Hiring a Professional To Conduct a Pricing Survey (Revised/updated 5-4-21)
Over the past 25 years, I have hired or retained a number of individuals to conduct surveys of my competitors. I Wanted these individuals not only to survey my competitors about what they were charging for specific products, but I also wanted to grade my competitors in terms of professionalism, friendliness and overall demeanor.
In the 1980s and 1990s, a period during which I conducted more than 500 on-site consulting visits, I frequently found myself suggesting that some of my clients, especially those with apparent hang-ups about price, hire a professional to conduct a survey of their own competitors. Of course, with that came the necessity of explaining how I thought it should be conducted as well as how much it should cost.
Great Variations Within Individual Markets
As a publisher of dozens and dozens of pricing studies over the years, I have often told folks that the greatest variations in pricing in this industry occur not between one section of the country to the next or from one market to the next, but rather within individual markets. While prices for specific products might vary by 5-7% from one section of the country to the next, statistically it is not uncommon whatsoever to find prices for a specific products and quantities to vary by +/- 25-40% within even the smallest of markets.
As an example, in you take a relatively small town or city where there are 10 small format quick printing operations, and you price out a specific product such as 500 #10/24 white envelopes in black ink, you will likely find an average price of approximately $80-85. However, if you price that product out among 10 different printers in that town, you are likely to find prices ranging from $59 to $108.
You may find even lower prices and higher prices depending upon the day of the week you are shopping and who you happen to talk to at the time. Interestingly enough, the printer who may charge the highest prices for envelopes may also be the lowest for matching letterheads. If you are looking for logic and consistency in pricing in this industry you’re probably looking in the wrong place! (P.S. These types of variations in pricing occur in countries as well. There is no logical explanation for these types of variations and inconsistencies.)
Put simply, while I would never allow my competitor’s pricing practices to dictate my own, I also believe it is important to keep informed as to what is going on in your market area. It is also important to get a better feel about your competitors from the eye of a typical consumer or printing buyer.
Hiring a Professional Shopper
The first mistake many printers make when considering shopping their competitors is to do it on the cheap. Spend as little as money as possible and do it quickly. Well, as is often the case, you get what you pay for. If you’re going to hire someone to call and visit other printers and evaluate what they offer and what they charge you have to do it the right way!
That pretty much means going outside. You don’t want to assign this task to a CSR or graphics person or maybe someone in bindery. You probably don’t want to have your grandmother or mother-in-law tackle this either.
First, you need to set up a real world scenario for your shopper. You need to select a reasonable number of closely related products that you would like to have shopped. Ideally, these should be the types of products (and services) that you like to get yourself. Look at your existing list of key customers, and try to develop a fictionalized company that closely matches real world customers that you tend to deal with.
Establishing the Proper Scenario
Let’s imagine that you consider the healthcare field a lucrative source of business for your firm. Maybe you already print for a couple of walk-in clinics. So let’s imagine a scenario where a secretary is sent out by a team of doctors who are considering opening up a new walk-in clinic and they are going to quickly need six specific items….
- 500, 1M and 2.5M 2-sided, 4C 4 x 9 Rack Cards on 100# Coated Cover
- 500 ea. Of four different 4C business cards, 1-sided
- 1M Letterheads and Matching Envelopes 2C
- 1,000 and/or 2,000 patient information sheets (blk)
- 100 pads of 50 each prescriptions forms, 4 x 5.5” on Security Guard paper
The above list is strictly off the top of my head. You will have to come up with your own. I would definitely limit the number of products to be surveyed. Too many, and your shopper as well as the printers they are calling up will get discouraged or become suspicious. If you make the list too long, with too many variables, you are going to encounter reluctance and delays. Obviously, there are many other products and variables that could be applied. You could ask about the additional cost of numbering, or if the letterheads where only one color instead of two.
Hiring a “Professional”
Remember, you are not the person that is going to be doing this shopping. Someone else is, and they have to actually believe and play the part of a secretary for this fictional firm. So, you need to check around with your employees, friends and family and let the word out that you are looking for someone to tackle and take on a special 3-4 day project. Let it be known in advance that you expect professionalism and a thorough job to be performed.
You also need to be willing and able to pay someone a decent fee of $14-18 per hour (or more), and you need to realize that this project could easily take 20-35 hours or more to complete. Once you have established the scenario under which you want this person to operate, they need to be provided with a written list of products (like above), a list of printers you want them to visit, as well as specific questions or observations you would like them to make with each visit. What does the place look like, how professional where the people who helped the shopper, how fast did they get back with prices, etc., etc.
So What Does Kathy Do?
Let’s say you have hired Kathy. Kathy needs to dress professionally and should probably carry a small briefcase to play the role. You might or might not even supply her with her own business cards, but in that case the name of the business might be Medical Office Experts, Inc. and of course the phone would have to be her own cell phone. Whoever you hire has to be enthusiastic. Kathy needs to be smart, but she shouldn’t have to know much about printing, nor do you want her using an unusual terms that might set off alarm bells at the firms she visits.
You need to expect that Kathy will make at least one and possibly two visits to each of the ten firms. She should also probably have reason to call them once or twice as well…. Maybe if for no other reason than to check as to why she hasn’t heard back from the company. She truly has to be willing to play the role and believe in it if this is to be successful.
Personally, I would tell Kathy that I don’t really expect to hear from her until she is finished with the project. You should expect, at the very least, a pricing spreadsheet of some sort breaking out all the prices she has collected by individual printer as well as a written report with 1-3 paragraphs summarizing her visit to each firm. Her ovcrall analysis of the firm, the staff, general appearance, etc.
The one added touch, but rarely done because of the circumstances, is to have that same shopper shop your own firm. That means hiring your shopper and discussing the project either outside of normal office hours or hiring the person off-site.
I cannot emphasize enough that this project, if it is to be done at all, be conducted professionally, and not just thrown together by having someone make secret, quiet calls from some office in the back of your firm.
I can assure you that once you get the final report, and that’s exactly what you want to receive and expect, is a formal report with pricing, analysis and possibly even graphs. If you can get something like that and it takes 25-35+ hours to complete it is well worth the $350-$550 you might end up spending on this project. Quite naturally, I would expect that you would also be able to sit down with your shopper and get some one-on-one observations to fill in some of the possible blanks.
I will assure you, if this survey is conducted properly, you will be absolutely amazed at the differences in pricing, quality and general overviews that you will receive from your shopper, and that in turn should be of great benefit to your firm. All the more so, if your shopper is able to shop your own firm and be as brutally honest about your own employees and operation as you expect her to be about the competitors she shops.
John Stewart, Executive Director, NPRC
Email me with your questions at: mailto:[email protected]