Getting sucked into a price war with a competitor can happen with any promotion or product, but there are some instances where it’s more likely than others. While pens and other writing instruments may not be the most likely items, compared to say buttons or golf tees, they are by no means the least likely either. Writing instruments have plenty of inherent traits, such as how they tend to be sold in huge quantities or how they are often manufactured overseas, that make it more probable you may end up arguing with a customer about nickels and dimes.
Once that discussion starts, business can get ugly quickly. Before you know it, you’re looking at a situation where both you and your competitor are making no money, your services are being devalued, and your client is getting a substandard product. To avoid this lose-lose situation, below are seven tips on rising above a price war from some of the most experienced writing instrument suppliers in the industry.
1) Sell the Experience
One of the biggest steps you can take to avoid a price war is to present your pens as part of a marketing program, instead of just as a logoed product. “A distributor’s best opportunity to avoid a price war is by selling an integrated solution rather than just the product itself,” said Kristie Schnier, national director of sales and marketing, Sanford Business-to-Business, Oak Brook, Ill. “Service and the ‘value proposition’ are very important, and when the distributor focuses on the entire experience, it becomes difficult or impossible for the end-user to bid on price alone.” Tie your pens and products to a larger campaign, offer a few ways to measure ROI, and watch your commodity woes slip away.
2) Consider the Value of Name Brands
“Brand should really stand above all else in writing instruments,” said Schnier. “There are literally thousands of pen choices in our industry, but only a select few with brands that are recognized worldwide. The expectation of quality with brands like Sharpie, Paper Mate, uni-ball, Parker, Quill and Waterman is greatly elevated due to widespread exposure in retail channels,” she explained. “Pairing an end-user logo or message with a strong consumer branded product can add significant value to the entire project.”
3) Know Your Product
Joe Fleming, general manager for Hub Pen Company, Braintree, Mass., explained that one of the reasons price wars start is when end-buyers lack an understanding of what actually goes into making a product. “When buyers can’t discern the differences in potential product selections, then the only possible factor that they can compare is price,” he said. “Thus, the price war begins.”
“Distributors can win this war if they arm themselves with the knowledge of how quality pens are constructed and turn this knowledge into a competitive advantage,” suggested Fleming. To do so, he strongly recommended going beyond the catalog page and talking with your supplier to learn as much as possible about the product. Fleming stated that there is a vast amount of qualitative information, like plastic strength or ink quality, that simply isn’t printed due to space restrictions. There are plenty of details worth knowing about pen construction, but Fleming specifically singled out product safety and socially compliant manufacturing as areas to investigate.
4) Get Samples for Yourself
First-hand experience with a product can be a helpful tool in selling quality over price. “Distributors benefit buyers in terms of their experience with the product,” said Fleming. “By obtaining samples of products they’re interested in selling and using them prior to offering them to customers, distributors can verify that the quality of workmanship stands up to their expectations. A distributor’s personal recommendation and guarantee means a lot to buyers and can make the difference in getting the sale.”
5) Get Samples for the Client Too
Samples, of course, are useful for more than your own personal education. To get clients to see past an item’s price-point, consider sending them a few samples to feel out. “Always request samples, and let your customer hold and write with them,” said Lisa Newell, vice president of national accounts for Gold Bond Inc., Hixson, Tenn. “Once they like the way a pen feels and writes, price becomes secondary to value.”
6) Know Where Competitors Cut Costs
As points three through five express, knowing as much as you can about your own products is vital in overcoming commodity pricing; however, knowing about your competitors’ manufacturing choices can be just as important. “Education is key—and understanding what the differences are in quality and how that impacts value,” said Margit Fawbush, communications manager for BIC Advertising & Promotional Products, Clearwater, Fla. She highlighted a number of areas where other suppliers will typically try and cut cost, such as roller-ball quality, retraction mechanism durability and imprint standards. Fleming noted other elements to check, including the grade of any plastic or metal used in the body, the amount and quality of the ink, and the overall weight of the pen (with some plastic pens, a lighter weight can indicate a mold adjusted to use less plastic, resulting in a weaker body).
7) Build Relationships
Emphasizing your marketing skills and knowing your product inside and out may be enough to avoid price problems, but it’s also important to remember that our industry is one based heavily on customer/buyer relationships. A strong relationship with a supplier can be worth a lot in a tight pricing situation. “Don’t forget people like doing business with people they like—whether it is the supplier/distributor or distributor/buyer relationship,” said Fleming. “Distributors that develop a personal relationship with the right pen supplier can guarantee their orders will be given the care they deserve.” This “care” could be anything, from a few cents or a few days shaved off an order, which could be just enough to win over a tough client.
