Pricing variable-data is not Voodoo: demystifying the unknown, layering the job, cleansing the database, testing the elements, proofing the logic, printing the run, fulfilling the contract and making money

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When you ask the users of variable-data print engines how they handle pricing the most common answer is, "Whatever the customer will pay!" And, of course, they are right. But there are different strategies to approach the pricing of these projects so the customer is almost eager to pay for the value of your service.

No single approach will work all the time because the applications will be as varied as they are complex. The key is in knowing your internal requirements and your customers' expectations.

A multi-tiered approach

Variable-data print projects can be broken into distinct layers. The first is the set-up, which includes data cleansing, postal sorting, page layout/design (number of variable elements per page), program design, testing and consultancy. The more complex the job, the more the up-front costs to prepare it.

The second layer of pricing is related to the number of pages that are produced, which then can account for material usage and handling. This is primarily an issue determined by the size of page, type of paper and amount of colour. Additionally, consideration will have to be made for finishing (cutting, folding and binding), fulfillment and warehousing. This is usually the easiest part for the printer to estimate and price due to their familiarity with the basic processes. It can get more complex when the variable-data printed pieces are combined with off-the-shelve components, in a pick-and-pack application. The costs are easily defined and can be readily calculated with accuracy.

Another layer that is placed on top of these segments is the most complex of all, which is the value proposition for the end consumer of the project. The value proposition is considered in pricing the turnaround time, the added projected revenue and the increased customer satisfaction. It is in this layer that the producer of the project must be completely aware of customer expectations. And this is where the complexity lies.

Evaluating the project's pricing requirements for return

During the estimation phase, it is extremely important to have the input elements clearly defined, to evaluate their condition. Is it necessary, for example, to have the database cleansed? Is the database provided in the necessary format? Are multiple databases going to be used? What is the number of variable fields in the job and number of variable elements to use for each field? Who is responsible for the design and layout? What is the level of consultancy required and how is testing/proofing going to be accomplished to verify design concept and database utilization?

The price for cleasing the database is most often determined by the number of records. There is a charge of X placed on each record and you multiply the X-charge by the number of records. Most printers are ill prepared to address this, so it is best to out-source this requirement to an organization that specializes in this service, such as a mail-list company or a database company.

To bring this service in-house, the printer must have a significant volume to support the individual assigned to the task. Database preparation is typically found in a mature variable-data print organization due to sophistication and volume of work. It is not a capability that a new installation will have available internally or should be expected to have.

Many variable printing organizations supply their own design services, which is the most efficient way to be organized to take full advantage of the technology. It is the general trend in the printing industry as a whole. Understanding the capabilities and opportunities that variable-data printing offers is not a talent that most designers have. They have not been trained, because, after all, there is nowhere for them to be properly trained in its use.

More and more printing organizations bring design in-house so that they can fully optimize the print communications manufacturing process. The pricing of the design process will be very similar to conventional print design. There is already a premium put on the design process by nature of having the added price of using the variable elements. Therefore, the organization will receive additional revenue for each time they create a variable-data print job because of all the processes that must be accounted for. Some organizations put a slight premium on their design services for variable-data print jobs, but it typically is not beyond 10 to 20 per cent of conventional print design pricing.

One approach to determine part of the set-up costs is to price each variable field and element separately. So, if there are five fields with two elements possible for each field, the number of potential elements is ten. If you charge $70 per element, then the total price for ten elements is $700. This is just the price for programming the layout with the logic that is required to access the elements - a general estimate on how much time the programming will take multiplied by your chargeable hourly rate. This will be added on top of the cost of element selection and/or generation (in situations where the element must be written, drawn or photographed).