For several months I have been contemplating a significant change in the pricing of ColorMetrix “off the shelf products.” Today, while trying to decide what to write about here, I figured out how to properly move forward on the re-pricing project. I experienced one of those moments when it all comes together.
What brought it all together for me?
First, the idea to substantially reduce the price of our off the shelf products has been floating around in my head for a long time. The trick is how do to it without cannibalizing our own sales. The answer is that cannibalizing our own sales is OK, it’s better than our competitors doing it for us. This may sound contradictory or even crazy but stick with me and it will all make sense in a couple minutes.
Our market changed. We along with one or two other players created the color proof verification software category about ten years ago. Color proofs for the print industry are generated from software RIPs (Raster Imaging Processor) and ten years ago none of these RIPs included color verification capabilities. In order to verify the color accuracy of the proofs, end users of RIPs added software like ours to the workflow. RIP manufacturers eventually realized that software like ours often pointed out deficiencies in their RIPs. So, they created their own verification modules (that might remind you of the fox watching the hen house) and sold them very cheaply or outright gave them away with the purchase of a RIP. Great decision to make a business problem go away and I admire it to this day.
Our business changed. We went from selling hundreds of software packages a year to selling dozens of color servers. It turns out our tools, technology and know how are better suited to supporting medium and large sized enterprise color needs. Color needs that run across the entire supply chain and through the complete color workflow. Our new challenge is spreading the word about the work we do. When I analyzed where our current enterprise customers come from….most started with our single seat off the shelf products. So, how do I expose more people and companies to the capabilities we possess understanding the challenge that our changed market creates? Two ways.
1. Social media and community. I am two-ish years into this journey and beginning to see real and significant payoffs. My professional network has grown dramatically. I am able to reach and help people in the color food chain I never even knew existed. People in the design community who react emotionally to “bad” color and see potential and hope to change and improve the way we all work with color. Many printers, unfortunately, still view color as a problem not an opportunity.
2. Lower the barrier to enter the ColorMetrix community. We want more people to find out what our customers already know. Doing business with Mike and Jim (and our cast of independent contractors) is very different than doing business with a company who knows you as a support contract number not a name. We don’t just provide color verification software we provide the strategy that goes behind a well thought out implementation of verified color in your workflow. So, we’ll be adjusting the prices of our off the shelf products to make them more accessible – stay tuned.
Some of you may feel this post belongs on the ColorMetrix blog. I thought about that but realized I’m sharing a strategy you can hopefully use and model in your own business. I’m also sharing a great deal more detail about my business than I normally do and for a few minutes, thought about not posting this at all. I realized, however, that my competitors who actually take the time to find and read this blog….they already get it and together we are making the printing industry a better place.
I’m curious, what do you think of this type of post?
Jim, this is a great analysis and strategy piece. I congratulate you on taking a hard look at your business and making changes and trying new approaches. I’ve seen too many ride their business into the ground rather than make these kind of changes.
One thing I might suggest: find a way to talk to your existing customers, especially those who have purchased recently, and offer them something of value to make up for the significant reduction in price. If not, they’ll feel like they paid too much or have been abused in some way. if you talk with them now, explain your shift and offer them something, you can turn them into strong advocates for you.
Good luck!
(and yes, this kind of post belongs here!)
Randy,
Thanks for your comments and the advice you provided in the second paragraph is a huge part of the reason I blog.
-Jim