The cardinal rules on price for custom molders wishing to succeed in today's competitive environment are simple and straightforward: Rule No. 1: The last thing you want to talk about is price, even if you have to be rude.
Rule No. 2: If the customer asks about price, pretend you never heard the question. Instead, stress your firm's services/capabilities.
Rule No. 3: When price comes up for the third time, say: ``I know price is important, but before our company can quote a price, I must know what your needs are and then I can figure out how best our company can meet them.''
It is an uphill struggle to get business in a crowded, price-driven industry. But, without getting customers to detail their needs, you are competing on price. To get profitable business, you must develop a creative solution that fully meets their needs, and sell them on how your solution has provided them with more value than the low-cost bidder.
It is interesting that the reason most salespeople cave in on price, as opposed to getting customers to detail their needs, is that they are frightened to death of rejection. The reality is that this is precisely the last thing to fear. Today, customers seek competent vendors that will solve their needs, and give them an advantage over their competitors.
It takes strong sales management to reduce unprofitable (or below standard) business, but that is what successful firms do. They know there is profitable business out there, but it is only obtained when a unique set of solutions are provided to fulfill customers' needs. The successful companies recognize that what made them great in the past was the business from customers that needed a unique solution. They steer clear of deep-discount molding business, recognizing it for the danger it represents.
Successful molders know that there are qualities other than price that bond them to their customers. Winners develop a company culture of civility, promptness, responsiveness and can-do attitudes, and learn that broken promises often cause real hardships for customers.
Remember, winners stress the positives and negotiate on price as a last resort.
Afif is president of International Plastics Consultants Corp. in Stamford, Conn. The firm specializes in strategic planning and marketing services for the plastics industry.