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BUSINESS MANAGEMENT

May 1, 1997 12:00 AM


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PRINTING REDEFINED The change in the international media markets will influence the 21st century decisively; in particular, the printing industry will face great challenges, asserts Hartmut Mehdorn, chairman and CEO of Heidelberger Druckmaschinen AG, Heidelberg Germany.

Studies done by Heidelberg indicate that the share of electronic media will increase, and by the year 2010, probably control 50 percent of the global media market. "With an overall expanding market volume, enhanced color copiers and color printers increasingly will penetrate the classical domain of the offset printer," predicts Mehdorn.

Moreover, the Heidelberg exec points to the worldwide ex-change of digital data through more powerful communication networks. These challenges must be faced with faster and more intelligent solutions from the printing industry.

"Those who resist change, will lose what they most want to keep," maintains Mehdorn. "Only those who can react flexibly are going to survive."

Increased competition will emerge as technology develops and printers must be prepared to deal with this pressure, claims Mehdorn. But the Heidelberg exec also points out that conventional offset printing, although declining as a percentage of the media mix, will be with us for at least the next 25 years. "The performance of electronic media will increase dramatically until 2010. We must move now to redefine printing," concludes Mehdorn.

INVESTMENT STRATEGIES 1997 should be a big year for equipment vendors, as many printers claim they are planning to invest in new equipment or expand their plants. Panelists of the Printing Industries of America (PIA) Quarterly Print Market Survey were asked about their plans for 1997 and how much they planned to invest.

One out of two of those printers surveyed plans to purchase press equipment, with 60 percent of these purchases estimated to cost more than $100,000. An additional one out of two expects to purchase finishing equipment, but only 21 percent anticipate it will cost more than $100,000.

Two-thirds of the printers queried expect to purchase prepress equipment (26 percent plan to invest more than $100,000). Finally, 28.7 percent are planning plant expansions, with almost half looking to invest more than $100,000.

For more information on economic issues, contact PIA's Craig Price at (703) 519-8144.

For additional information, please refer to the chart on page 10 of the May 1997 American Printer.

NEW CLASSIFICATIONS FOR QUICK PRINTERS The long-awaited decision by the Dept. of Commerce and the Census Bureau to allow the quick print industry to remain in the manufacturing section with its own classification code has met with preliminary approval by the U.S. Manufacturing and Mining Subcommittee of the Economic Classification Policy Committee (ECPC).

The ECPC has established new definitions, as follows:

Quick Printing--Establishments that have an offset printer with a maximum paper size less than 18 x 23 inches, and no other "traditional" printing equipment ("large" offset, flexographic, screen, commercial printers, etc.), whether or not it has electrostatic or other digital printers; establishments that have photocopy equipment and offer prepress services; establishments that have electrostatic digital printers that primarily print text documents.

Digital Printing (except quick printing)--Establishments that use electrostatic, ink-jet, spray-jet, except quick printing and any new digital printer that is yet to come one line. Establishments in this industry are heavily into prepress services, and products are typically signs, banners, posters, etc. (i.e., graphics-type printed output).

Copy Shops--Establishments that use only photocopy (non-digital) equipment and do not offer prepress services.

Preliminary discussions indicate ECPC's agreement to place quick printing in the Manufacturing Sector, provided copy shops are separated and placed in the Services Sector.

GET OUT OF THE SALES GRAVEYARD Are your sales suffering? Maybe your company has contracted "cemetery plot syndrome," i.e., concentrating on one-time sales rather than building relationship sales.

"With cemetery plots, everyone is a potential prospect at least once," explains consultant T.J. Tedesco. "But once isn't good enough. You want to develop a deep relationship with your customers."

Addressing the recent Binding Industries of America (BIA) annual conference, Tedesco offered some simple steps for boosting sales and productivity. Here are some suggestions:

Put sample bins on the manufacturing floor. If certain equipment is idle when you're taking a customer through your plant, you'll still be able to show off its capabilities.

Have your receptionist log referral calls. Follow-up with a thank-you letter to those who have sent business your way.

Look for patterns. Do a win/loss analysis of your estimates. Are you consistently losing certain types of jobs?

Implement an early warning system. Review your customer records. How does this year's work compare with last year's jobs? What about two years ago? Don't wait until it's too late--if you sense trouble, talk with your customer promptly.

Prominently post your on-time delivery percentage. Even if this figure isn't on the high side, it signals that you are trying to improve. Customers will respect your honesty.

Improve your invoices. A benefit isn't a benefit unless your customer knows about it. Even if it's an item such as repacking a skid at no charge, make sure it's on your invoice.

Keep in close communication with your customers. Send holiday and birthday greetings. Put together some standard business letters to encourage your staff to send follow-up correspondence. Create a capabilities marketing piece. Since an equipment list may cause some clients to assume you can't do a particular job, avoid sending a laundry list of machinery. Do job-evaluation surveys--five questions on a postcard will do the trick. Follow up with a face-to-face meeting.

Host an "On-site University." Conduct training sessions at your plant for your client. Let the client know you are willing to help show new employees the ropes.

HUNTERS OR FARMERS? Are your salespeople hunters or farmers? Gary Poyssick and Steve Hannaford, co-owners of GASP Engineering, a Tampa-based consulting firm, have created this classification to explain what a "real" salesperson does. Speaking at the recent Linotype-Hell Users Group Meeting, the duo emphasized that being in sales means "hunting" or bringing in new business. A "farmer" is a salesperson who simply maintains existing business. The hunter writes letters, analyzes potential clients, develops forecasts for budgeting and planning purposes, and prepares proposals and contracts.

Farmers often can be spotted at the printing plant, rather than in the field. Some farmers check proofs, some are looking for progress reports on a particular job and some apparently are convinced the job wouldn't get printed without their personal supervision.

Can you convert farmers into hunters? Poyssick and Hannaford recommend paying salespeople higher commissions for new business as opposed to account maintenance. Also, evaluate your customer service and sales functions. Could some of your customer service people assume greater responsibility for account maintenance? Consider creating a combined service/sales position. Offering both sales and customer service reps formal training can help, too.

Poyssick and Hannaford also noted that if it really is necessary for a salesperson to escort a job through every step of the manufacturing process, you clearly have a workflow problem. "You should recognize that you sell workflows," stresses Poyssick, "not printing or imaging. Think of your workflow as an atlas--it's an operations map for all profitable workflows."

Poyssick further explains that the workflow atlas can be broken down into country, state and city maps. The country map is your primary schedule workflow. The state map shows the workflow used for different types of projects. For example, suppose you were printing a toaster operating manual and a fashion catalog. Obviously, each client would have different needs--the workflow should reflect this. Finally, the city map gives very basic information, such as how to turn a piece of production equipment on or off.

A successful workflow, according to the consultants, has three hallmarks: low rework, a higher percentage of billable vs. non-billable time and overall profitability as measured on a client-by-client basis.