A Paradigm Shift of Foundational Proportions
Published Articles
Published in: IPA Bulletin, March/April 2009
But when will industry leaders get it? Only if and when they do will our industry's economic performance become viable long-term.
Three clients, whom I can identify, have had to hire additional people and have operated most or all weekends - since the first of the year. I know all three organizations well, and can testify that they are different.
Improve Customers' Economic Well-Being
Business development is not just a phrase or mantra, it is who they are - and not just for their organizations but, pointedly, for their customers!
In effect, each of these organizations, in their respective customer markets, are working to improve their customers' economic well-being - understanding that this central focus is the primary reason they exist as an organization.
Proposals, developed by sales representatives, focus not so much on price per thousand (though inclusion is required) but rather on how they expect to make an economic contribution to the customer's bottom line - including the customer's long-term strategies and objectives. Proposals also include capabilities for managing the customer's overarching needs, which go beyond the current project, explaining why they - as the preferred supplier - are the better choice long-term.
For example, a retail chain (any retail chain, please!) wants increased traffic and revenues in these economically depressed times. A smart print-on-demand (POD) supplier, who knows how to think beyond ink-on-paper on behalf of his customer, might ask for the worst performing division and the worst locations in order to prove his ability to make a difference in performance. From that overview, if a computer program isn't already available, it is simply a matter of computing comparisons:
- Did revenues and promoted items create new revenues from folks who received the promotions?
- Did new customers become repeat customers? and
- Did any of these customers who bought promoted items buy anything else?
This simplistic model is appropriate for almost any for-profit and nonprofit business model!
These sales representatives have been taught to research in-depth the customer's business and business model before ever calling for an appointment. They are taught by an industry-specific trainer how and where to research and how to make the first series of contacts, which are not to the print buyer. And their first senior management contact with the target account - often the director of marketing - quickly recognizes this supplier is different and needs to be brought closer.
Business Development In Action
In this article, we will review only one of these three clients, and then evaluate ourselves to look at the bigger picture in our conclusion.
The overview is that this client supplies retail chains, higher-education, and commercial publications with POD, web-to-print, database management, direct mail, storage and fulfillment, and a wide assortment of print capabilities. Twelve years ago, this organization's revenue were under $300,000; this year their revenues are expected to exceed $8,000,000.
At least three major accounts have come to the president (the one person who can make meaningful commitments to the organization's resources) in the last six months and asked for reassurances they could count on this supplier for increased work and support for the customer through print and related services (again, storage and fulfillment, database management, web-to-print, wide-format, POD, etc.) for 2009. The customers did this even though they were cutting back budgets elsewhere.
For the small college, which is a nonprofit organization, with a student body of barely a thousand, a consolidated and increased print budget of $350,000 was being committed for 2009 - to this one supplier. Allocations of this budget are going to:
- Improved brand imaging of print materials;
- Significantly improved student recruitment;
- Improved alumni relations - and contributions; and
- Improved development revenue for expansion of academic and student life programs.
For the retail chain, one region and one division after another had tracked their revenues resulting from personalized, targeted print. In region after region, in product group after product group, personalized and targeted print has economically proven to:
- Generate additional traffic into stores (that had never before been seen in those stores);
- Generate multiple purchases of items that were not promoted; and
- Generate repeat sales and even referrals that were tracked, and reported.
With that kind of return on investment, it is easy to understand why this retail conglomerate is moving this supplier into other divisions, with broadening product lines and additional programs; and while facing cut-backs on budgets in general, is increasing their budgets for print and related services from this supplier for 2009.
Economic Upheaval Creates Opportunity
I recently spoke at a national association conference, and subsequently facilitated a CEO Peer Group at two major POD suppliers plus a half-day visit to a major graphic arts campus that everyone reading this column would recognize.
At all four events (the association conference, two major POD suppliers, and the major graphic arts school), discussions were predominantly focused on technology - not customers' commercial needs for print and print-related services.
One of my observations is that whenever there is a radical change - particularly radical economic change - there is also significant opportunity being created for someone; and the challenge partly is to ask, "Who needs help?" From my narrow view of the world, our industry has generally missed the financial decimation of nonprofits and the fact that print, in general, and POD, in particular, are the primary means for fundraising for nonprofits.
When I asked at both POD suppliers, "Do you have anything in particular that demonstrates non-profit organizations' need for and how to use POD for increasing their economic performance given today's economic conditions?" The answer from both was, "No, not at this time."
Is anyone surprised? They thought our visit was about their fabulous technologies, not about how to use their technology to assist customers!
Where's the dog to kick?
My opinion is that when members and association boards relentlessly demand useful information on how to be effective with target customer markets for increasing the use of print and print-related services for increasing the customer's economic well-being, then and only then will our industry's economic performance become viable long-term.
At this time, however, too many organizations in our great industry are "getting their seed corn" and not recognizing that until they change how they see their business - for improving their customer's economic well-being their bottom-line performance has little probability of improving.
This is not about "reaching your target customer or audience." It's about improving your customer's economic performance. If you don't know your customer's business and business model, then you understandably cannot go forward, yet. But that's where I recommend you start.
A significant resource for researching nonprofits can be found at www.guidestar.org.UNDERSTANDING MARKET NEEDS
There's too little being offered as meaningful direction from industry leaders for where and how to focus on understanding what target customers markets need - and how to use our technologies to improve customers' economic well-being.
For instance, nonprofits (and from examples in the article, it should be clear we are not just discussing applications for nonprofits) have been decimated by recent events in the financial markets. Yet, print is second only to "personal contact" for fundraising purposes. Information from the Council for Aid to Education, published February 25, highlights the market needs of educational institutions:
Income from endorsements support a major part of many institutions. For example, The Wall Street Journal reported on February 22, that Stanford's endowment (which is in the top 20, mentioned above) is expected to decline 20-30 percent this year. Additionally, income from the endowment makes up 28 percent of Stanford's operating budget.
- Giving to the top 20 academic institutions was up 11.5 percent
- Giving to all other institutions was down 4.2!
- Of the more than 3,000 institutions of higher learning, the top 20 typically receive over 27 percent of total contributions!