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Dec 1, 2009 12:00 AM
If you live in the great state of New York and you own a motor vehicle, you've already heard this story.
“They don't stick. I've had this discussion with, like, a thousand people.” — Brooklyn resident Daniel Feldman, quoted in the New York Times.
The vehicle registration stickers in New York are falling off. People are mad. They're mad at the Department of Motor Vehicles for not getting something as simple as a sticker done right, and they're mad at the bureaucrats in Albany for hiking registration fees and then providing an inferior product.
They're also mad at R.R. Donnelley, which printed the darned things.
The $1 million per year contract is chicken feed both to the state of New York and to Donnelley, whose label operations date back to the old Wallace Business Forms.
It isn't chicken feed to New York motorists, whose registration fees have skyrocketed and who now face hundreds of dollars in fines for not properly displaying their stickers.
What does this mean to us? For starters, it doesn't matter if you are a one-person shop or the biggest printer in the world. You can screw up, and if you aren't careful, you will. Some screwups are spectacular (see story below) and some, like the vehicle stickers, are just stupid.
This is a good reminder that quality is defined by the end user. The printer in this case is a giant corporation. The purchaser is a government bureaucracy. The real customer is every person in New York who owns a car.
Drivers don't care about dot quality, but they want their stickers to stick. A printer might define this as a “low quality” or “C level” job. I don't believe there is such a thing. Every job has quality requirements. It is up to us to understand what those requirements are.
Today every print project has a non-print alternative, so customer satisfaction and perception of quality is more important than ever before.
Donnelley was the only bidder on the NY sticker contract. At one time that might mean Donnelley would reprint some stickers or pay a token fine, but continue to get the business. Because no one else wanted it, the state was stuck. That was the old days.
One day, someone at the NY DMV will hear enough complaints to investigate real alternatives. Not begging another label printer to bid, but instead replacing the sticker permanently — perhaps with a chip. It could be placed in your EZ Pass, or in your license plate frame.
Once that happens, the same chip could also hold insurance info and inspection info. Amazingly, NY inspection stickers (a completely different kind of sticker printed by a different company) also are falling off, so this might have broad appeal.
The technology is already in place. My cat carries this much information in a chip in his paw. Think of all the printing that would just disappear, all because some stickers didn't stick.
R.R. Donnelley, as a publicly-held corporation, is required to notify the Securities & Exchange Commission about certain events. In September, Donnelley filed an 8-K with the SEC, disclosing that it was buying its way out of an unprofitable contract with an unnamed customer. The cost? $130 million. Say what?
I own a printing company, and I doubt I'll ever see that kind of money. Most of you reading this won't either. Donnelley did not reveal any more than is required by law, but it isn't hard to speculate about the details.
If Donnelley agreed to pay $130 million, it is reasonable to conclude that it would have lost even more if it stayed in the contract.
My consulting fee is considerably less than the exit penalty for that contract, and I'll share some advice right here, for free: Don't sell at a loss. Don't do it strategically. Don't do it tactically. Don't do it sometimes, or in the slow times. Don't sell printing at a loss! Got it? Thank you.
Steve Johnson is president of Copresco (Carol Stream, IL), a pioneer in digital printing technology and print on demand. Contact him via www.copresco.com.
Visit Johnson's World online at www.americanprinter.com