Complete Story
05/04/2022
Quoins2Pixels
The Great Employment Migration
Over the past 12-18 months, businesses across the United States, large and small, have watched employees leave their companies in record numbers. The reasons are many and don’t need to be repeated here ad infinitum. Keeping employees is one of the key challenges in 2022, and here’s an idea that might help.
When was the last time you provided your employees a benefit statement? No, not the one in the Policy Handbook, but a customized document which spells out their benefits -- and assigns value to those benefits. Individuals know what they make per hour or month, but often forget they are receiving benefits which have a true dollar value. Consider sending out a Benefit’s Summary twice a year, or at minimum once a year. This document would show the total remuneration the individual receives. The value of life insurance paid by the company; the employer portion of health insurance; profit sharing; 401K matching, etc. All these benefits add up and can represent 20-30%, or more of an employee’s base salary. When that amount is shown as one lump sum, it reminds the individuals of the value of those benefits which many other companies may not offer.
The Price Cutting Trap
We were reading an article by a sales consultant advising his readers to stay away from the “price cutting trap.” His argument that once you cut the price you were stuck with it forever.
This sensible sounding observation comes from a world of prices set by estimating systems that are divorced from anything other than the mechanical specs of the project. Given that perspective, price cutting may be bad. It surely is bad if we cannot demonstrate the value of the project to the customer.
On the other hand, if the price cutting opened a new market with significant volume, it could be very good. The reality is that the price comes from the market and not the estimating software. It needs to focus on higher prices when they are there to get, but also to focus on driving volume to pay for the overhead.
More than one firm got top dollar for every job they sold but they couldn’t sell enough to pay for the overhead.
The Hunt For New Customers
The unfortunate reality is that customers are not forever. Regardless of how well we work together, the time will come when their needs change, their people will change, or perhaps another firm will buy their business. At that point a glorious relationship will come to an end—sometimes abruptly.
The only remedy is to be constantly on the hunt for new clients. That does not mean random telephone calls that wind up in voice mail. It requires careful thought about potential clients that might be a fit. Those are likely to be firms that are in the same business as your existing clients. If you are creating value for your existing clients, you can create value for these prospects.
For this reason, you need to ask your existing clients for referrals, as the right referral will get you past the voice mail. When you do connect with a prospect, you must start doing business as a stream of quotes does not make a relationship. Don’t let your pricing policy stand in the way of getting in their door.
quoins2pixels—the bi-weekly, nuts and bolts management newsletter
Graphic Media Alliance is proud to announce the coming arrival in your email of this publication which is short, easy to read, but totally focused on the nuts and bolts of the actions that will increase your profits. Each issue contains four or five short, but focused articles on the ideas that will really impact your bottom line like…
- What are your costs, and what does “cost” really mean?
- Steps you can take to preserve your cash, the lifeblood of your business.
- Compensation for sales reps that keeps them on your side.
- Should you buy or lease?
- Is overtime an expense or an opportunity?
- How do you price the new digital press?
- Thinking about buying another firm (or selling your own).
This is just a sample of the management challenges and opportunities that quoins2pixels will be exploring in every issue. Look for it in your email and editions of First Impressions and share it with your key people.
quoins2pixels is written by Bob Lindgren and Joe Polanco. Bob and Joe have spent decades in the printing industry, and throughout their careers, they have counseled hundreds of company owners on a variety of management topics. As a value-added service of Graphic Media Alliance, they are available to expand on these articles, or aid with projects. Bob can be reached at (818) 219-3855 and Joe at jspolanco49@gmail.com.
