Selling Value: Is It In the Questions or Having the Right Answers?
By John Kaufman
Segment Marketing Manager
Ricoh Americas Corp.
What is Value?
One of the main benefits to digital printing (besides producing short runs) is the ability to personalize the print to speak directly to a customer. The intent is to give a unique, targeted experience to each individual, trip their purchase switch and encourage them to respond to the offer. Media can come in many forms, including catalogues, billing statements, reminder postcards, financial statements, insurance letters and even custom books. Personalized campaigns deliver higher response rates and therefore, higher marketing ROI.
Caslon suggests that relevancy and offers are more vital to campaign success than creative design and copyrighting. The percentage break-down is as follows:
- Relevance of content to the recipient: 40%
- Quality of the offer, and its interest to the recipient: 40%
- Quality of creative design and copywriting: 20%
This information illustrates why your sales efforts need be focused on senior marketing and sales executives rather than print buyers. Print buyers are looking to save their company money and are motivated to get the price as low as possible. Marketing and sales executives are focused on driving new business opportunities and offering new services to differentiate themselves from their competition. Therefore, they will be more likely to invest in VDP campaigns.
Who does the listening when you sell value?
Ultimately it is you. You want to stay away from the purchasing agents and print buyers. They are generally focused on price and not on ROI. When you are talking about value, you need to speak to someone who is not focused on price. You need to speak to someone like the sales or marketing directors. They can deliver the information you need to build your value model and delver information more relevant to their business needs. When you have the initial meeting you need to ask strategic and tactical questions about their business. This data harvesting will allow you to gain key information about their business challenges, goals and core focus. When selling on value you should never talk about output quality, price per piece, or technical issues. Instead gather the relevant information needed to build your value model. The most profitable campaigns are sold on the basis of value to the customer, not on price per piece. In pricing for value, the revenue per dollar spent is the number that drives the sale, not the manufacturing cost per piece.
Below are examples of questions that will help you uncover business and campaign-specific information.
Strategic Questions:
- What are your strategic marketing goals this year?
- What challenges have you faced in achieving your goals?
- What is your typical sales cycle?
- What is your typical deal size?
- How many sales people you have in your organization?
- What is each sales person’s annual quota?
Tactical Questions:
- What integrated campaigns are you planning?
- Who are you targeting?
- How many DM pieces will be sent?
- What type of data do you have on your customers?
- What are your historic response rates from similar campaigns?
- What are your historic conversion rates from similar campaigns?
- How much have past campaigns cost?
- How much does the product/service cost?
Answers to these questions will generate the information that you will use when developing the value model for your customer. You need to capture these answers as accurately and extensively as possible to build an accurate value model.
Calculating your services
Personalized campaigns require you to look at pricing differently than your standard direct mail piece. Instead of the usual costs like lists, printing and mailing you must take into consideration all the services involved. These services may include:
- Project manager
- Campaign outline and brief
- Software and software license fees
- More creative involved in copywriting and dynamic layouts, and web design
- Data mining and processing
- Possible telemarketing
- Post mortem analysis
These extra costs can easily be justified by increased response and conversion rates. Also, when setting up the initial project there are certain startup costs that will not be duplicated in subsequent campaigns such as design, copywriting and layouts. If you pass this savings on to your customer it will increase their revenue per dollar spent.
|
1st Campaign |
Subsequent |
Software License Fee for Campaign, Campaign Brief, Creative & Copyrighting, Technical Implementation, Data Processing, Diagnostic Telemarketing, Post Mortem Analysis, Project Mgmt. |
|
|
Total Services |
$49,000 |
$28,500 |
| |
|
|
Production Services |
|
|
List Research and Acquisition, Online Media Services, & Services per drop.
|
$25,000 |
$25,000 |
Printing Cost |
$24,000 |
$22,800 |
Postage |
$17,600 |
$17,600 |
Total Production |
$66,600 |
$65,400 |
Total Campaign |
$115,600 |
$93,900 |
Partnering with Ricoh
Ricoh Production Printing Business Group is unique to the industry in that we deliver innovative business solutions to meet our customer’s needs. We are holding free Smart Business Seminars across the country to help you understand the value based pricing model and how to win a value-based sale. These seminars cover six main pillars (or best practices) that form the foundation of successful value-based pricing:
- Know when to talk price
- Talk to the right person
- Uncover the pain points to understand where you can add value
- Demonstrate the value using appropriate value models
- Price appropriate to value
- Capture the value in non-print services
These best practices will help you understand value based pricing and how you can migrate your business towards being a Marketing Service Provider. For information on a seminar near you, visit www.ricohsmartbusiness.com.
John Kaufman
Segment Marketing Manager
Ricoh Americas Corp.
An expert in production printing environments and solutions, John Kaufman is responsible for Graphic Arts Marketing for Ricoh Americas’ Production Printing Business Group. He brings 20 years of digital product solutions, application development and industry marketing experience to this assignment. John can be reached at john.kaufman@ricoh-usa.com or at 815-210-8815. |
