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Printers must ask tough questions

May 1, 2009 12:00 AM


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Granted, the current recession came upon us suddenly. And no two graphic arts companies have the same challenges, objectives, culture or account portfolio. Online technology is a challenge to the printed word, and most printing firms must deal with the multiple whammy of cutting costs, slowing sales, capital investment and continuing price pressures. But the worst thing to do under these circumstances is curse the proverbial darkness and hope the good (or better) times return as soon as possible — that the recession will blow over.

In truth, this is a time for introspection. Few graphic arts companies are in a position to sell their way into profitability. It's appropriate to squarely face the current scenario and to ask tough questions:

  • During the first months of the recession, when the fall-off in sales and uncertainty about the economy peaked, did the decreased volume represent permanently lost sales, delayed sales, or both? In other words, is the damage permanent? Have clients gone out of business or simply postponed projects?
  • Is the account base fundamentally sound and intact, or are some major account losses anticipated or possible in the next few months? Be realistic. Hope for the best but plan for the worst — and do credit checks on current accounts that you have reason to believe might be having difficulties. Don't confine credit checks to new accounts.
  • Has your organization defined and communicated its competitive differentiation? It is especially prevalent for management of a midsize or large print buying organization to ask, “Why are we doing business with this supplier?” during difficult economic times. In this scenario, a graphic arts company usually depends on its daily purchasing contact to sell, for you, to management. The response needs to extend beyond the extraordinary performance that has been rendered in past months or years. It might not be fair, but the response needs to be meaningful, unique, and value-laden.
  • Are all current customers aware of your company's capabilities, both product and non-product? Our research indicates that, as an industry, we've done a poor job of communicating those capabilities. That situation is exacerbated by accelerated turnover at many larger buying organizations, where the job of print specifying and purchasing might be in the hands of someone with no print experience. Some print companies have been reducing management-to-management communication in the interest of reducing expenses. Be careful. This might be a period in which newsletters, capabilities mailings, marketing seminars, thank-you letters and other promotional steps are a good investment. Avoid that awful customer comment, “I didn't know you did that!”
  • Is your organization maintaining its focus on customer development? This might be the greatest management challenge of all. Tough times frequently demand difficult decisions that adversely affect the lives of staff members and their employees. Times like this define the difference between leadership and management. After the difficult decisions have been made, it's time to refocus on customer development. That goes beyond platitudes. It requires specific direction that goes beyond wishful thinking about an imminent economic turnaround. What is each member of the staff being asked to do that differs from business as usual and “trying harder?”
  • What is the program to develop new accounts? Specifically, what is expected of every employee? One of our consulting firm's clients demanded that every staff member — the receptionist, press and bindery operators, customer service representatives, etc. — sell and service at least one new account. It wasn't a request. It was a monitored expectation by ownership. The result: It's a different company, not simply in terms of sales volume, but also in terms of changing attitudes toward customers and salespeople throughout the company. There is something to be said for Wal-Mart's reaction to the recession: While most retailers did little to change their behaviors other than reduce price, Wal-Mart substantially increased its advertising/promotion budget and is doing well.

To use a sports analogy, championship teams excel at both offense and defense. There needs to be a plan, a unique selling proposition, leadership, and a focus on customers and prospective customers. It's time for action.


Dick Gorelick is president of Gorelick & Associates and the Graphic Arts Sales Foundation. He can be reached at dickgorelick@gorelickandassociates.com.