No, we’re not going to talk about a classic game show. But we are going to talk about the importance of building pricing strategies. Pricing strategies are an essential element of creating the best possible estimates as quickly as possible.
History shows that the first estimate to be received by a customer is most likely going to be the one accepted. But what happens if the estimate you deliver is not built based on up-to-date pricing tables or doesn’t factor in other dependencies of the job? You may have provided the fastest and cheapest estimate, but now you’re losing money and basically running the print job out of your own pocket.
Accuracy is what makes your print operations more profitable and productive. And that’s what we’re going to evaluate in this blog post. We want to make sure the estimates your print shop delivers are fully optimized—so you make a profit and keep your operations running smoothly every time you win a job.
The Anatomy of an Estimate
It all starts with costs. Before an estimator can create an estimate, they need clear visibility of the total cost of each print job. From materials and labor to equipment usage, every single job includes fixed costs, variable costs, and finishing costs.
They also need to understand the printer’s pricing strategy. From market or competitive pricing to dynamics pricing models, most print shops need to be highly adaptable when it comes to price changes.
Without instant access to any of this information from a centralized database, estimators are forced to get creative. To deliver an estimate, they now have the painstaking job of collecting all the data from different areas of the business. As a result, some organizations end up relying on outdated fixed pricing and not charging for overhead costs or unseen extras. That’s an expensive workaround when you consider the number of jobs you complete in a week. Underestimates are money out of your pocket—and they also negatively impact the rest of your print shop.
READ BLOG POST: The Cost of Print Estimating Mistakes
The more manual interaction your estimators have with pricing and estimating, the more room for error. When you consider the bigger picture, an underestimate impacts production, inventory, delivery, and overall profitability. In addition to losing money, you’re also putting your customer relationships at risk. If mistakes are made in the early stages of customer service, it can be devastating to your reputation.
If you’re looking at the bigger picture, your profits are being destroyed by mistakes, errors, and inefficiencies from the initial sales call to the production floor to delivery. There are production inefficiencies when substrates are changed out several times a day. There is excess inventory that might never be used. All of these areas are causing you money during every single job, and you don’t have the operational visibility to see where the real problems are.
The Pitfalls of Pricing Using a Standalone Estimating Solution
The solution is not to hire more estimators if you’re trying to improve your pricing and estimating. Most printers decide to invest in some form of print estimating and quoting technology. Print estimating and quoting software is typically designed to streamline the estimating process, reducing touch points and automating key elements of the estimating workflow. These systems also provide the required tools to build estimates easily, including templates and cost tracking.
You can choose between a standalone estimating solution or an integrated print MIS or ERP system with estimating capabilities. While both will help you improve your estimating processes, there are a few areas to consider before investing. One of those areas is pricing tables.
While some standalone estimating solutions might include the ability to create pricing tables, they are still separate from your other business applications. This makes accessing the most up-to-date data impossible. Additionally, this often leads to duplicate data entry and time-consuming manual processes and administration to ensure your numbers are accurate. By not integrating with your other systems, an estimator’s ability to create accurate estimates is hindered, and at the end of the day, that impacts your bottom line.
With an integrated print MIS or ERP system with estimating capabilities, the pricing tables in question are used for more than just estimating—they are used throughout your entire business. Built on a centralized database, you only have to update them once, and the data will flow wherever it is needed.
Relatedly, there is the whole area of e-commerce to explore. E-commerce is an example of how a centralized set of pricing tables can be used through another application if you have an integrated print MIS/ERP. If your MIS/ERP does not include an e-commerce storefront—and many don’t—you will want to make sure that one can be easily integrated. Even if you have not yet implemented e-commerce, it is something you should definitely have on your radar. You want people to be able to order things, even print projects, and have a price returned immediately.
Start Producing More Accurate Estimates Today
There are many other aspects to ensuring that you have the best possible pricing strategies and the tools to deploy them, in place. To learn more about the difference between standalone estimating solutions and integrated print MIS/ERP software, download this informative whitepaper from our talented team of print and business tech enthusiasts. From setting different pricing strategies to substrate flexibility, you’ll discover how integrated print MIS/ERP software will give you a huge competitive advantage when it comes to estimating and pricing.
Whether you are starting from scratch or updating an older system, we’ve also included some expert insight into what you should look for in an integrated estimating system!