WTP Relieves Pricing Pressure When it Enhances the Customer Experience
Why Web to Print May or May Not Enhance Your Value and Customer’s Experience- Part 2
This is the second article in a two-part series that talks about the role of Web to print in customer satisfaction, the perception of value, and the impact on competitive pricing pressure. The first article included adoption rates for in-plant and commercial printers tempered by real world experience, discussed how automation can reduce errors and billing problems, and looked at how changes in customer demographics impact the definition of customer service. This article introduces the idea that companies that achieve better customer experiences are less susceptible to price competitiveness.
In theory a well-run in-plant should result in lower operational costs simply because some (but not all) don’t pay for floor space, utilities, or mark up prices to make a profit. The problem is that printing costs depend on volumes or utilization rates. That means when demand drops then the cost per page increases. In most in-plants, competitive pricing is essential because the facilities management and outsourcing companies will claim that your prices are too high when they try to interest management or administration in their services.
However, price competitiveness is only considered a critical factor in companies with average customer satisfaction. Companies that truly delight the customer are less susceptible to complaints about price competitiveness. Research has found that companies with the highest customer experience can charge more. That is one of the reasons enhancing the customer experience is important to commercial printers- they can charge more and not lose customers or business.
In 2013, Walker Information published Customers 2020: The Future of B-to-B Customer Experience. This ground-breaking study found that customers are willing to pay more to buy products from companies that have a higher perception of customer experience.
For many people in the printing industry it is hard to imagine that price is not the most important factor in purchasing decisions. It may be easier to understand with products that are not related to the printing industry, such as some of the top brands. Why do some people only buy iPhones, visit Disney theme parks, drink Remy Martin, ship with FedEx, buy BMW’s, or any other top brand? It is certainly not based on price. Top brands charge more and their customers are willing to pay more. Believe it or not, there are even some commercial printers and in-plants that charge premium prices. Only companies that provide a superior customer experience can charge these higher rates without customer complaints.
Online Storefront, E-communication and Battling Threats
Cutting through all this research is the simple fact that offering an online storefront allows customers to perform online pricing research and ordering. Others want the ability to order or receive order status and confirmations on their smart phone or tablet anytime, day or night. Online services have become a critical component of customers’ perception of value because they not only include everything from ordering to delivery, but also include the speed to get a quote and an online option to provide feedback about the experience.
In other articles we have talked about the sales pitch offered by facilities management and outsourcing companies. These companies that are trying to take the in-plant’s work offer management faster turnaround, higher-quality, or lower prices. The new management trend known as enhancing the customer experience will undoubtedly become a new option these companies include in their sales pitch. In-plants that are not offering Web to print functionality are creating a new opportunity for these outsourcing companies to offer an advantage over the in-plant.
If you want to learn more about how to measure your competitive pricing, metrics that measure your customers perception of value or alternative pricing strategies such as market driven pricing, email me at firstname.lastname@example.org.