Published in: Printing Industries of America, Inc., Sales & Marketing Advisory, April 2001
Many printing companies are asking themselves what happened to all their business and what should they do differently to overcome the challenges of uninformed, blood-thirsty buyers, the Fed, and the growing influence of the Internet. We've poured our energies and thinking into new technologies, equipment, financing needs, and managing compressed (and often unrealistic) production schedules to the extent that understanding and proactively serving buyers' changing needs have become lost.
While business development has always been important intellectually, as illustrated through generous-to-outrageous sales commission programs and one-day fix-the-team seminars, our industry's overall growth has allowed graphic arts companies to prosper – often in spite of themselves. That is to say, the printing industry's growth has allowed organizations to focus on internal, performance-related issues and neglect or exclude understanding customer-environment conditions. Business development seems to only become an urgent priority when market or economic conditions temporarily stumble.
However, the convergence of changing buyer and economic trends now occurring leads most observers to acknowledge that this time, something's different. Buyers are increasingly more difficult to contact; new customers of any magnitude are won with decreasing frequency and increasing costs. Suppliers continue to be consolidated by overly aggressive buying organizations, and growth of lower cost technologies and "wrap-around" additional services has had the combined effect of increasing competition, while also lowering prices. (As one observer complained, "This is the only industry I know where a company owner will invest millions to sell at lower prices.")
Continuous business development, at its best performance level, is not a person or a department, but rather an organizational and cultural mindset. Let's took at some options for improving business performance that most companies either overlook or passively choose not to exercise.
Developing suppliers
Suppliers to graphic arts companies often have little more than a clue as to what their target customers are about. They know what is bought in terms of specifications and dollars but don't often understand the market direction, ambitions, or focused differentiation of their customer.
Additionally, supplier customer contact personnel are seldom trained to purposefully create and use information resources to build perceived value with select customers. Wouldn't customers find value in information like expected paper market conditions for the next six months, recently developed software upgrades for managing customers' electronic files, and technical and production comparisons of competing technologies or equipment models? Usually, when this type of information is generated, it is written from a "features" and not a "user benefits" perspective.
As an alternative, what's the potential payback to once or twice a year hosting a "suppliers' evening?" Format can include two hours or so of presentations by senior management, concerning issues like: where we're going, what we're experiencing, and what we want to be known for (and why); what we accomplished with your help and assistance last year; and what we need and expect from suppliers this coming six to 12 months in terms of advice, education and training, and market-related information beyond what we buy from you.
As another alternative for developing suppliers' contributions to client's performance, regularly conduct supplier surveys for several of your clients. The focus of these fact-finding processes is to uncover additional resources that can contribute to the client's business performance. You can uncover education and technical training resources, recently developed market trend information, volume purchase discounts not previously recognized, new production capabilities, and product storage and consignment opportunities not previously made available.
The net effect of these examples is that the graphic arts organization that does a better job of tapping its suppliers' resources for benefiting its personnel and customers has elevated its perceived value to target customers.
Measuring key indices
Analyzing and understanding customers' changing business activities is a process few companies track. It's often a revelation when reviewing a client's "no sale" accounts for the last 30, 60, and 90 days and this year versus last year. Review of this type of customer performance information usually leads to pertinent questions like "Who's assigned to the account and what do we know?" and "Has anyone contacted them and how should this type of information be reviewed?"
Other examples of key performance indices to systematically review include: changes (read that as "reductions") in order of size over the last 12, 24, and 36 months (and the implications for increasing order entry resources); changes (reductions) in job processing time; estimating hit ratios by sales rep and customer; combinations of additional services bought with associated gross margins and value-added ratios; and changes in gross margin and value-added ratios, as identified by customer and account executive. Such reviews need to constantly ask not only what happened but why. It is the understanding of why that can lead to insights and better business development directions to take.
Also, check to see how your use of outside suppliers impacts your company's productivity and on-time deliveries for customers. For example, with today's compressed delivery schedules and complex digital files, that avoidance of using outside prepress service bureaus and outside binderies because a company already has a full-blown electronic prepress department is not only counterproductive but borders on clinical insanity.
Customers expect improved supplier performance and not the same as say, last year. Good customers are not only harder to come by but are the difference in a graphic arts company having a future. Yet, too many suppliers can be observed refusing to use an outside supplier because of the cost, while experiencing both idle equipment, waiting for a late proof to be returned and a late customer delivery. Too few companies work to even track their on-time delivery performance, much less review and analyze its impact on customer retention.
Answers to these and other performance indices questions can lead to subtle but profound understandings of who you work to develop and who you don't, because increasingly, all customer revenues are not of equal value.
Researching select markets
Selection of target prospects to develop represents some of the most important decisions made in a company. In effect, an organizations future depends on how such qualitative decisions are made. Yet, many graphic arts organizations don't know that resources are being committed to developing a certain prospect – until an order comes through the door.
Don't ask, "What business do we produce best?" Those answers can take you in exactly the opposite direction you need to follow. Rather, look for evidence of which customers you are most valuable to and what your most important customers need and are frustrated about that you can affect. Such a focus leads to opportunities to elevate your value as a supplier and opportunities to reduce pricing pressures while increasing the predictability of future work.
Many professionals need to learn how to research their target prospects or customers' business. Why not try going to a local library and working with its information resources to uncover a target prospect or customer's business development needs and how that target prospect could better use their production capabilities to improve its business performance?
Summary
Partly because of organizational downsizing and improved workflow efficiencies, buyers' skill sets have become primarily strategic, rather than tactical – purposefully serving their companies' business performance – not just procuring important products and services.
To support an effective collaboration with a target customer, a prospective supplier's internal and external communications should focus on serving each customer's unique needs. Supplier contact personnel require non-stop training and education on how to better understand their customers' business performance needs to effectively utilize available resources to improve their company's perceived value, as a supplier.
