1. “T“The market is more competitive today than ever
before. Some competitors are willing to do
almost anything to land an account or win an oppor-
tunity,” said George Moretti in beginning his AICC-
sponsored webinar on“18Ways to SellValue Instead of
Price.”
Sadly, “almost anything” usually involves cutting a
price, which often leads to a downward spiral and
declining profits and reinforces the notion of
corrugated as a commodity. But, as Moretti
points out, “there are always options when
[you are] faced with a lower price [from a
competitor].”
The first rule is“don’t get panicky,”he says.
“Things are not always what they seem.”
Moretti,who has more than 40 years of indus-
try experience and has both bought and sold
corrugated, added, “I get frustrated just like
you when a buyer tells me that the competi-
tion has a lower price than I do.But,let’s face
it. It happens all the time.”
To reinforce this last point, Moretti said that he was
building his own strategy of action to thwart such a
threat and would meet with the customer the day
after the webinar.
Calm, Cool and Collected
First, hold your fire, Moretti advised.“Listen to the
buyer, acknow-ledge and explore the data, and
respond later. Be confident that the customer will
respect you when you are calm and listen to them.”
Confirm all the facts, he added.“Is the competitor
running a larger quantity and warehousing the item
with weekly releases?” Moretti added. Check quantity
orders vs. released, service requirements, liner combi-
nations and flutes,and set-up costs.Ask your customer
to be reasonable and be reasonable yourself.
Demonstrate the difference between price and the
value of your product offering.“Remember, the more
value you can show, the less dependent the deal will
be on price,”Moretti noted.He added.“Always avoid an
argument.Talk customer benefits instead.”
Sell your company - its history, reputation, person-
nel,length of service and financial stability,he advised.
Conversely,resist the temptation to speak badly about
your competition.Look for connectivity between your
company and the buyer.Are both family-owned? Can
that fact provide your company with an edge?
Part of this “cool-headed” approach also requires
examination of the motivation behind the buyer.
Moretti advised his listeners to find out if the quote is
real; many a competitive price is named that was
never quoted by the competition.
Moretti suggested that boxmakers investigate:
• Is the competitive price real?
The White SheetJune 29, 2015 Vol. 31, No. 26
™An N.V. Publication
“Celebrating 31 Years”
The ONLY Weekly Publication Serving the U.S. and Canadian Corrugated and Folding Carton Industries
Moretti: Sell Value To
Counter Attack On Price
by Jim Curley
‘Remember, the more value you
can show, the less dependent
the deal will be on price.’
— George Moretti
Copyright 2015 • NV Publications

2. • Does it include everything?
• Does your competitor have a history of always
having the lowest price?
• Have you “met” the lower price before?
• Do YOU have a history of meeting the price?
One way to verify if the quote is real is to ask for a
written copy of the quote.That way, Moretti said, you
can verify the authenticity of the quote,but also check
the specifications (quantity, size, etc.). In the Q&A ses-
sion after the presentation,Moretti said that if the cus-
tomer is reluctant to share the quote of your competi-
tor, and you want to compare specifications, let your
customer black out the actual quote and give you a
peek at the specs.“It’s probably one of the strategies
of last resort,” he acknowledged.
If the quote is real, look for a vulnerable spot in the
price quote. “It is usually there somewhere,” Moretti
said. “Maybe the buyer may have just tried to get a
lower price by “asking.” Moretti admitted that as a
buyer he has gotten lower prices by saying“Gee,can’t
you do better than that?” He added,“Over 80 percent
of the time we’ve done this, we’ve gotten a lower
price just by asking that. It works.”
But, Moretti cautioned, “Be careful not to put the
buyer on the defensive with your ‘doubt’ of what they
are telling you.”
Apples And Oranges
Another way to gain an edge is to modify the speci-
fications.“Then you and your ‘cut-price’ competition
are not quoting the same thing,” Moretti said. He
advised his AICC listeners to take advantage of the
Association’s resources, notably its ‘askralph’ service
with paper expert Ralph Young and the second edi-
tion of AICC’s handbook on the key characteristics of
liner and medium and their impact on combined cor-
rugated board.“Sometimes you just don’t know what
your competitor is running,” he explained. “These
offerings from AICC will provide you with a tremen-
dous asset and will help strengthen your position as a
knowledgeable supplier to your client.”
