Need a Compelling Reason – Ask Kodak!!!

Published on April 27, 2009

Create powerful value propositions for customers, as Kodak did, says author of ‘Lead, Sell or Get Out of the Way’  – Excerpt # 8 

When it comes to building a solid value proposition, you can find a lot less effective places to begin than identifying something your buyer absolutely hates about their current situation.  Imaging giant Kodak, for example, understood that the number one thing consumers hated about printing at home was the high price of ink. 

Kodak gleaned this important information by surveying and finding out that more than 80 percent of people who print consumers at home identified the price of ink as their primary dissatisfaction.  Kodak uncovered some amazing stories on this score: stories about parents hiding ink from their children to keep them from printing too much, parents hiding the printer itself from the children, and even people throwing away their printer because the ink cartridges were too expensive and buying another printer altogether!. 

What was giving consumers fits are the way the industry had decided to sell inkjet printers and components. The traditional way to market inkjet printers is to sell the printers at a significant loss and make up the profit later on ink sales. This causes people who don’t print very often to simply buy a new, cheap printer with ink tanks included instead of spending $70 or more on the cartridges alone. 

After hearing from its patrons, Kodak had a clear indication of the significant emotional toll all that expensive ink was having on customers. In response, the company took a leadership position by developing a revolutionary new business approach. Kodak launched a new line of all-in-one inkjet printers in 2006, and in doing so, launched a new way of thinking about printers. 

Kodak’s All-in-One printers, while competitively priced, are not the cheapest printers on the market. They are easy-to-use machines that produce extremely high-quality prints at roughly half the cost of ink when compared to traditional inkjet printers. In the United States, the cost of Kodak’s ink was $9.99 for black ink, as compared to up to $19.99 for competitors’ black ink cartridges – and $14.99 for a five-ink color cartridge, as compared to up to $57 for competitors’ color ink cartridges! This significant inconvenience of frequently changing print cartridges combined with the actual high cost of inkjet cartridges makes up the cost of the no change (CNC) portion of the equation for Kodak’s All-in-One inkjet printers. 

Here’s Kodak’s value proposition for its All-in-One printer. It involves a comparison of the cost of ink over two years based on average usage of a competing model instead of the Kodak printer. 

Cost of no change minus cost of change equals perceived value or CNC – CC = PV. 

CNC ($450 in additional ink expenses over the course of two years + emotional cost) – CC ($150 price for mid-range Kodak printer) = PV ($300 cash + significant emotional relief + not having to invest the time and effort to hide the ink and /or the printed from the kids).  

This formula only works in the salesperson’s favor if the CNC (cost of no change) is significantly higher than the CC (cost of change).  The buyer has to have a compelling enough reason to go through the trouble and expense of changing! 

To read this story in more detail and others, order your copy from Amazon today 

Kodak has also received awards for the advertising campaign it released at the end of March for this product line.—— 

Excerpted with permission of the publisher John Wiley & Sons, Inc. ( from Lead, Sell or Get Out of the Way: The 7 Traits of Great Sellers by Ron Karr.  Copyright © 2009 by Ron Karr.  

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