and 1% execution. Wal*Mart is a poor example as they do not add value as they deal with commodity products, which is purely price driven.
Though I suppose if you could get Wal*Mart prices but it would be delivered to your door for example for that same price then the value add is obvious.
Much like spending those few extra minutes in prepping/correcting a client's file unless they are made aware of the extra time care you put into their job they simply do not recognize the value add.
GypsyGraphics
New Member
I apologize in advance for this long response to the brief question of “Price vs Value Add.”
I find it interesting that there are several active threads going concurrently that are seemingly not connected, but at the core come down to the basic question regarding “value add.”
One thread in particular is ronl1975’s, “Would this p!$$ you off?” Where the perceived value of his service, was exactly as he delivered it to his friend/customer… which was COST. The problem was not a discrepancy in the “perceived value” the value was exactly as Ron presented it to his friend/client, ZERO.
Are you viewed by your clients as an expense to be managed or are you a value added provider? Or maybe it is more accurate to ask if you are the “value realized” provider.
It’s an unfortunate fact that most clients put the value on the end product and not the talent, time spent or services necessary to bring about the end product.
The vendor who put the free business cards or cheap cards in the hands of ronl1975’s client is the one who was perceived as the “value provider” and consequently “value realized” by the client. Now not only is Ron’s value zero but the value of the end product is next to nothing. That’s a pretty tough concept to change in the eyes of the client.
While seemingly unrelated, charging by the hour, I think, is a huge factor in relaying an inaccurate “perceived value” to clients. The fact that I can do something in an hour does not mean its value is equivalent to my hourly rate. Let’s says for example, my hourly rate is $100 and I’m able to create the clients ad in an hour. If I charge the client for 1 hour, then they will have received that service at COST. My cost for that ad was 1 hours time… the “value add” is ME… I decide what my value is and it sure as hell ain’t ZERO! That ad will cost the client what I believe to be commensurate to “value realized” by the client. NO ONE gets and ad from me for $100… NO ONE, because I have determined the value of the ad to be much greater than the time spent to create it.
I find it interesting that there are several active threads going concurrently that are seemingly not connected, but at the core come down to the basic question regarding “value add.”
One thread in particular is ronl1975’s, “Would this p!$$ you off?” Where the perceived value of his service, was exactly as he delivered it to his friend/customer… which was COST. The problem was not a discrepancy in the “perceived value” the value was exactly as Ron presented it to his friend/client, ZERO.
Are you viewed by your clients as an expense to be managed or are you a value added provider? Or maybe it is more accurate to ask if you are the “value realized” provider.
It’s an unfortunate fact that most clients put the value on the end product and not the talent, time spent or services necessary to bring about the end product.
The vendor who put the free business cards or cheap cards in the hands of ronl1975’s client is the one who was perceived as the “value provider” and consequently “value realized” by the client. Now not only is Ron’s value zero but the value of the end product is next to nothing. That’s a pretty tough concept to change in the eyes of the client.
While seemingly unrelated, charging by the hour, I think, is a huge factor in relaying an inaccurate “perceived value” to clients. The fact that I can do something in an hour does not mean its value is equivalent to my hourly rate. Let’s says for example, my hourly rate is $100 and I’m able to create the clients ad in an hour. If I charge the client for 1 hour, then they will have received that service at COST. My cost for that ad was 1 hours time… the “value add” is ME… I decide what my value is and it sure as hell ain’t ZERO! That ad will cost the client what I believe to be commensurate to “value realized” by the client. NO ONE gets and ad from me for $100… NO ONE, because I have determined the value of the ad to be much greater than the time spent to create it.
DRamm76
New Member
A while back, I had a customer come to me and took up four hours of my day running around my shop pointing to things, saying “I want this, and I want that” So I did demonstrations on each and every piece of equipment I had in my showroom. I carefully explained what each one does, the good points, the bad points and how each machine can help him be successful. I take pride in what I do. I don’t play the “well this is the (model) and here is the price...you want it?” game.