Another issue to explore is the amount of inventory
your competitor will run.Moretti investigated the cost
of warehousing in the geographic area of webinar
attendees and noted that though a truckload of inven-
tory could cost $100 a month for space only, the cost
of money today is lower than it used to be.Investigate
the pros and cons of the complete costs of warehous-
ing.
Another tactic is to create your own“manufacturing
profile,”Moretti advised.If you have specialty gluers or
machines that will make small RSCs or very high-qual-
ity printing,sell to those strengths.“What do you make
better than the competition?” he asked.
Change The Specs
With your strengths in mind, enlarge the specifica-
tions. “This will shift the basis of comparison and
make it more difficult for your competition,” Moretti
said.“Offer something the competition does not have.
Can you offer on-line inventory management to the
customer?” he asked.“Can you ship some packaging
supplies the customer might need in the same truck
as your boxes?”
“Sell yourself,”was another Moretti tip.“Don’t under-
estimate this. People still buy from people they like. If
they like you, they’ll give you a chance.”
Check the specs of the product your package will
encase, Moretti advised.“Is it possible that you could
reduce specifications such as the dimensions of the
box to lower the cost?” he asked. A visit to the cus-
tomer’s plant and discussions with his production
team might provide the information you need to sug-
gest an alternative. Is the competitor using the same
specs as you are?
Regarding the visit, Moretti noted,“I’ve learned that
when you get to the point where you can visit the
plant, and that’s often very difficult, plan ahead of
time. Everyone on the plant tour has a role and a
responsibility. Someone on your team should be look-
ing at the packing area. Someone should be focused
Take advantage of AICC re-
sources, notably its ‘askralph’
service with paper expert Ralph
Young and the second edition of
AICC’s handbook on the key
characteristics of liner and
medium and their impact on
combined corrugated board,
Moretti advised.
Cutting your price forces you to sell more product
to make up for margin loss, Moretti pointed out.
How much more do I need to sell?
Copyright 2015 • NV Publications

3. on the warehouse.After the tour, go into a conference
room and present your observations.When you move
into that world, you’re in a ‘solutions’ world.Then ask
the customer if you can help him with his cost issues.
Not price, but cost.”
If you can, cite examples of how bad designs or low
prices may lead to more costs. Just make sure you are
familiar with the details of these examples, Moretti
added.
Conversely,is it possible you made a mistake in your
estimate? “If so, taking corrective action might make
you a friend,” he noted.
“Be flexible,”Moretti advised.“Meet the competitive
price if you have to,but know what the dollar loss will
mean to your profits.” Can you ask for more business
to make up for the lower margin? Finally, think of the
big picture. “What does the future look like dealing
with this customer?” he asked. “What happens the
next time?”
At the end of his presentation, Moretti provided a
chart that showed the effect of a price decrease on
your gross margin.Assuming a price cut of 10 percent
on an order of 10,000 units at a 25 percent gross mar-
gin,you will need to sell 16,667 units at the new price
to keep the margin dollars that you had with the old
price. He suggested that webinar attendees create a
spread sheet that will show the effect of a price cut on
margins.
Q&A
In response to a question about establishing the
ground rules for a discussion of the price cut with the
customer,Moretti said,“I will ask the buyer‘what is the
process if I come in with a higher price? What are you
using to make your final decision? If it’s only going to
be price and not total cost, I would like to know that
ahead of time before I propose a price.”Another ques-
tion you might ask if you are bidding on a competi-
tor’s business is, “Are you going to share this quote
with your existing supplier? If you are, maybe we
shouldn’t be quoting.” Moretti advised, “Try to get
‘what happens if’ on the table as soon as possible.”
Another question concerned supplier evaluation of
the customer, i.e., is he the right customer for you?
Moretti said,“When you are setting up a preferred cus-
tomer profile, you should ask,‘Does this customer fit
that profile?’ Sometimes, we are calling on the wrong
people. This may occur to you when your bids are
never competitive.Talk to your perspective customer
about whether you and he are a good fit.
“One of my philosophies is that you never have to
get out of a bad deal if you never get into one,”Moretti
noted.
© 2015 • NV Publications • www.nvpublications.com
Copyright 2015 • NV Publications