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Pricing for Variable Data Printing
By Alan Roberts
I recently attended a Webinar with many printers who are in the planning stages of adding digital color presses to their operations. A surprising number of them were undecided about exactly what to charge for Variable Data Printing (VDP) services, or even how to begin building a pricing model for them.
The 4Ps of pricing – “Proper Pricing Provides Profits” – is a logical place to begin the pricing exercise. The 4Ps also apply operationally and compartmentalize how to effectively price for VDP, including prepress and all of the things that need to happen before the job goes to press, the activities that happen during production, the paper used to manufacture the order, and all of the activities that occur once the variable data job has left the press.
Prepress
• Design Services: Typically charged at an hourly rate.
• Programming: Activities required to apply the variable elements to the Clients design using software, such as GMC, XMpie, Pageflex etc., usually at an hourly rate.
• Data Cleansing: Activities required to prepare the Client database, such as address correction, de-duplication of records etc. This process is typically done on an hourly or a per-record charge for each individual process performed on the file.
• Data Processing: The time it takes to merge the data file and design the file to rip to the press. Typically charged on a per-record basis.
Production
• Total number of impressions: Priced per impression, per color.
• Total number of colors.
• Special press set-up (e.g.: changing colors on an HP Indigo): Priced as a unit charge
• Special colors: Charged as a unit charge.
• The overall sheet size: There is usually a rate table by sheet size that accounts for the press slowing caused by larger sheets.
Paper
• The total number of sellable sheets required for the job.
• Press overage or set-up sheets required for post processing.
Post Processing
• Cutting
• Special Finishing
• Inserting and all the associated costs if the VDP job is inserted into an envelope (total elements not covered here)
• Postage
• Postage Processing: The time required to prepare the necessary paperwork for the Post Office
• Delivery of final job to Post Office
Generally speaking, all of the activities to produce a VDP order should be identified through your planned or existing work processes. From there, develop a specific rate table for each service to be performed. It is extremely important that all production elements are isolated first to arrive at “list” prices that are both competitive for your clients and profitable for you. While you may have to discount to get a particular job, this approach provides a basis from which you can establish a financially sound discount structure that enables you to win more orders than you lose, and to make sure those jobs can be really be delivered at a profit.
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Alan Roberts is Director of Operations for Patient News Publishing in Haliburton Ontario Canada, the industry leading publisher of newsletters for the Dentists in Canada, U.S and UK. Alan was the Vice President of Marketing for Canada’s largest privately owned branch network of digital print shops as well as starting and leading the digital division for Canada’s largest Forms Company as General Manager. He can be reached at alan.roberts@patientnews.com
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