I gave the customer a price and when he saw that we are charging for training and support, he proceeds to question me and tell me he doesn’t need it. WOW. So let me get this straight. I have been doing this for 13 years, and I’m still learning each and every day but you wake up one morning and decide you want to open a business and you don’t need any training or support. I’ll just leave it at that.
Here’s the cold hard facts: When you pay a dealer in this industry for support, you are paying for their time to help you be successful and keep you running smoothly. Whether you like it or not, this is a whole new era, and the days of “I want the best price and best support at the same time” doesn’t exist. Period. The money you pay for training covers our time that we AREN’T selling to help you out. Now if we get a guy who chooses to nickel and dime a sales rep, when the time comes for him to need support, the last thing we’ll want to do is help because we need to focus on our next sale. Simple reality. Ever hear of “you scratch my back, I’ll scratch yours”?
The advantage of Value Add comes in AFTER the sale. You want to build a relationship with a company that is going to HELP you. There is a printer involved in the purchase but what you're doing is investing in a company to help you be successful.
People want to get bottom dollar price all the time and they want their sales rep to be for them 24/7 to help them make money. The whole "customer always right" theory got taken to a whole new level and got taken advantage of..Here's the problem with this..
When you beat up a sales men on price OR if you get beaten up on price yourself, the customer may be initially thinking "wow..i got myself a great deal" but did they? When you go and call your sales rep and need help I can prob guess you'll be the guy saying "I can't get my rep on the phone after the sale" Yeah and here's why? Because when a rep makes little or no money in a deal, they need to focus on the next deal. That's nature of the beast.
I'm not going to go into a whole list of all the value add we provide, because I'm not a Merchant Member and I'm not here to sell. But with my customers, I offer them so much more than just a great price, that when they see that price, AND they see the Value Add..there's never an issue, and if there is, then we know right away that maybe we weren't meant to do business with that customer.
Here's my final take on this..
Supplies...Substrates..Tools..Accessories..Consumables..Buy on Price..
Equipment is an INVESTMENT..buy on Value Add
I can tell you from past experiences those who "get it" are the ones who are more successful than others.
I gave the customer a price and when he saw that we are charging for training and support, he proceeds to question me and tell me he doesn’t need it. WOW. So let me get this straight. I have been doing this for 13 years, and I’m still learning each and every day but you wake up one morning and decide you want to open a business and you don’t need any training or support. I’ll just leave it at that.
Here’s the cold hard facts: When you pay a dealer in this industry for support, you are paying for their time to help you be successful and keep you running smoothly. Whether you like it or not, this is a whole new era, and the days of “I want the best price and best support at the same time” doesn’t exist. Period. The money you pay for training covers our time that we AREN’T selling to help you out. Now if we get a guy who chooses to nickel and dime a sales rep, when the time comes for him to need support, the last thing we’ll want to do is help because we need to focus on our next sale. Simple reality. Ever hear of “you scratch my back, I’ll scratch yours”?
The advantage of Value Add comes in AFTER the sale. You want to build a relationship with a company that is going to HELP you. There is a printer involved in the purchase but what you're doing is investing in a company to help you be successful.
People want to get bottom dollar price all the time and they want their sales rep to be for them 24/7 to help them make money. The whole "customer always right" theory got taken to a whole new level and got taken advantage of..Here's the problem with this..
When you beat up a sales men on price OR if you get beaten up on price yourself, the customer may be initially thinking "wow..i got myself a great deal" but did they? When you go and call your sales rep and need help I can prob guess you'll be the guy saying "I can't get my rep on the phone after the sale" Yeah and here's why? Because when a rep makes little or no money in a deal, they need to focus on the next deal. That's nature of the beast.
I'm not going to go into a whole list of all the value add we provide, because I'm not a Merchant Member and I'm not here to sell. But with my customers, I offer them so much more than just a great price, that when they see that price, AND they see the Value Add..there's never an issue, and if there is, then we know right away that maybe we weren't meant to do business with that customer.
Here's my final take on this..
Supplies...Substrates..Tools..Accessories..Consumables..Buy on Price..
