PRICE WARS:T H E 1 P D I F F E R E N C E

6 reasons you’re fighting a losing battle (and 6 ways to win it).A G U I D E F O R PAC K AG I N G C O M PA N I E S .

Research by the Smithers Group estimates that the value

of global packaging market will reach $975bn by 2018. It’s a

bustling industry, a truly global one and it has its fair share of

fierce rivalry. Dominated by some of the biggest companies

in the world, the difference between winning a deal and

losing one in the packaging world can often come down

to a penny or two; that’s just how cutthroat an industry it is.

Furthermore, the loss of a single SKU can lead to losing an

entire customer account.

STATE OF THE PACKAGING MARKET

From tin cans and vacuum packaging to glass bottles and

bubble wrap – the packaging industry is one of the most

competitive around and can often make you feel like you’re

fighting a losing battle with the big boys. This eBook will take

a look at the 6 biggest reasons why the battles can be so

challenging and how you, as a local packaging supplier, can

overcome them and take the market share you deserve.

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PRICE WAR 101

In a price sensitive industry, a one or two penny price

difference can often be all it takes for your customers to

switch their allegiances to one of your competitors. Bigger

players are often better poised to take a hit on price just to

get a deal over the line, but as a smaller supplier, shaving a

penny or two off your unit price can be devastating.

For many packaging suppliers, competing on price can be

one of very few ways to increase their market share. In a cost

driven market, your customers have all the power; they can

inform price (“I can get this cheaper elsewhere”), slate your

offering (“Company X’s product does A, B and C”) and word

of mouth can spread like wildfire, good or bad.

The cost of raw materials continues to fluctuate and a steep

rise in plastic prices across Europe has had a detrimental

impact on many packaging suppliers across the world. As

margins continue to be cut, international price wars are

breaking out. Add poor brand loyalty to boot and customers

are in a very powerful position to dictate the ebb and flow of

sales for many packaging suppliers.

What can you do?

Many packaging suppliers are stuck between a rock and a

hard place. With thousands of customers to look after, it’s

common to only notice a customer has gone AWOL when

it’s already too late.

Despite the packaging industry being incredibly forward

thinking, businesses are still having to manually trawl through

dozens of spreadsheets to get even an inkling of a slipping

customer. Software tools can be one of very few easy ways

to stay on top of thousands of the kaleidoscopic account

activity within your customer base.

A slight change in price can inform a customer’s buying

behavior overnight, but with a little insight into your accounts,

you can act fast and treat your customers like individuals, not

just another name on an order sheet.

Sales intelligence and CRM software can be a total game

changer and a springboard into the digital side of sales.

Armed with the information gleaned from these sales tools,

your customer facing team will be able to call a customer

whose spend has changed, ask why and make them an offer

to win the business back. Who bought cardboard boxes last

year but not filler? Who’s been buying bubble wrap from

you for the last 11 months but is yet to buy this month? Who

stopped buying from us altogether in the last month?

The answers to these kind of questions will not only put

your sales team on the front foot against the big boys and

smaller competitors, too, but will hand them the ability to

craft bespoke offers that will keep your customers hungry

for more.

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the same old

Margins are being squeezed tightly due to the simple fact that

there’s largely very little differentiation between suppliers.

Shrink wrap from company X is likely to be the same as

shrink wrap from company Y. What’s more, the advent of a

global, online marketplace means it’s easier and faster than

ever for your customers to source cut-price alternatives to

your local ones.

With so few differentiating packaging products available, but

a whole host of suppliers vying for the same business, cost

is often the only dictator when choosing between suppliers.

Yet as consumers become more conscious of the impact

packaging can have on both their health and the environment,

packaging suppliers have a huge opportunity facing them

now and for the foreseeable future.

55% of global customers have said that they are “willing to

pay more for products provided by companies committed

to positive social and environmental impact” (Nielsen,

2014). These figures pose a huge chance for packaging

manufacturers to branch out and take a different approach

in order to stand out from the crowd.

Whether that’s recyclable qualities, smart innovations or even

packaging for the health-conscious buyer, the emergence

of new technologies and processes is one of the best ways

packaging suppliers can differentiate themselves in what

has become a bustling market.

What can you do?

