ImagesMagUK_December_2021

BUSINESS DEVELOPMENT www.images-magazine.com DECEMBER 2021 images 65 The time to raise your prices is now. Just do it. Raising prices cheat sheet You’ll want to come well armed to any pricing increase conversation. Here are some top tips to use with a customer that wants to have a discussion about it [for advice on how to frame the conversation, see the boxout opposite]. ■ Overall, wages have increased at about a rate of 7.2% over the last quarter. What have you implemented in your shop? Calculate the rate and be armed with that number. ■ Who is your main competitor? Not that yahoo down the street who never does anything right… I’m talking about that shop that you are always concerned about. What are they doing? If they hold steady, there is less opportunity for you to introduce a price hike. ■ You need to be prepared with an explanation. There is going to be push- back. Have your data ready. Common things to discuss are the percentage that your supply chain has increased, the length of time that you haven’t actually raised prices, and even a discussion on the price increases that your customer has implemented. This is a conversation, so be prepared to have one. ■ Can you lower other costs or keep some things the same? Screen or art fees. Handling charges for shipping or fulfilment. Know what you are going to keep constant. ■ Have a Good-Better-Best scenario or pricing tiers. This could be based on your level of service to the customer, the timeframe for delivery, or even how you react to their orders (fully automated online versus having a dedicated rep). ■ Price-sensitive customers can get a stripped-down version of your service. Maybe this could include a longer production turnaround time, say three to four weeks, for example. ■ I would suggest you base all pricing on the actual costs of running your business, and not what other shops are doing. This is crucial to understanding your profit margin anyway. shops are slammed with work all around. They have never been busier. What do you think the impact would be if there was a price increase? Maybe coupled with your shop raising the minimum quantities per order? Would some of those dinky low-profit jobs disappear off your schedule? How much easier would it be to get better, more profitable jobs out the door when a chunk of that work that isn’t making you money is removed? If you haven’t already, do some maths. Pricing homework In your shop’s system, pull up November 2021. All of the jobs that you produced. Can you sort by total sales? Do it. If you can sort by overall profit margin, that would be better. (If you know that for each job.) My guess is that for the work that you produced in November, the top 20% of those jobs brought in about 80% of your revenue. That’s the 80/20 rule. This means that the bottom 80% of your orders only helped add 20% of the money in the bank for the month. This is the group that I want you to examine. What is it? That’s a lot of work for a less than significant amount of money. Do yourself a favour and take note of the customers. What are you agreeing to? For these bottom-type orders, what if you increased your prices and raised your minimum quantities? How many of these customers would stick, and how many would go away? What I’m hearing For the shops that I’ve spoken to, most have had at least one price increase. Most customers didn’t bat an eyelid. A few grumbled. But here’s the thing: Covid is the best excuse ever in the history of business to request more money for what you do. For every single one of your customers, they are already paying more in their lives. And it’s true. It costs more to do the same things from a year ago. Have you or someone on your staff recently spent an hour looking for 30 medium pink T-shirts to fill an order? Have you had to buy a different brand of ink because your normal supplier is out? Maybe you had to add some staff to the shop because you are so busy. Shops everywhere are paying several dollars more an hour and often a significant signing-on bonus just to fill out their staff. Don’t be scared. The price increase is justified. Also, just so you understand, the industry supply chain won’t lower prices increases next year or the year after. Marshall Atkinson is a production and efficiency expert for the decorated apparel industry, and the owner of Atkinson Consulting and co-founder of Shirt Lab, a sales and marketing education company, with Tom Rauen. He focuses on operational efficiency, continuous improvement, workflow strategy, business planning, employee motivation, management and sustainability. www.atkinsontshirt.com Power framing for conversations Framing a conversation is all about word choices, and how you build the conversation around them. It is positioning the line of thought by using specific words to focus on the context of what you are trying to get across. This could be with short, punchy phrases, or with a story. Your conversational frame gives you the backdrop for what you are trying to discuss. Change the conversation with a new frame Trying to get your point across but not getting anywhere? We’ve all been there. Next time, try changing the frame of the conversation and stop arguing the facts that are bouncing off the other person like fired bullets aimed at Superman’s chest. Here are five quick tips to help: 1. Begin with a clear idea of where you want the conversation to go. Without a destination, your conversational journey won’t get very far. 2. Plant your feet firmly into your own foundation framework. What is your one source of truth? Can you develop a story or metaphor that will get your point across? 3. Pull the other person into your frame by asking questions and getting them to either repeat what you are saying or by responding with, “That’s right”. Do not use their words or go into their side of the story. Stay on your own turf. 4. Negate any objections before they are pulled out by including them in your frame. 5. Engineer the conversation to solutions that you can discover together. What will work using your frame? Talk about that. To read more on framing, go to imagesmag.uk/power-framing- conversations.