Many years ago there were three young ambitious friends. They met while working for a small start-up business newspaper. One went on to get a Masters in Marketing. Another created a newsletter business. And the third became a printing sales rep.
Time passed and they lost track of one another. The one with the Marketing Masters Degree jumped into direct marketing and began to create a name for himself. He was invited back to his home town to start direct division for the largest advertising agency in the city. The newsletter guy struggled but kept afloat. The printing rep found out how to make a prosperous living by securing good customers, and taking good care of them. He did well.
All three had different business philosophies. Mr. Marketer believed in charging top dollar for his services. The newsletter guru believed in being the lowest priced, and the print rep felt the real answer was somewhere in-between. Being the highest priced would drive some customers away, but being the lowest would create disrespect. When it’s all about the lowest price, someone will come along and find a way to shave off a penny or two. Price is a very shaky foundation to build on.
Fast forward a few more years. The newsletter man lost his business and moved away somewhere to the Northwestern United States. The direct marketing guy teamed with another well-respected direct marketing entrepreneur and discovered that he could charge even more than he previously thought was over-the-top for his services. And the print rep steadily built his customer base seeing year-by-year increases.
Eventually, the Marketing fellow, sold out his business to his partner and began an affiliate Internet business. He caught the wave at the beginning and has been very successful. The print rep became a self-employed printing broker and began making more money than he had ever seen before, not as much as his friend, but pretty comfortable nonetheless.
Today, the newsletter guy has been off the radar for too many years. Hopefully he is doing well. The Internet affiliate master has a big office with many people working for him that do mysterious things on the Internet that even he doesn’t pretend to understand. He drops in from time-to-time just to satisfy himself that all is well and count his big bucks. “It’s a tough job,” he acknowledges, “but somebody has to do it.”
The printing broker is still doing well, but has definitely seen a drop in business because of the Internet. He is concerned about the future of the printing industry and his place in it. Maybe a little late he decided to enter the fast paced world of the Internet. If you can’t beat ’em, join ’em. He’s now on social sites like Facebook, Twitter, and LinkedIn. He’s learning terms like SEO, Links, Widgets, and Plugins. He’s writing blogs, books, and developing training materials to help printers, customers, and prospective print brokers become more successful in their businesses. In short, he’s reinventing his career at a time, he thinks, when he should be resting in a golden hammock.
What’s the moral of this story? If you bargain with life for a penny life will pay no more. There’s a temptation during tight times to cut prices. If you own a company your salesmen will all whine that, “Our prices are too high–we can’t compete.” Don’t give in to this cry, because it is very difficult to raise them again after you have established a low water mark. If you compete on being the lowest price you may as well start making your bankruptcy plans now.
What about the middle road? The middle of the road has its dangers too. That’s where the traffic is the highest. It is very difficult to establish your own identity when you are in a flock of me-too’s. Long-term success depends on splitting off from the pack and becoming your own person, or company. Be unique and find a way to charge more for your services than the going rates. Sock some of it away so you’ll have extra dollars to take advantages of opportunities that may come your way. Maybe you too can catch the next big wave and beat me to that golden hammock.