Equipment is an INVESTMENT..buy on Value Add
I can tell you from past experiences those who "get it" are the ones who are more successful than others.
sjm
New Member
GypsyGraphics the value add is as you say "me", that's what I think differentiates a mover from a me too.
I think the fact that one can do something in an hour where it would take some one else days is a value add.
Deadlines are tight today and everyone wants things yesterday ... don't sell yourself short because you bring real value to the table.
CES020
New Member
Daniel, I agree with you, however, the opposite is true too! When you (not you, specifically) sell me the machine for $30,000 and promise all this after care and you can't solve my issues or don't bother to even pick up the phone for a courtesy call once a quarter, then next time, I probably will buy on price. That seems to be the trend. It's not cheap people driving this thing, it's poor service that's driving customers to look for the lowest price because they know that no matter what's promised, it's probably not true. I have a piece of equipment I bought from a very large supplier that frequents this forum. That was 2 years ago. To this day, I've not heard a word from him. I've left messages for him several times and he can't even be bothered to call me back. Think I'll pay more from him next time I need something, or will I shop around? Don't blame this on the customers, it's a supplier problem, not a customer problem (I'm speaking solely when buying equipment).
anotherdog
New Member
This thread is pulling at something that has been bugging me for a while.
In this discount world how do I let my customers know the incredible deal they are getting from me?
I'm not griping about them screwing down my prices, I'm pretty clearly quality and service rather than cheapest. Most of my customers respect this and like/need the level of service we provide.
I'll admit though the "candy" in the deal for many of my jobs is design costs. Either heavily discounted or free (massaged into the print cost). I have a lot of years experience as an art director and graphic designer. I should be charging top dollar, but I have grown the business by selling this product cheap. Untill I hire a graphic designer I probably still won't fully change for this, but how do I let my customers know how much value I have added?
Should I add a line to my invoices design costs then a line discounting so they know the value of the time? I'm sure this would be particularly eybrow-raising for the local library that is into the 8th proof on one of its booklets.
In this discount world how do I let my customers know the incredible deal they are getting from me?
I'm not griping about them screwing down my prices, I'm pretty clearly quality and service rather than cheapest. Most of my customers respect this and like/need the level of service we provide.
I'll admit though the "candy" in the deal for many of my jobs is design costs. Either heavily discounted or free (massaged into the print cost). I have a lot of years experience as an art director and graphic designer. I should be charging top dollar, but I have grown the business by selling this product cheap. Untill I hire a graphic designer I probably still won't fully change for this, but how do I let my customers know how much value I have added?
Should I add a line to my invoices design costs then a line discounting so they know the value of the time? I'm sure this would be particularly eybrow-raising for the local library that is into the 8th proof on one of its booklets.
sjm
New Member
DRamm76, point well made. Ask lots of questions and be weary of what sounds like a great deal. In the end it generally is not.
I read through this board and come across some merchant members offering a similar substrate for $20 less than I currently purchase for.
I have to ask myself for $20 less, am I willing to risk my reputation switching to a new product when the one I am using works very well?
Before I get attacked by merchant members, Valued Added Reseller means something to me.
SignBurst PCs
New Member
Value Add is a concept that most small businesses struggle with. It is also one of the most important concepts that a small business owner should come to grips with. We (small business owners), as a whole, have to provide a better value to our customers in order to compete with the "BIG" companies out there that are selling on price.
I, for example, cannot compete with the large retailers on computer prices, nor should I want to. Large retailers sell computers with cheap hardware in order to save $$$. It is the nature of their business model. They offset that with "customer support and warranties". This may be acceptable to some folks who don't rely on their computers to make a living, but from my point of view, I want to sell a computer with higher quality components with a more thoughtful approach to the sale in order to require less customer support and warranties. The longer the computer goes without issue, the less time I have to spend on support call time. That is my business model.
The two models both work. My (small business oriented) model will most likely always keep me a small business while theirs will keep them a HUGE business. I am OK with that.
