5 Ways to Impress – Résumé
Every print job that I can remember, stretching back into the mists of time, has always been urgent!
This may be due to a number of factors, but the underlying cause, is that we neither penalise the client for wanting it ”urgently”, nor do we reward the client for allowing us to deliver it, in a timeframe that suits us (or more accurately, that suits our capacity, at any given time).
With modern quoting and workflow software it should be easy to quote EVERY job by routinely offering (say) three price options:
$10/k – for urgent delivery (i.e., that disrupts our normal workflow);
$9/k – for normal delivery;
$8/k – if the client’s in no hurry and allow us to blend it into our workflow at a time that suits us.
The numbers are arbitrary, of course. But the point is that for 100 years we’ve priced everything on a ”normal” delivery basis … then we cave-in and deliver some jobs ahead of schedule, which has a disruptive and largely un-recovered cost impact. Economists love this tiered approach as it actually puts a cost on disruption, but it ALSO offers a reward/incentive to those clients who genuinely aren’t in any hurry.
However, our traditional ”one size-fits-all” pricing philosophy has encouraged the exact opposite, over the years: it’s actually ENCOURAGED everyone to seek a rushed delivery benefit for free!
This idea is not new! Airlines use it, as do hotels, just about every service-provider in a competitive market where excess capacity can come and go like the wind, uses it – except the printing industry!
It pops up, in disguise, in off-peak energy pricing – where we take it for granted.
There is no LOGICAL reason why we shouldn’t adopt a capacity-based pricing model. These days we can monitor and manage our workflow pretty well. I think the answer is we’ve fallen into the same bad habits of estimators in the building game, where you simply took the cost of a tonne of bricks, add the cement (metaphorically), add the labour component, add the lot together and bingo, there’s the cost of your building!
This approach (ie, recognising the time-value, in pricing) may cause aggravation among some, who will struggle to understand why the very same book or brochure could cost $6 one day and $5 another. The truth is, the first one was wanted urgently – the second was ganged-up and run at a more convenient time, ie, when it suited the printer.
The economist would view it as simply stopping one client gaining an unfair advantage – i.e., getting his job earlier than another client, but not paying anything for that benefit. It’s a bit like a crowd at a football match; if one person stands up to gain an unfair advantage everyone else then has to. But nobody is better off. In fact they’re all worse off, because now they’re all standing! If everyone in our our industry adopted this approach to pricing, average lead-times would get shorter and the need to ”jump the queue” would diminish – and everyone’d be better off!
Note: Going back to the numerical example ($10, $9, $8/k) – nobody is saying you MUST charge those prices. You can charge everyone $9/k if you wish. What it does, is remind us that a rushed job will actually COST more, and a non-urgent job will actualy cost LESS.
Wouldn’t any rational person want LESS of the former, and MORE of the latter? You be the judge.
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