For those of you who have worked with me or heard me speak, you know one of my mantras is getting paid for what you do, not what you sell. Unfortunately for some, we are relegated to what suppliers suggest we sell their products for, and while I appreciate that, all of the other things we do seem to fall into the free bucket or part of customer service.
Vendors set their prices on various criteria: warehousing, fulfillment, staffing, rent or mortgage, insurance, marketing, advertising, catalog printing, attending shows, technology enhancements – just to name a few. All of this and more are factored in to what a supplier ultimately charges for their product. An as an aid to us, they use a simplistic coding system that can tell you in moment what you net cost is, but folks that is a SUGGESTED price.
There are lots of vendors that sell a “C” handled white coffee mug, the basic version is basically the same yet the prices can vary and they do. Why is that? Well, for the very factors indicated earlier. So if one vendor shows the mug for $2 net and another at $3, does it mean that the second vendor is ripping you off? Not at all!
What are you worth per hour?
When I work with distributors and their salespeople, we will often breakdown their sales and profits and determine what exactly that individual is making an hour for all the effort they put in every week. You should do it, you might be shocked. About six months ago I was working with a person who was very talented and when we did this exercise it was determined that she was making about $10.80 per hour. This person was shocked and rightly so. (We’ll come back to this.)
Are you a professional order taker or consultant?
There are a ton of people who claim they are consultants but get paid like an order taker. Don’t get me wrong, if you are content with that, COOL. But if you’re not you should read further.
Consultant: Experienced professional who provides expert knowledge (often packaged under a catchy name) for a fee. Source: BusinessDictionary.com
Professional: A person formally certified by a professional body of belonging to a specific profession by virtue of having completed a required course of studies and/or practice. And whose competence can usually be measured against an established set of standards. 2. Person who has achieved an acclaimed level of proficiency in a calling or trade. Source: BusinessDictionary.com
Order Taker: Type of salesperson who only collects orders but does not make any diligent attempt to find new customers, or to persuade existing customers to increase the size or frequency of their orders. Source: BusinessDictionary.com
Unfortunately, most people don’t see themselves in the role or capacity of a professional consultant. So I ask you this: Don’t you ask questions, help determine a client’s need, solve problems, manage projects, do risk assessments, do continuing education, negotiate with vendors, outsource tasks to proper channels, secure art, do art, make suggestions (consult) on products, merchandise, packaging, proper layout and positioning, select proper shipping, follow up on all of that to ensure the client’s needs are met? You probably do a lot more, so why aren’t you getting paid for that? Is the value truly only in the product?
This is not an indictment on vendors; they are pricing their goods for a profit to cover all of the things we discussed and some we haven’t; and they should do this. The point is, when a vendor says “… my coffee mug is $2 net and I suggest you sell it for $3, please remember that is a suggested price. Each vendor’s circumstance is different and therefore pricing will be different as well. Just like you, different circumstances different pricing.
When you bring additional services to your clients and prospects, that is value – but it is perceived value. If your clients and prospects find value and worth in your uniqueness, then they will pay for it and you shouldn’t feel bad about what you charge. I will never forget a delightful conversation with the late Marvin Spike from ASI years ago. We got into a discussion about profitability and his words still flow through my head, and perhaps that may be a reason I preach about this topic. He said, “Cliff, remember profit is not a four-letter word.” How true. It is the source by which we sustain our families, save for the future, pay for education, put a roof over our heads etc. It’s what all companies should strive toward, bringing value and getting paid for the hard work.
So when IS too much, too much?
Years ago, I wrote an article about raising the bar, bringing value and getting paid. I shared an idea of how, when selling high-end jackets, I use to use suggestive selling to generate huge margin opportunities every time I presented. In this article I shared a story about selling laser engraved hangers to a client where I made 500 percent gross profit. The client loved the idea, bought the hangers for the jackets and had a remarkable response rate. After the article was published I was called, perhaps emailed, by a reader that accused me of extortion, stating, “We are in a 50/50 industry and you should be ashamed of yourself for overcharging the client. At most you should have doubled your cost.”
As indicated at the beginning of this article, I never took a handgun to that presentation or ANY other presentation for that matter. I simply had an idea, shared the idea with a client, associated a cost to it based on my effort and the originality, and he loved it. Furthermore, he had a choice! I was not the only one who could provide laser engraved hangers. I did not hold a monopoly on the hanger business – but I was intuitive enough to develop an idea, have a sample made, show it at the presentation and have the client get excited about it, believing that what I was charging for had VALUE.
Additionally, years ago I had a prospect contact me about printing one tennis shoe, the shoe was a part of a photo shoot. I did my calculations and realized how much time (and overtime) it was going to take and based on my hourly rate, the quote was for around $1,700 – and she paid it! When people see value in what you do – the stuff that separates you from the competition – that’s where the profits are.
I can go to one restaurant and buy a burger for $6.99 or go to another and pay $15.99. What’s the difference? It would be in all of the other unique things the restaurant provides. If I value those things, I am prepared to pay, and by the way, no one has EVER forced me to dine or buy anything I did not want.
So when is too much, too much? It’s when people don’t have a choice, or when they are forced to do something that they absolutely need. Two examples, one recent, one some time ago.
Years ago a devastating hurricane ravished homes in Florida, plywood that was once $20 a sheet then went for $80+ a sheet – overnight. That’s taking advantage but you had no choice; you had to have it. Most recently the situation with the pharmaceutical company that was charging $600 for Epi-pens. People depended on them and their price skyrocketed. No choice here – they had an audience that needed that product and the government had to step in. Being abusive and taking advantage of people is wrong, but when there are significant choices, then it’s fair.
Our products and services are not objects upon which people’s lives are dependent – our clients have choices.
You have a choice too. If you’re happy where you’re at, then perfect; but for those of you, who are inventive, creative and are always looking for ways to improve your clients' marketing, help them grow sales, drive more people to trade shows, help effective launches of new products and services, reward and recognize employees – NEVER feel bad about charging for your time and ingenuity. Agencies do it, doctors do it, lawyers do it. What makes you any different? Educate yourself, be creative, bring value, create differentiators and get paid for the effort – remember, “Profit is NOT a four-letter word.”
Until next month, continued good selling (and profits)!
For more than 30 years, Cliff has been speaking, training and consulting internationally to associations and national business groups on more effective ways to market themselves, their products and services, as well as motivating their personnel. Recognized by PPAI for his creativity, he has won the prestigious PPAI Pyramid award 25 times, and the Printing Industry's PSDA’s Peak Award for creativity five times in three years. He has also received PPAI's Ambassador Speaker of the Year Award six consecutive years and was the inaugural recipient of PPAI's Distinguished Service Award. Named one of top six industry speakers and trainers, he also was recognized by PPAI in the book, "PPAI at 100," as having a significant influence in education. He has also been recognized by Counselor Magazine as one of the Top 50 Most Influential People in the Promotional Products Industry. You can engage with Cliff at http://www.myengagepage2.com/cliffquicksell.