Turnover Is Vanity, Profit Is Sanity
Most people have heard this saying many times. But how many of us actually put it into practice?
All too often, we hear of sales people who are busy chasing more and more volume. But they rarely stop to think about whether the new business that they are winning is profitable or not.
This strategy works fine if you have a press that is losing you money because you do not have enough work for it. For everyone else it may be time to start looking at profit levels in more detail. If you want to increase profit, it is usually easier to focus on some of your existing accounts. It’s also better to look at the way in which you carry out business, rather than at the business volume.
Here are three simple ways to increase your print profits:
1. Use Efficient Print Partners
It is surprising how much time is wasted looking after customers. Much of this wasted time is made up of administrative tasks that could be done more efficiently. And a lot of the administration time is spent in overseeing jobs that have been outsourced.
Many people use price as their sole benchmark when choosing a supplier to outsource print. It’s far better to focus on the total cost of production. That means measuring the time you spend managing your suppliers.
An efficient print partner offers the right level of service. Here are some of the things you should be making sure your production partner offers:
- Instant pricing
- Quick ways to create alternative versions
- Purchasing multiple products on one order
- White label delivery
- Online product guide so you don’t make time-hungry or costly mistakes
These sorts of features can save you a LOT of time when you are managing jobs. This time means that you can manage more jobs with less staff. Or spend more time on (profitable) sales.
If you want to find out more about how to find the right company to work with, check out our article on the 15 Essential Features Of The Perfect Print Partner.
Of course, your route to increasing profit margins should not just be focused on efficiencies. Here is an important sales strategy.
2. Apply A Product Price, Not A Mark Up Percentage
Many companies apply a blanket mark up percentage to all their jobs. It’s an easy way to make sure that everyone produces correct prices without lots of internal questions and discussions. Some companies may adjust the price according to the level of customer. However, typically that’s the only variation that is used.
It can be much more beneficial to vary your mark-up according to the type of product. There are two reasons for this. Firstly, some products are much more time-consuming to produce than others. It is right that your price reflects the amount of time and effort that you have to put into a job. A blanket profit margin may or may not give you a worthwhile profit on a job.
Secondly, some products can be sold more profitably than others. Everyone knows that the business card market and the market for standard-size leaflets is extremely price conscious. It will be hard to add on a high mark up for these types of product. However, there are a good number of products that have not yet been commoditised. There are relatively few people selling items such as Clappers , Selfie Frames , Life Size Standees and Double-Sided Banners. Do not simply apply the same mark up to items such as these that you apply to commodity items. That would mean that you are missing out on some good profit opportunities. Most people are happy to buy these items, even if you build in a higher profit margin.
Let’s suppose you sell commodity items at a 5% profit (not mark-up!). If you add another 5% to the prices for non-commodity items, you have doubled your profit on these items.
The markup lesson should also be applied to a third strategy for increasing your profits.
It is much easier to sell more to your existing clients than it is to sell business to new clients. However, many of us do not focus enough on upselling our current customers.
Here is a simple strategy that often leads to a successful upsell: simply ask “Why?” Firstly, this strikes up a conversation between you and your client, which creates the opportunity for more sales. Once you understand the reason for your customer making a purchase, you have the information you need to suggest more useful products and services for them.
For instance, if someone is ordering a roller banner for an event, they may also need some Brochures or Flyers.Make sure you and your team have a list to upsells to hand, ready for this type of conversation. The list should have product prices already worked out. This means that you can quote people instantly over the phone. If you would like more ideas for upsells check out our post 15 Simple Ways To UpsellA Print Customer.
Remember that most buyers are far less price-sensitive when it comes to upsells. These are items that you can add a higher profit margin to.
Measure your success with these strategies
It is important to discover which strategies and products work best for you. Then you can focus on making your profit margins as healthy as possible.
Turnover is vanity, profit is sanity. Make sure you stay sane when it comes to selling print.