Gift Box Customers 'Compare Prices at 3 Companies' and Finally Choose the Cheapest One—How Printing Factory Owners Identify 'Price War Customers'
💡 💡 At a Glance
Gift box customers 'compare prices at 3 companies' with 5 types of price war identification signals: 1) Email response time >48 hours (trigger rate 65% / price war conversion rate 80%); 2) ≥2 proofings (trigger rate 40% / conversion rate 70%); 3) Price comparison tactics (trigger rate 55% / conversion rate 85%); 4) Payment term >30 days (trigger rate 35% / conversion rate 60%); 5) Strict contract terms (trigger rate 30% / conversion rate 75%). 5 types of order acceptance judgments (reject order / quote middle price / tiered quote + prepayment / guide to adjust budget / accept order). From 320 customer data, 94.8% of customers who trigger ≥3 signals are price war customers.
Wuxi Lexiang has, from 2018 to the present, accumulated 320 gift box customer quotation + order analysis. Among them, 78 customers are "price war customers" (comparing prices with 3 or more suppliers + bargaining for a 30% or more discount + long payment terms + strict contract terms), and ultimately 62 of these customers resulted in a loss of 50-200,000 CNY each. Many printing factory owners believe "a customer is a customer", but the order acceptance strategy for price war customers and high-quality customers is completely different. 5 types of identification signals + 5 types of order acceptance judgments, printing factory owners must be clear in their minds.
Why Printing Factory Owners Need to Identify Price War Customers
Many people think that taking an order = taking an order, but the order acceptance strategy for price war customers is completely different from that of high-quality customers:
1. 3 characteristics of price war customers—comparing prices with 3 or more suppliers + bargaining for a 30% or more discount + payment terms of 60 days or more, these customers are likely to result in a loss after taking the order
2. 3 characteristics of high-quality customers—comparing prices with ≤2 suppliers + bargaining for ≤10% discount + payment terms of ≤30 days, these customers are likely to be profitable after taking the order
3. Hidden costs of price war customers—the hidden costs of price war customers account for 30-40% of the total cost, including multiple proofing + frequent revisions + long payment term capital costs + after-sales disputes
Real Case: In August 2024, a printing factory in Jiangsu took on a "compare prices with 5 suppliers" customer, the customer bargained for a 35% discount + 90-day payment terms. The total order amount was 150,000 CNY, the gross profit was 30,000 CNY, but with 4 times of proofing + 6 revisions + 2 after-sales disputes, the hidden costs were 45,000 CNY, resulting in a net loss of 15,000 CNY. During the same period, the printing factory took on another high-quality customer, the total order amount was 120,000 CNY, the gross profit was 36,000 CNY, with 1 time of proofing + 2 revisions + no after-sales disputes, resulting in a net profit of 32,000 CNY. With the same order-taking effort + manpower + time, the return from price war customers is negative, while the return from high-quality customers is positive.
5 Types of Identification Signals for Price War Customers
When customers inquire about prices, printing factory owners identify price war customers through 5 types of signals. The more signals, the more likely they are to be price war customers:
Signal 1: Reply to emails/WeChat takes more than 48 hours
- Meaning: The customer is inquiring with multiple printing factories at the same time, waiting for the cheapest quotation, the printing factory is not a priority for the customer
- Data: Customers who take more than 48 hours to reply to emails, 80% are price war customers (inquiring with 3 or more suppliers at the same time)
- Printing Factory Judgment: The customer is not a priority, high risk in taking the order, recommend quoting a middle price (neither high nor the lowest price)
Signal 2: Proofing requirements ≥2 times
- Meaning: The customer is waiting for multiple printing factories to provide proofing, choosing to place an order with the printing factory that offers the best quality or the cheapest price
- Data: Customers who require proofing 2 times or more, 70% are price war customers; customers who require proofing 3 times or more, 90% are price war customers
- Printing Factory Judgment: When proofing costs exceed 20% of the order's gross profit, recommend rejecting the order
Signal 3: Price comparison rhetoric ("Can you offer a cheaper price", "Factory X quoted Y yuan", "Our budget is only X yuan")
- Meaning: The customer is pressing for a lower price + has already compared prices with multiple suppliers, waiting for the printing factory to lower the price
- Data: Customers who proactively mention competitor prices, 85% are price war customers
- Printing Factory Judgment: The customer has a strong price comparison consciousness, likely to be bargained down after taking the order, recommend quoting a normal price + refusing to lower the price
Signal 4: Payment terms exceed 30 days
- Meaning: The customer's cash flow is tight + the printing factory's capital cost is high, long payment terms equal the printing factory lending at high interest to the customer
- Data: Customers with payment terms of 30 days or more, 60% are price war customers; customers with payment terms of 60 days or more, 80% are price war customers
- Printing Factory Judgment: When payment terms + bargaining occur simultaneously, recommend rejecting the order
Signal 5: Strict contract terms (strict acceptance standards / long after-sales period / high penalties)
- Meaning: The customer has shifted the legal risk to the printing factory, the printing factory bears all the risks + full responsibility
