Avoid Price Monsters

Early tomorrow morning, I’ll depart for Atlantic City and the annual United States Sign Council (USSC) Sign World Intl. tradeshow. We’ve devoted ample print and virtual editorial space advocating for those in the sign industry to attend tradeshows and support the associations that serve our industry, so I won’t dwell too much on it — except to say that I hope you attend tradeshows at every possible opportunity to stay abreast of industry trends and interact with manufacturers, distributors and fellow signmakers who may have products or insights to help you enhance your business.

Now, at last, to my point. At last year’s Sign World show, I attended a seminar led by Dave Fellman, the owner of a Cary, NC marketing and consulting firm that assists graphic-arts service providers with promotion. As part of his talk, he discussed the different types of customers a business encounters – at the bottom of the hierarchy, he talked about what he termed “price monsters.” Price monsters are defined as those would-be customers who buy solely based on price – the quality or intrinsic value of the goods or services delivered be damned.

This is good advice for any business, but it’s especially valuable to those in the signage and environmental-graphics market. You face an uphill battle even in the best of times to convince most customers that promoting their business through improved signage offers excellent return on investment. And these are far from the best of times. It’s very tempting to lower your prices to the point where a tire-kicker will finally say yes. But, beware. Are your overhead, payroll or cost of goods sold likely to decrease proportionately? Word about deep discounts travels, and you’ll be compelled to offer the same discount repeatedly. Ask your accountant (you’ve hired an accountant, haven’t you?) whether you can grow, or even sustain, your business with repeated price cuts.

Consider the news about the retail industry’s disappointing Black Friday weekend. According to the National Retail Federation, holiday shoppers spent nearly 4% less over Thanksgiving weekend than they did last year. This occurred despite a blitz of advertised “doorbuster” specials that brought tens of millions of customers to stores as early as 6 p.m. Thanksgiving evening (I think opening on Turkey Day is a slap in the face to low-paid, frequently abused retail workers, but that’s a separate conversation). Long story short, they cut profits in return for lower revenue.

Big-box retailers can probably afford that type of loss. Can you? Instead of rock-bottom pricing, think in terms of ways to add value (i.e., better products that produce revenue). Or, ask them what signage or graphics needs they have that haven’t yet been addressed. Better yet, visit them, survey the site and make suggestions. You’re not a commodity producer; you’re a marketing consultant for your clients.

Market your products from a position of strength and confidence, not desperation. Sure, you might lose a few customers who only care about getting what they want cheap, but appeasing price monsters isn’t the ticket to building your business.
 

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