Published in:
PrePress Bulletin, January/February 2002
Do We See Ourselves?
When will we get out from behind our desks, and out of the safety of our offices and plants and go visit our current and potential customers to learn what they're struggling to accomplish?
Lunch with two graphic arts buyers from a major manufacturing company in the Carolinas left me asking myself, "How do we get the word across to our industry's organizations?" As no small footnote, these two buyers had asked me to take them to lunch, saying, "We need to talk to you!"
While we're all in the midst of a soft economy, the budgets for this particular buying organization have remained in multiple seven figures -- in several categories -- with four full-time buyers. And because of their unusually wide range of needs, this manufacturer still uses multiple graphic arts and fulfillment suppliers.
During lunch, each buyer openly complained about current graphic arts suppliers not being able to execute the most fundamental requirements. They were also unhappy because their sales reps were not able to follow up and deliver what had been promised or was clearly expected.
Where's the leadership to chart the course, to organisationally (and as an industry) show us how to understand and generate alliances that can create perceived value by increasing a target customer's revenues and productivity?
Now, I'll grant you that neither of these two buyers are what I call "typical." Each buyer has previously sold high-end commercial printing, and they both volunteered that they were now working for a company that is unusual in its management disciplines. For instance, as graphic arts production managers, they are each required to map out internally, in writing, each procurement project in terms of both specifications and detailed, expected production timelines -- before they can obtain final budget approval or begin working with a selected supplier.
Their primary complaint: "We increasingly can't get many of our previously reliable suppliers to do what we've asked, in writing -- that they've already agreed to do. Interestingly, we don't hear back from the supplier's rep or CSR when something's wrong or isn't as expected. Is something changing in how graphic arts companies are operating? Has something changed recently?"
If this kind of disappointment is being experienced by a major graphic arts buying organization, what's being experienced by the smaller, average customer? (If you think this isn't you, please read on.)
From the Top
Yes, something has changed. In a soft economy that's not expected to "pull out" or "come back" quickly, graphic arts suppliers appear to have organizationally gained an extra dimension of panic or paralysis and lost sight of the central purpose of our existence -- to organizationally serve our customers' performance to the degree that they are enthusiastic about our being their supplier!
It's my observation that key personnel appear to be practically hiding in their offices and production and administrative positions, and not getting out to where the real "heavy-duty lifting" is occurring -- in front of demanding customers.
When was the last time your production manager, company president, or technical director accompanied a sales rep to visit a customer and purposefully discuss what the customer was working to achieve? When was the last time your lead financial person visited a customer along with a sales rep, or wrote a personal letter to thank a customer for prompt (or usually prompt) payment practices? And when was the last time the president discussed your company's differentiation in the market with one or more sales reps, and followed-up by personally initiating an appointment to a treasured customer(s) he had not seen in more than a year?
If any of these or similar conditions are recognizable in your company, you're predictably incurring significant opportunity costs that stretch far into the future as a result of buyers consolidating suppliers.
An Effective Strategy
My persona! rule of thumb? As a minimum, each key person in a production or administrative position, including CSRs and estimators, must invest a half-day each month in front of customers with a sales rep. That's the minimum. There are few other effective strategies that both reliably and organizationally create a common, focused, customer-oriented understanding that works to ensure development of perceived customer value company-wide.
Through such a strategy, we gain an organizational understanding of customer and marketplace conditions and issues. Through such a strategy, we can create organizational empathy and meaningful support for what our sales reps are confronting. And through such a strategy, we can create an organizational focus -- and urgency -- for what's expected and needed, no matter how outrageous or demanding.
Problems relating to organizational focus, sense of purpose, commitment, and follow-through are created from lack of understanding of what's expected and why. Persons who see their positions exclusively in terms of internal production requirements are missing a critical element of understanding: "What does the customer expect and need?"
On returning to my office from the luncheon, I called the CEO of a client company who had been mentioned by the production buyers in the critical review. His almost-too-quick response when I simply mentioned the buying organization's name, "Oh yes, we recently met with them after an unfortunate incident, identified the problems, and sent a letter containing our follow-up findings along with detailed corrective actions we'd taken."