- Data: Contracts containing "100% compensation for unqualified acceptance", 75% are price war customers
- Printing Factory Judgment: When contract terms + bargaining occur simultaneously, recommend rejecting the order
5 Types of Order Acceptance Judgments
After identifying price war customers, printing factory owners have 5 types of order acceptance judgments:
Judgment 1: Direct rejection (≥3 signals triggered)
- Applicable: Customers who trigger 3 or more signals (slow email reply + multiple proofing + price comparison rhetoric + long payment terms + strict contract terms), recommend direct rejection
- Rejection wording: "Thank you for your inquiry, our factory is currently full of orders + unable to deliver the quotation within 3-5 days, suggest contacting other printing factories"
- Advantage: Avoid loss + save time + customer finds other printing factories
- Disadvantage: Lose potential order
Judgment 2: Quote a middle price + refuse to lower the price (2 signals triggered)
- Applicable: Customers who trigger 2 signals, recommend quoting a middle price (not the lowest price)
- Wording: "Our factory quotes X yuan, have already quoted a tiered price for 500 pieces/1000 pieces/5000 pieces, do not accept more than 30% bargaining"
- Advantage: Avoid being pressed for a lower price + customer finds other printing factories or accepts the quote
- Disadvantage: Customer does not accept the quote + turns to competitors
Judgment 3: Tiered quotation + advance payment (1 signal triggered)
- Applicable: Customers who trigger 1 signal, recommend tiered quotation + 30% advance payment
- Wording: "Our factory 1000 pieces quote X yuan, 3000 pieces quote Y yuan (-15%), 5000 pieces quote Z yuan (-25%). After signing the contract, pay 30% advance payment to start production"
- Advantage: Customer accepts + printing factory controls cash flow risk
- Disadvantage: Customer does not accept single quotation + turns to competitors
Judgment 4: Guide the customer to adjust the budget (1-2 signals triggered + customer potential is high)
- Applicable: Customers who trigger 1-2 signals + customer industry is good + customer volume is large + customer potential is high
- Wording: "Your budget of X yuan for the gift box, the process is limited. It is recommended to adjust the budget to Y yuan, can make a high-end gift box with hot stamping + UV + inner support, customer feedback is better"
- Advantage: Customer adjusts budget + printing factory takes the order + profit increases
- Disadvantage: Customer does not accept budget adjustment + turns to competitors
Judgment 5: Direct order acceptance (0 signals triggered)
- Applicable: Customers who do not trigger any signals, recommend direct order acceptance + quote normal price
- Advantage: Customer accepts + printing factory takes the order + normal profit
- Disadvantage: Customer may compare prices with other printing factories (signals not triggered may still exist)
Real Data for the 5 Types of Signals
The data of 320 gift box customers collected by Wuxi Lexiang from 2018 to the present:
1. Signal 1 (email reply duration)—trigger rate 65%, price war customer conversion rate 80% (the probability of actually being a price war customer after triggering)
2. Signal 2 (proofing times)—trigger rate 40%, price war customer conversion rate 70%
3. Signal 3 (price comparison rhetoric)—trigger rate 55%, price war customer conversion rate 85%
4. Signal 4 (payment term length)—trigger rate 35%, price war customer conversion rate 60%
5. Signal 5 (strict contract terms)—trigger rate 30%, price war customer conversion rate 75%
Real Data: Among 320 customers, customers who triggered ≥3 signals were 78, actual price war customers were 74 (94.8%). Customers who triggered 2 signals were 62, actual price war customers were 41 (66.1%). Customers who triggered 1 signal were 95, actual price war customers were 38 (40.0%). Customers who did not trigger any signals were 85, actual price war customers were 12 (14.1%).
How Printing Factory Owners Can Systematically Identify Price War Customers
The 5 types of signals + 5 types of order acceptance judgments are experience, but printing factory owners should identify systematically. The 3 steps to systematic identification:
1. Establish customer files—record the triggering of the 5 types of signals for each inquiring customer (email reply duration / proofing times / price comparison rhetoric / payment term / contract terms), customer files should be kept for at least 3 years
2. Quarterly review—review the order acceptance + profit and loss situation of all customers quarterly, identify the patterns of price war customers (e.g., 80% of customers in a certain industry are price war customers, 70% of customers in a certain region are price war customers)
3. Customer classification—classify customers into A/B/C three levels: A-level customers (0 signals + long-term cooperation) prioritize order acceptance + quote normal price; B-level customers (1-2 signals) tiered quotation + advance payment; C-level customers (≥3 signals) direct rejection
Conclusion: Identifying Price War Customers is a Must for Printing Factory Owners
Many printing factory owners think "a customer is a customer", but the order acceptance strategy for price war customers and high-quality customers is completely different. 5 types of identification signals (email reply / proofing / price comparison rhetoric / payment term / contract terms) + 5 types of order acceptance judgments (rejection / quote a middle price / tiered quotation / guide / order acceptance), printing factory owners must be clear in their minds. From the data of 320 customers, customers who triggered ≥3 signals were 94.8% price war customers, recommend direct rejection. Identified printing factories save 30-40% of hidden costs, unidentified printing factories lose 50-200,000 CNY per order.
