Published in:
Printing Industries of America, Inc., Sales & Marketing Advisory, July/August 2001
There's increasing evidence that print and graphic arts suppliers are being divided into two camps by the market: 1) those who constantly pursue understanding their customer's business for purposes of creating additional perceived value on a proactive basis and 2) those who do not understand their customer's business beyond print specifications and are subsequently reduced to a reactive, "low price wins" market position.Whether you look at West Coast or East Coast print suppliers, about 35 to 40 percent of our industry's companies are quietly working day and night to fulfill customers' requirements, while the other 60 percent or so are starving for work.
Why the difference in company performance? Acceptable print quality, on time delivery, and competitive prices are no longer valid qualifications for work to be awarded. Those performance qualities are expected and have become conditions of sale.
Instead, creation of value in such evolving market conditions increasingly occurs outside the product through development of valuable, customer-specific services and information. Of course, this first requires in-depth understanding of the customer's business.
It also follows that customer-oriented print organizations (versus product or low-price suppliers) recognize, from the senior management level on down, that building long term customer relationships exists as an increasing market opportunity.
The driving influence? Buyer organizations are under increasing pressures to use their suppliers to improve performance. Buyers must evaluate more than price -- they analyze what they receive for what they're spending. The preferred, sustaining supplier is required to explain the performance value of what they provide in buyer organization performance terms.
An Overview
If we look at this evolving market from a 10,000 foot altitude, we recognize that building long-term buyer-supplier relationships, on a customer-by-customer basis, substantively derives from constantly gathering information about the customer's business conditions, then using that information to create value. I say "constantly," because a customer's working environment is, in general terms, moving just as fast in terms of changing conditions as our own companies.
Too often we become seduced into thinking everything is OK purely because orders are still being awarded to us. To add to the confusion, it's the buyer, who to avoid any confrontation or an ugly scene, proclaims, "You just weren't competitive any more." Yet, the evidence exists in almost every graphic arts company that when a buyer organization wants to keep a supplier, they know how to guide the supplier in.
In such an evolving supplier-buyer environment, it follows that there's also a changing profile of what a business development department or person does for building value for and importance with the buyer organization.
With this changing background, let's look at three converging dimensions for creating value for the buyer's organization: gathering and using information, improving use of time, and improving buyer organization productivity.
Information
Customer information to pursue can cover a wide range of issues. Information that's relevant and useful is different for each customer and customer market. Seldom does one source have all the information that's useful. Over time, you'll intuitively come to understand what types information are useful for each customer, sources for that information, and how to follow-up.
The supplier who doesn't know his/her customer's business performance direction, goals, and short term performance objectives is reduced to a reactive supplier position. A few additional examples of target customer information often worth pursuing include the customer's market differentiation, business development strategy, sources of new customers, changing profiles of new customers, goals and ambitions, trade shows and conventions, products and services, sister organizations, channels of distribution, and communications.
Take the time to read their current sales literature, recent published articles, and trade reports. That should at least allow you to get started, perhaps even serve as an agenda for the next series of educational sales meetings.
But lest we get bogged-down in gathering customer information, we need to keep our eye on the focus of creating value in our company's name through orchestration of available resources as a result of the information we learn.
Gathering, interpreting, and disseminating customer-specific information is an increasingly useful professional skill for creating long-term customer relationships. As your customer's business environment is constantly changing, information that was relevant last year, last quarter, or even last month needs to be updated.
Time
Buyer organization time is increasingly precious and recognized to have value. From organizational downsizing, increasing frequency of changes, and compression of time, buyers have less time to deal with and educate suppliers. If the current or prospective supplier doesn't demonstrate understanding the buyer's environment, a competitive edge opportunity has been surrendered.
Evidence of this is all around us. For instance, sales reps might be successful obtaining a first appointment but subsequently have difficulty obtaining follow-up appointments.
The supplier organization has too often failed to recognize that the buyer, with too little time to accomplish all that's expected within his/her organization, is evaluating the prospective supplier with the rep's first sales call. Buyers ask themselves, "Is there anything from this supplier that I need and don't already have?" If the answer to that question is "No," then subsequent appointments can be close to impossible to obtain.
This evolving buyer qualification of prospective suppliers, driven by the increasing value of time, again underscores the need to gather information about the buyer's organization -- even before calling for an appointment and certainly before making the first on-site sales call.
In fact, increasing the perceived value of the buyer's time to be invested with a prospective supplier, in effect, increases the perceived value of the supplier.
Productivity
A corollary to not wasting a buyer's time is increasing the buyer organizations productivity. This can be accomplished simply through requiring the buyer to spend less time supporting the supplier's performance for the buyer organization. Examples are almost limitless, require understanding the buyer's environment, and ultimately generate increased perceived value for the supplier organization.
Examples for increasing productivity of the buyer organization can include: providing management of complex print projects (whether or not the product is produced in the coordinating supplier's plant), managing the buyer's digital images (also known as digital asset management), becoming a one-source supplier, and providing services that support the buyer organization's business performance.
Examples of such services can include but are not limited to: support of trade shows and conventions, storage and fulfillment (including items beyond print), sample and kit assembly, and providing timely (e.g., 24/7) information concerning status of projects, budgets, paper market projections, and ongoing reviews of how to improve project costs.
Summary
The essence of this evolving marketplace is that measuring changes in market print demand is not the focus for suppliers who want to be in control of their futures.
Changing market conditions, from the buyer's position, continue to create opportunities for creating perceived value. But the nature of perceived value continues to shift and evolve from a print product (and low price) to additional information, less time, and increased productivity for the buyer's organization -- in effect, everything buyers receive that's valuable for what they're spending.
And it's the astute supplier senior management who understands that creating perceived value on those evolving customer values is a supplier organizational issue and not just a sales rep issue.
