From the Editor: Raise Your Rates
LIKE EVERY other business, an in-plant has to remain viable, and that means raising rates from time to time to compensate for cost increases. Yet many in-plants are reluctant to tamper with established prices. After all, aren’t you there to save money for your organization? Don’t your rates have to be low? Won’t customers revolt if you raise them?
The reality is, your costs are rising all the time. Paper, ink, gasoline for delivery vehicles, they’re all getting pricier by the day (as are employee wages and benefits). Some in-plants factor rising consumables costs into each job estimate without touching the overall rate. But what of future needs like software and equipment upgrades? A tactful rate increase (that takes competitors’ rates into account) will help you cover these costs.
If you avoid sharing these expenses with customers out of fear of their reaction, the consequences will eventually be dire for you. You will no longer be able to afford technology upgrades, thus robbing customers of the advantages those upgrades would bring. And once you become obsolete, your customers will just turn to outside suppliers anyway. Then where will you be?
One in-plant that asked not to be named recently added a half cent per impression to its digital black-and-white printing charges. With millions of annual clicks on those machines, the cost increase (the first since the early ’80s) quickly improved the shop’s fiscal situation. What’s more, customers did not revolt. Some even said they were surprised rates hadn’t gone up sooner.
Obviously rate increases must be handled delicately. Profitable products should subsidize those that are necessary but not as lucrative, with frequent evaluation to account for market shifts. And as for customer outrage, just consider how incensed most of us were when gas surpassed $2 a gallon. We got used to it eventually. (Now we pine for those days.) And when we consider how much more expensive gas is in Europe. . .well, most of us just shut up and pump. Likewise, as long as your prices stay below those of commercial printers, any initial indignation will fade.
Without a rate increase, your in-plant may not survive. And only by surviving can it continue to provide a benefit to your parent organization.
On another topic, I just returned from Salt Lake City, where I helped coordinate the judging of the In-Print 2008 contest. Several inches of new snow threatened to stall the arrival of local judges, but thanks to their hardy Utah spirits, they braved the adverse conditions and the judging went on without a hitch. It took most of the day to inspect each of the nearly 570 entries, and in the end, 86 of them ended up with prizes. (Check our Web site for the list of winners.)
As usual, once the judges got into it, their love of printing compelled them to examine even the finest details of complex pieces, speculating on the processes used, often with admiration. Its always encouraging to see printers so enamored of their craft. Many thanks to our judges for their diligence.
Bob has served as editor of In-plant Impressions since October of 1994. Prior to that he served for three years as managing editor of Printing Impressions, a commercial printing publication. Mr. Neubauer is very active in the U.S. in-plant industry. He attends all the major in-plant conferences and has visited 200 in-plant operations around the world. He has given presentations to numerous in-plant groups in the U.S., Canada and Australia, including the Association of College and University Printers and the In-plant Printing and Mailing Association. He also coordinates the annual In-Print contest, co-sponsored by IPMA and In-plant Impressions.