Doing your bit - no matter how big or small your company - to

stand out from the crowd can be a huge step in conquering

this battle. Whether taking a new approach or simply backing

a bid to be more green, making noise in your market and not

following the crowd can get a real buzz started about your

company, even if just for a small number of buyers, the fact

that they share your values will create very strong loyalty in

an industry.

Take a look at your current offerings, how can you branch out

or enhance them? Don’t be afraid to get your team together,

particularly those that get up close and personal with your

customers, and pick their brains for ideas and suggestions.

And don’t forget to tell the world about your innovative streak.

If your product is sustainable, shout about it. If you’re doing

something differently from the rest, tell the world. Even if

you’re encouraging interaction on social media, tweet, share

and like to your heart’s content.

5 5 % O F G LO B A L C U S TO M E R S A R E W I L L I N G

TO PAY M O R E F O R P R O D U C T S P R O V I D E D B Y

C O M PA N I E S C O M M I T T E D TO P O S I T I V E S O C I A L

A N D E N V I R O N M E N TA L I M PA C T.

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NO VISIBILITY INTO ACCOUNTS

A lack of visibility into your accounts can be a killer for even

the most seasoned of companies. Not being able to spot the

movers and shakers within your customer base can have the

most detrimental of impacts on your bottom line. A lack of

visibility will make the lives of your salespeople much, much

harder too.

Losing one single product line to your competition can

be all it takes for it to become a problem, giving them the

opportunity to build relationships with your customers and

start eroding away at your revenue.

With little-to-no insight into shifting customer accounts, sales

can become a haphazard job carried out on a wing and a

prayer. Visibility’s not only beneficial to your salespeople, but

is valuable for every corner of your business. Management

can monitor the sales pipeline, finance can forecast with

accuracy and marketing can plan ahead for any peaks or

troughs in demand.

What can you do?

Spend some time doing your homework ahead of your next

sales call. Check your company’s CRM (if you have one)

and get yourself up to date. If you don’t, spend some time

looking at their past order history, call notes and make sure

you have all of the information you might need to hand. This

will only stand to put you in good stead for your next call and

it will also boost your confidence no end.

If you don’t already have one, a CRM tool can really transform

your approach to sales and can make your conversations

that little bit more personal. How was their holiday to Costa

del Kent? How was that round of golf last month? Opening a

sales conversation with a bit of friendly chat will make for a

much warmer conversation with your customer.

Forget the “umm’ing” and “err’ing” and the “I’ll have to check

with XYZ and get back to you on that one” when you next

talk to your prospect – you’ll be able to make sure you have

everything you could possibly need at hand.

Not only will this insight allow you to develop lasting

professional relationships with your customers, but you’ll also

be able to consult them on things such as the practicality,

technical issues, quality and functionality of your products.

Any customer feedback is helpful and can help to both

inform and inspire your next lightbulb moment.

LO S I N G O N E S I N G L E P R O D U C T L I N E TO YO U R

C O M P E T I T I O N C A N B E A L L I T TA K E S F O R I T TO

B E C O M E A P R O B L E M .

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LACK OF CROSS-SELLING

Cross-selling is one of the simpler ways to win a price war.

If you produce cardboard boxes, chances are you also sell

the tape and filler to go with them. The current lack of cross-

selling in the packaging industry is an opportunity to win

back some customers from your competition with irresistible

deals that really pack a punch.

The packaging industry is a dream for cross-sells, bundle

deals and bulk discounts: boxes and tape; bottles and shrink

wrap; bubble wrap and filler. With so many matches made

in heaven, it begs the question, if your customers are buying

their cardboard boxes from you, but not the filler to go with

them, where are they getting it from?

Cross-selling makes for a more personalized experience for

your customers, incentivizing them to spend that little bit

extra with you and also showing them that you care and think

about them in depth.

What can you do?

Amazon are the kings of the cross-sell. Buy a new coffee

machine, they’ll no doubt offer you the coffee, filters and

mugs to go with it. It’s the automated, modern-day version of

a well-oiled machine. Attributing over 35% (predictableprofits.

com) of their sales to cross-selling, it’s a proven technique to

get more share of your customer.

If your customers can get everything they need from you,

they’ll have no need to go to your competitors. While you

might not have pockets as deep as Amazon to implement

the kind of software that can keep an eye on your product

range and match up complementary products, a simple

look back through your customers’ buying patterns can be a

game-changer in itself.