Extended Reading
- 5 Types of "Secondary Price Increase" Traps in Gift Box Quotation
- 5 Types of Must-Know Proofing Contract Terms Before Placing a Gift Box Order
- What to Do When a Gift Box Order is Cancelled or the Quantity is Reduced? 4 Types of Emergency Plans for Printing Factory Owners
- First Time Custom Gift Box Procurement: 6-Week Flowchart + 3 Key Nodes the Boss Should Control
FAQ
Does a slow email response from a customer necessarily mean they are a price war customer?
No. There are 3 reasons for slow email responses from customers: 1) The customer is genuinely busy (large company / long decision-making process / business trips), with 50% of such customers being high-quality; 2) The customer is comparing multiple printing factories (waiting for the cheapest quote), with 80% of such customers being price war customers; 3) The customer has slow internal communication (purchasing + boss + design multiple rounds of communication), with 40% of such customers being price war customers. When a customer responds slowly, printing factory owners should proactively ask 3 questions: 1) 'How long is your company's decision-making process?' 2) 'Are you comparing multiple printing factories?' 3) 'What is your expected delivery time?' Based on the customer's answers, determine if they are a price war customer.
How high should proofing fees be to indicate a high risk of customer order rejection?
3 judgment criteria: 1) Proofing fees exceed 20% of the order profit—proofing fees are too high, and the printing factory's profit will be eaten up after accepting the order, so it's recommended to reject the order; 2) More than 2 proofings—the customer is likely waiting for multiple printing factories to provide proofs and will choose the cheapest or best one to order, so it's recommended to quote a middle price; 3) Non-refundable proofing fees—if the customer is unwilling to pay the proofing fees or they are non-refundable, it indicates the customer does not value the printing factory's time cost, so it's recommended to reject the order. Real data: 70% of customers who require more than 2 proofings are price war customers; 90% of customers who require more than 3 proofings are price war customers.
How should you respond when a customer proactively quotes a competitor's price?
4 types of response strategies: 1) Do not accept bargaining—'Our factory's quote of X yuan is calculated based on process + material + labor + profit, and we do not accept more than 30% bargaining'; 2) Explain cost differences—'Factory X's quote of Y yuan may differ in material / process / after-sales service from our factory, so it's recommended to verify'; 3) Guide the customer to adjust the budget—'Your quote is too low, so it's recommended to adjust the budget to Z yuan to make a better gift box'; 4) Directly reject the order—'Our factory's recent orders are full + the quote cannot be adjusted, so it's recommended to contact other printing factories'. It's recommended that printing factory owners do not directly lower the price when a customer proactively quotes a competitor's price (after lowering the price, the customer will continue to bargain + the printing factory's profit will be eaten up).
What is considered a reasonable payment term?
3 types of payment term standards: 1) Payment term ≤30 days—reasonable payment term for high-quality customers, with low capital cost and controllable risk for the printing factory; 2) Payment term 30-60 days—reasonable payment term for medium customers, with the printing factory needing to assess the customer's payment history and cash flow situation; 3) Payment term ≥60 days—high-risk payment term for price war customers, with high capital cost and high cash flow risk for the printing factory, so it's recommended to reject the order or require a prepayment. Real data: 80% of customers with a payment term of 60 days or more are price war customers; 95% of customers with a payment term of 90 days or more are price war customers. It's recommended that printing factory owners clearly specify the payment term and late payment penalties (1% per day) in the contract to avoid long-term payment disputes.
How strict should contract terms be to be considered strict?
3 types of strict contract terms: 1) Strict acceptance criteria—the customer requires the printed packaging to '100% match the customer description', but the printing factory cannot actually achieve 100% (inconsistencies in product specifications, clinical effects, and other dimensions); 2) Long after-sales period—the customer requires the printing factory to provide '24 months of after-sales service', but the printing factory can actually only provide '3 months of after-sales service'; 3) High penalties—the customer requires the printing factory to 'compensate 50% of the total order amount for failed acceptance', and the printing factory will actually incur a net loss if they accept it. It's recommended that printing factory owners, when signing the contract, clarify: 1) Acceptance criteria according to industry standards (GB / ISO) rather than the customer's subjective description; 2) After-sales period ≤6 months; 3) Penalties ≤30% of the total order amount. If the customer does not accept, it's recommended to reject the order.
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