Published in: Printing Industries of America, Inc., Sales & Marketing Advisory, April 2000
Technology specialists, ratio-study experts, and financial roll-up wannabes may not like or agree with what follows. The focus of this article is on the most important and often unrecognized issue facing graphic arts organizations. It's not finances, and it's not equipment, productivity, or technology. It's what customers privately search for in suppliers, and what your customer-contact personnel need in terms of constant, formal support.
Business development competency, from an organizational perspective, must be a priority in the graphic arts industry if an organization is to remain strong in a dynamic business environment. Business development competency, at its best, is an attitude. Examples include the delivery person knowing his or her customers on a first-name basis, or knowing which deliveries are urgent and loading the vehicle accordingly. Examples include sales reps and CSRs exchanging notes about customers' changing needs and expectations on a timely basis. And at its best, it's a system of customer feedback concerning supplier performance and changing customer needs that is systematically shared throughout the supplier organization. The purpose: to increase the supplier's value to target customers.
Today's fast-changing environment requires a successful organization to perform with a singleness of purpose. For business development, an organization must constantly pursue and proactively manage customer-related information and changing needs for the single objective of becoming more important to that customer.
Sales and marketing used to be distinct activities and positions. In today's time-compressed environment, these functions should work seamlessly, managing customer-specific information to (a) bring the customer closer and (b) improve the effectiveness of the supplier organization. Organizational performance (versus sales rep and CSR performance) is required because buyers often won't change suppliers without meeting the "support team," including estimators, production managers, presidents, and even bookkeepers.
It's also not all that unusual in today's environment to hear an experienced buyer ask, "What is your company's direction, and what customers are you pursuing for future business?" We'd better have cohesive responses that make sense and match up to reality, because the odds are we'll only have one opportunity to answer such a question.
Background
America returned from World War II and controlled approximately half of the world's production. If you were in business at that time, people were practically lined up to do business with you. And you quickly learned to make money by controlling your costs and "producing what you produced best." (Most of us know that bottom-line performance doesn't work that way any longer.)
Additionally, sales and marketing were defined as distinctly separate disciplines. Marketing, for instance, was generally defined as advertising and promotion, and sometimes distribution. Too many of our business textbooks (and thinking) still reflect what drove success during this period. And the business rules for success developed in this period – that focus myopically on technology or finance – just don't work anymore.
Around the 1960s, supply and demand conditions shifted, and the scales tipped. In effect, supply began to exceed demand with subsequent competitive pressures. As a result, "compression of time" became the driving force behind almost every subsequent business condition change and competitive force.
A shifting focus
From this general period, producers and suppliers began racing some invisible, accelerating clock or scorekeeper to do more in less time. But the tools utilized for success were often defined according to the discipline with which we felt most comfortable. For instance, financial specialists might focus on issues relating to appropriate hour-rates or ratio studies, and thus control costs for faster, lower-cost production. (No new equipment has been accepted that produces a better but slower "dot.")
Also, technology specialists and consolidators have their equipment, technology, and merger and acquisition symposiums, with appropriately supporting promotional literature that more often than not over-promises and under-delivers. Roll-up specialists are sure their financial calculations for lowering material and administrative costs are accurate (their math is always double-checked). Occasionally they are (temporarily) right; however, more often, results don't match expectations. The general operating rule is "Tell them what they want to hear." As a result, a new source of qualified customers and employees for independent graphic arts companies appears to be from recently merged competitors.
A key question that should guide every technology or M & A decision: "Do our target customers receive more of what they want and need as a result of this merger (or equipment decision)?" In too many cases, they've received less. Again, we have to ask, "Are we serious or committed about the value and priority of business development to our future-beyond the current income statement?"
Throughout this wonderful, mystifying, and often neurotic industry called graphic arts, there have worked a short series of principles that only a few have practiced with quiet discipline and diligence. In so many words, creating customers and business to ensure our economic future is our most important priority, and every resource allocation and thought process should be connected to this focus.
Choices
A client recently invested in a high-priced plate system. He loved the technology for what it gave his pressroom and prep departments. However, I asked, "Can any of your customers tell the difference in what they receive from you?" And, "Would your customers prefer you add a storage, distribution, and mailing system?" My opinion is that the CTP system helped his company's performance, but from his customer's perspective, the storage, distribution, and mailing operation was far more valuable.
The issue: 'What our customers need and want should be a "driver" in every allocation of resources.
In effect, any management decisions – which impact who we need to become (and not just who we are) – are doomed if they don't make customers' changing needs a critical driver. An orientation and management focus on internal resources, to the neglect of customer needs and expectations, leads to disappointment. Illustrations include obsessions with technology, production, M & A, and finances. Another recent fad is the growing number of ISO-certified companies in our industry. But I've yet to experience an in-depth understanding or systematic explanation to customers of how ISO certification benefits customers.
What's required?
The question isn't, "What do we do best?" Bankrupt buggy-whip suppliers should have adequately proved to us throughout the turn of the century that the best suppliers of any product or service have no inalienable right to stay in business.
Our ability to stay in business requires us to be increasingly important to an adequate number of customers each Monday morning.
Behind this statement lies a universal truth for markets managed by customer supply and demand that should guide our business decisions and business strategy.
The more correct and important question may be, "What do our customers need assistance with that allows us to become more important to their business?"
Next month...
The increasing importance of differentiation, customer database, and tracking customer requests for building business development and bottom-line performance.