I see the same struggle in sign and wrap shops. "Should I use cheap materials, less experienced staff, and lower my prices in exchange for volume? Or, should I use quality materials and experienced staff in order to put out a better product?"
Thankfully, I see a lot more of the second.
I, for example, cannot compete with the large retailers on computer prices, nor should I want to. Large retailers sell computers with cheap hardware in order to save $$$. It is the nature of their business model. They offset that with "customer support and warranties". This may be acceptable to some folks who don't rely on their computers to make a living, but from my point of view, I want to sell a computer with higher quality components with a more thoughtful approach to the sale in order to require less customer support and warranties. The longer the computer goes without issue, the less time I have to spend on support call time. That is my business model.
The two models both work. My (small business oriented) model will most likely always keep me a small business while theirs will keep them a HUGE business. I am OK with that.
I see the same struggle in sign and wrap shops. "Should I use cheap materials, less experienced staff, and lower my prices in exchange for volume? Or, should I use quality materials and experienced staff in order to put out a better product?"
Thankfully, I see a lot more of the second.
jiarby
New Member
Price objections are really just customers challenging your value proposition. "adding Value" is a technique you can use to increase the perception of value to the customer until they buy.
Realize that when a customer comes in and wants a 3x8 banner that they DONT REALLY want to buy a banner.... but that it is what they think they HAVE TO DO to solve some business problem they are having. They need to increase visibility, increase sales, drive traffic, whatever....
You can add value by identifying and helping the customer solve his REAL problem.
Realize that when a customer comes in and wants a 3x8 banner that they DONT REALLY want to buy a banner.... but that it is what they think they HAVE TO DO to solve some business problem they are having. They need to increase visibility, increase sales, drive traffic, whatever....
You can add value by identifying and helping the customer solve his REAL problem.
Last edited:
Jon Aston
New Member
jiarby
New Member
If you want to get paid then you need to add the line BUT NOT discount it!
Build the cost of art into your prices, or set up a tiered system... If they prvide "Ready Art" it is the base price... If you have to modify their art they get a middle price. If you have to design from scratch then it is a separate cost.
You have to communicate that up front, not after you have done 8 revisions. If you do not charge for it how can the customer value it? They think it has no value at all.
OldPaint
New Member
looking at this from an old "brush swingers" view, when we had the total market to ourselfs, even the "lowballers" was still making a good profit. as it was, then most of us had to establish a reputation and a quality of work, that in turn would make our VALUE ADD to the equation. then what we charged, was never an issue, because those who would call us, knew of our work. if you call mike lavelee, you know what you will get, and cost is not what you are looking for.
to me it still is the only viable way to make it in in this business. as ive seen with the advent of the vinyl cutter and now the printer, there are a lot people in this business without any of what i said above. and jumping in here, without any prior workings of this type leave you with only one option to garner any business from established value add type business and that is PRICE. also with the quantity of "printer only" shops, its really hard to say which one will do the best job, and paying more money is not a gauge to the finished product. most people dont care if you got a roland, edge, or any other printer.
to me it still is the only viable way to make it in in this business. as ive seen with the advent of the vinyl cutter and now the printer, there are a lot people in this business without any of what i said above. and jumping in here, without any prior workings of this type leave you with only one option to garner any business from established value add type business and that is PRICE. also with the quantity of "printer only" shops, its really hard to say which one will do the best job, and paying more money is not a gauge to the finished product. most people dont care if you got a roland, edge, or any other printer.
Alphonse43
New Member
Quality is remembered long after the price is forgotten.
Alphonse43
Alphonse43
sjm
New Member
The average banner takes no more than 30 minutes to create. Use that as a loss leader to hold your price per square foot firm. The client see's that as a value add while he/she recommends your service. It's a win-win for all.
DRamm76
New Member
I agree 100%!!! This entire thought process is derived from the dealers themselves..I have a harder time selling a second machine to an existing customer than a new customer their first because chances are the existing customer has been let down already!
I don't take offense to that at all. I am not blaming it on the customer per say, but more so a message to everyone to provide BETTER service all around and price won't be so much of an issue..Excellent addition to this discussion!