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Oct 1, 2007 12:00 AM
I've been in the printing and publishing business for 45 years. That is not a sign of wisdom. Quite the opposite, it presents difficulties in understanding and adapting to new technologies, changes in buying motives, and new management techniques and philosophies. I've often written that success is the chief cause of failure — and I'm at work seven days a week to ensure I don't become a testimonial to that observation.
Spending a great deal of time in this industry does provide a sense of perspective. Management circumstances change, but basic human motives do not. Employees always have wanted to spend more time with their families, but in the past, that demand wasn't pressed because of the scarcity of jobs. Today a labor shortage looms, and the opportunity to work overtime is less of an attraction. Similarly, customers always have wanted a painless buying experience. But a combination of technology and responsibility for buying and coordinating of all media — not simply print — has made this a primary buying motive.
Be tolerant of the rest of this column if you have eight years or less experience in the graphic arts industry. It is not a reminiscence on the “good old days.” It is an attempt to establish a perspective for everyone regarding today's state of the industry.
Until the mid-1990s, there were commonly understood definitions of competitor, customer and supplier. Today it is not unusual for an organization with which a print company has a relationship to qualify for at least two of these categories. For instance, Xerox and Kodak, among others, have engaged in facilities management of in-plant operations; some commercial printers consider them both competitors and suppliers.
Prepress operations once were the most profitable department of many printers. Desktop publishing and its successors, including PDF technology, have made customers into competitors and suppliers, as well.
The starkest testimony to the changing state of traditional industry definitions is to be found in my company's consulting projects. A standard question we commonly ask at the beginning of an assignment is, “Who do you consider your most formidable competitors?” Until eight or 10 years ago, respondents — sales representatives, customer service representatives and managers — would name two, three or four other graphic arts companies.
That's no longer the case. In most instances, respondents have difficulty offering more than one competitor. Typically, those who offer the names of several print companies have 10 or more years of selling experience.
Much of the blame for price competition has shifted to customers and is attributed less to “evil” or “ignorant” print companies that don't understand their costs. These days, competition is defined less in terms of rivals and more in terms of clients' senior management who fail to understand the differences between price and value.
Having said all this, I wish to return to my mantra of the past 45 years. A long-term competitive advantage based on product or price is not sustainable. Only an advantage based on the information to maximize and optimize use of a product can be a sustainable advantage.
Forget about defining “competition.” Many traditional print companies don't understand that their real competitors include their customers, suppliers, and information-based companies that don't consider themselves competitors to print companies.
Superior technology doesn't necessarily win. Size doesn't necessarily win. These aren't exactly daring statements. At the beginning of this decade, the average reader of this column feared the buying power and abilities of consolidators. Industry suppliers were aggressively selling the ideas of facilities management.
It seems to me that the industry has returned to its senses. No technology, program or internal change has value unless it can be expressed in terms of a benefit to customers. The core issue isn't competition, although that can be troublesome in many cases. Rather, the primary challenge is establishing perceived customer value.
This remains a great industry. It's an industry with less government regulation than most. Best of all, it's an industry in which a company can do more to help or hurt its future than a competitor can do. Put on the blinders — customers are the issue.
Dick Gorelick is president of Gorelick & Associates and the Graphic Arts Sales Foundation. He can be reached at firstname.lastname@example.org.