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May 1, 2010 12:00 AM
To sell your print business today for fair market value is a challenge. Many printers are going out of business, used hardware is easy to find, and the most important asset buyers want is the customer base. Most printers are doing what is called a “tuck,” or buying a business for the customer base to help fill unused capacity.
The owner of a family-run printer in the Midwest recently decided to be proactive and prepare his business for resale. There are only four other printers in his area considered true competitors, and he wants to build value into the business before a sale. While many owners milk the business and then get whatever they can, this owner is investing as it has for decades. The owner wants to ensure its customer base is as healthy as possible when it's time to sell.
He wanted to put an objective customer feedback measurement process in place to quantify customer loyalty, client share, product quality and service quality, as well as learn where the business could expand services in the future. In addition, he felt they could sell more into each account. Key customer survey questions included:
Fifty-five percent of the printer's customers participated in the survey and gave them glowing scores and comments. A strengths, weaknesses, opportunities and threats analysis (SWOT) of the results revealed that the top strengths were: loyalty (98%); and customer service (77% rated it as the top reason for buying from the printer, while price took 4th place).
Two weaknesses appeared: very little room for growth within existing accounts; and managing customers' marketing contact information. It was surprising to learn they had done no marketing, customers were acquired through word of mouth, and they were viewed more as a manufacturer than a marketing business. To grow the business, the company would need to invest in the marketing and sales engine to change customer perception.
Top opportunity: expanding services offered to the current customer base, particularly short-run digital.
The top threats to the business were a lack of innovation, coupled with customers' desire for more online buying options. 74% wanted more robust order entry and quote requesting being more automated, and 34% wanted templates to choose from when ordering.
This popular printer mapped out a plan to start doing its own e-mail and direct mail marketing; invest in more online tools; invest in customer acquisition; and consider hiring a new sales executive.
Sometimes customer research gives you too much to work on, and paralysis sets in. With this printer, it was easy to prioritize sales and marketing, built on a strong foundation in customer service, product quality and customer loyalty.
Michael Casey is president and founder of Survey Advantage (www.printers.surveyadvantage.com). He is a strategic partner with NAPL supporting its consulting and research practices, he integrates project surveying with MIS systems and he is an approved supplier for several franchise networks.