There are tools available that can make every single one

of your salespeople cross-selling superstars. Business

Intelligence tools will mine your data and reel off the easy

cross-sells your sales team should be discussing with your

customers. Then all it takes is a bit of sales charm and you’ll

be making smart sales left, right and centre. T H E PA C K A G I N G I N D U S T R Y I S A D R E A M F O R

C R O S S - S E L L S , B U N D L E D E A L S A N D B U L K

D I S C O U N T S .

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ZERO ADDED VALUE

Competing on cost alone won’t get you anywhere in today’s

bustling packaging market. The sheer amount of competition

within the packaging industry means it’s easy as pie for your

customers to switch supplier.

Even if you win a battle on cost and gain a new customer,

soon enough your competitors will be ready to undercut you

at every corner. One of very few ways to remain front of mind

is to emphasize value at every opportunity you get.

As customer expectations in every industry continue to get

higher and their demands of you get more complex, bringing

your ‘A game’ will be the only way to stay at the forefront of

the market.

What can you do?

Working in sales means making money. Right? Wrong. To

make sure you’re fostering lasting, fruitful relationships with

your customers, you need to become someone that they can

rely on. Not another cog in your money-making machine.

The added extras and value are often what keep us, as

consumers, going back to a particular supplier for more.

Every call doesn’t have to be a sales call, but instead a way

to check in with your customers, share interesting news, spill

all about a new product release and see if they have any new

problems that need solving.

When it comes to the packaging industry, offering a range

of freight options, holding a reasonable amount of stock for

those last minute rush deliveries and even managing your

lead-times so orders can be churned out sharpish can all

help to add that little extra value to a sale.

YO U R C O M P E T I TO R S A R E R E A DY TO U N D E R C U T

YO U AT E V E R Y C O R N E R .

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REACTIVE-SELLING

Packaging suppliers can no longer sit back and twiddle

their thumbs waiting for customers to come knocking. Being

proactive in your approach to scoring a new customer or

even keeping existing ones is a must.

In a reactive business world, your customer can dictate the

entire relationship. In the packaging industry in particular,

salespeople are relying wholly on customers reaching out

to place an order.

By getting in touch first, it’s more than likely that they

are ready to buy, regardless of your sales patter. They’ve

probably already made their mind up, they know what they

want and they don’t want to be sold any added extras. This

in itself limits the ability of your salespeople to cross, switch

or up-sell them.

What can you do?

Given your customers’ and potential customers’ wealth of

options when it comes to packaging choices, being proactive

is the only way you’re going to stay afloat. Being proactive

however, demands a certain level of product knowledge, an

insight into the market and customer challenges.

Supplying your team of salespeople and those in customer

facing positions with the information they need to be more

proactive in their selling approach will stand them in better

stead to secure repeat orders on the spot rather than

waiting for customers to fall at your feet. Simply looking

back through your customers’ order history can be insight

enough. If they’ve bought shrink wrap from you for the

last 11 consecutive months, but haven’t yet bought on the

30th of this month – chances are, they’ve sloped off to your

competition.

Or, get a business intelligence tool that can do all of this

legwork for you!

With this know-how under their belt, your salespeople will

be fully primed ahead of their next interaction with their

customers and can proactively get in touch before it is too

late and your competitors move in on your patch.

Don’t forget about your delivery drivers too – they can be

order takers in their own right, so empower them to make

proactive sales and provide outstanding service. Delivered

a few pallets of cardboard? Offer a free sample of filler or

bubble wrap to go with it. It’s often the little touches that will

keep your company front of mind and the first they go to

when they next need to make an order.

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ABOUT SALES-I

sales-i is sales performance software designed to make

every sales call more personal and profitable.

sales-i enables sales professionals to clearly identify and

target high quality sales opportunities within their current

customer base. Equipped with customer buying behavior

alerts, salespeople can make insightful, personalized, quick

business decisions, realizing repeat sales, reduced customer

attrition and maximized profit margins as a result.

sales-i will change the way you sell. Get in touch for a free,

online demonstration and judge our software for yourself.

tellmemore@sales-i.com

www.sales-i.com

We are the leader in sales performance for packaging distributors and wholesalers.