Further questioning revealed that neither the CEO, production manager, nor CFO had visited the buyer's location with the sales rep to personally review the problems. And as no small footnote, this graphic arts supplier is receiving less than 2 percent of this customer's purchases.
An Industry in Transition
Two years ago, an industry association executive asked me if the Internet was reducing graphic arts and print demand since he'd recently witnessed the demise of three members who collectively employed more than 300 skilled people. (Aside from the fact that I was flattered that he thought I might have the answer, I was aware that many times we can deduce the answer to a thorny, illusive question by asking other questions.)
I asked, "Of the 300-plus employees at those three member companies, how many do you believe had jobs back in our industry in less than 90 days?"
His response left me stunned: "That's interesting, because it's my opinion that more than 90 percent of them had jobs with other graphic arts companies in our area -- in less than 30 days."
My reflective response, "There's exhibit A to your first question. Graphic arts buying demand isn't so much decreasing, but buyers are having to decide which suppliers are really worth their time, and which aren't."
Two powerful driving forces for buyers' selection (and consolidation) of suppliers include:
- A need to work with as few suppliers as possible to recognizably impact their company's bottomline performance, plus
- Compression of time.
In today's demanding business environment, too many of our critically positioned personnel -- who are responsible for not only supporting a sales rep's effectiveness, but also the company's commitments to customers -- still believe that correctly printed product, delivered on time, at competitive prices, should win us future work... if the sales rep does his or her job.
However, we need to understand that major business paradigm shifts are continuing to occur from the customer's position that are molding the future of our industry. The fundamental supplier performance qualities of correctly printed product, on-time delivery, and competitive price have become "conditions of sale." They're expected.
As buying organizations have increasingly worked on lowering their cost of operations, with decreasing (and sometimes disappointing) results over time, a relatively new supplier performance quality is quietly being elevated, though it is not yet visible to many graphic arts suppliers.
Key personnel appear to be practically hiding in their offices and production and administrative positions, and not getting out to where the real "heavy-duty lifting " is occurring -- in front of demanding customers.
New Supplier Selection Criteria
The buyer's challenge: How can the supplier assist with supporting or increasing our revenues and productivity? As strange or foreign as that may sound, it's where our industry, our customer/supplier relationships, and the criteria for selecting suppliers are headed. (If you think it through, it's a natural and ultimate progression for meaningful "partnerships.")
There are significant (and organizational) implications and eventual requirements for suppliers in understanding: 1) the customer's business, 2) the customer's sources of revenues, and 3) how the customer's business works.
We recently conducted a customer survey for a client in which we asked, "Of the following corporate positions, which departments and positions noticeably influence or directly purchase printing?" Respondents could select: purchasing, finance, sales and marketing, CEO, MIS, and manufacturing. The number one response by a noticeable margin: sales and marketing! (As a footnote: sales reps from the client who sponsored the customer survey were tradition-bound in their customer contact patterns. They primarily called on folks who sign purchase orders, not folks who create the need for purchase orders.)
In today's soft economy, too many suppliers have focused on lowering their price per thousand to create value. This approach can actually have a detrimental effect on the customer. Print buyers who employ aggressive purchasing practices to reduce costs will frequently reduce their long-term returns -- and therefore fail to generate additional revenues or enhance their company's purpose for existing.
Ultimately, Wall Street and Main Street know that any company, no matter how efficient and economical in its purchasing or production practices, must have something of value to offer its customers -- with adequate resulting revenues from these customers -- in order to remain viable.
Having an impact on a buyer company's productivity or revenue stream must be the ultimate focus for graphic arts companies desiring to create meaningful perceived customer value.
Where's the leadership to chart the course, to organizationally (and as an industry) show us how to understand and generate alliances that can create perceived value by increasing a target customer's revenues and productivity?
If we're not focused on improving our understanding of our customer's business and how it works, how can we know what we should be doing to create elevated, enthusiastic perceived customer value?
Understanding and having an impact on our customers and their performance goals and objectives is not only important, it's becoming required. And not just by the courageous sales rep, but by every key position in our organization.
