American Printer's mission is to be the most reliable and authoritative source of information on integrating tomorrow's technology with today's management.

KEEP 'EM COMING BACK FOR MORE

Jul 1, 1999 12:00 AM


         Subscribe in NewsGator Online   Subscribe in Bloglines

Do we really need more advice on how to retain customers? Hasn't it all been said before? Don't most firms have a process in place to ensure the retention of their current customers? Is this issue still of concern to printers? Emphatically, yes.

Have you ever asked why the issue of customer retention is so widely discussed? Customer retention is a fundamental requirement in making a business more profitable or expanding that business' direction. In fact, poor customer retention is frequently a major contributor to declining revenues and makes it difficult to expand a business into new markets.

The cost of retaining a customer is seldom greater than developing a new account. While it's always important to win new clients, it's often much easier and more profitable to nurture existing accounts. So why, then, is customer retention frequently among the top five reasons why businesses fail? Certainly you would think that trade associations, industry conferences and publications have beat this issue to death over the years.

For decades the printing industry has been shrouded in technical complexity, workflow mysteries and "arcane" craftsmanship. As long as printers operated newer, faster and better technology, customers didn't dare look elsewhere. As long as customers specialized in buying print, printers were dealing with individuals who understood and/or appreciated complex workflows, leading-edge systems and personal craftsmanship. As long as print was the de facto communications standard, little else was available to get the message to its intended target.

Today's market, however, looks a little different. Most print suppliers use the same desktop-based equipment as their customers and competitors. The underlying technology continually gets less expensive and performs tasks that are no longer a mystery. Buying print is more often an action item for a communications specialist than a full-time job. New media tools are challenging the power of print as the sole communications standard.

While none of these trends, either individually or collectively, suggest that printing services are a dying entity, they do point out the need to refocus on ways to retain increasingly savvy and often overburdened customers.

In spite of all the articles, conferences and seminars devoted to retaining customers, there are two reasons why the issue just doesn't seem to disappear. First, we often treat the issue too discretely. We propose sophomoric solutions that sound good, but rely too much on the listener's interpretation of how to implement these principles.

For example, it's frequently suggested that customer service is a key issue in retaining accounts. It is. The typical response, however, is to hire additional customer service reps and/or plan additional training sessions for the CSRs already in place. Unfortunately, these actions may have little effect on customer retention if the existing customer service organization is poorly managed or lacks effective operating guidelines.

Another example has to do with price. Many firms believe that the key to retaining customers is offering them the lowest price. Interestingly, when print and communications media buyers are asked, price is seldom among the top three reasons why they choose a supplier. In fact, while the quoted price of the job may be very acceptable to the customer, there are countless daily examples of how low-priced jobs become expensive and protracted production nightmares.

The second reason we continue to focus on customer retention has to do with service. It is frequently assumed that any services printers add to bolster customer retention should augment an existing organization. For example, if printers believe that adding new sales personnel to the organization will help retain customers, these new hires are typically added to the current organization, regardless of the company's overall performance and management style. A more specific example is hiring digital color printing salespeople to work in an organization structured to sell conventional commercial printing.

Printers tend to make the same assumptions when adding products they believe will drive sales growth. Printers may add digital color printing services to their product portfolios, for example, with the thought that these products can simply be blended into the existing prepress workflow or sold by the same sales organization.

The same thing holds true for Internet-based products and services. As more and more graphic arts firms offer Internet services for their customers, they include these in their "value-added" proposition. They expect their efforts to be rewarded with higher customer support, i.e., customers will be more likely to return because Internet services have been added.

For most graphic arts firms, however, simply adding products and services seldom has a significant effect on their ability to retain customers.

Perhaps a good analogy is the current adoption of computer-to-plate (CTP) technology. While CTP has been around for several decades, the process has only recently become viable for the graphic arts. What had been lacking were the integration tools to make CTP fully compatible with a plant's production workflow. In other words, CTP adoption required organization and process changes to be effective.

The same is true of any organizational change that affects our working relationship or interface with customers. Change requires rethinking the entire process, just as integrating CTP requires workflow planning and restructuring.

So, what do these internal events have to do with customer retention? More than one might think. In a world in which we strive to avoid conflict and minimize daily headaches, a poorly functioning organization often directly affects our customers. In essence, it's almost impossible to tolerate internal management, personnel and production shortcomings without having them reflect on the way we deal with clients.

Given the option of using print suppliers who are easy and fun to work with, why would any print buyer choose to deal with an aggravating and unresponsive alternative?

But is there a formula or model that we can apply to our business with a high level of confidence that will expand the base of returning customers? The answer is yes. Many years of front-line observation suggests that companies with chronic customer retention problems need to be hit by the proverbial two-by-four. While they frequently try, often at considerable cost, to retain customers, they still lose a far greater percentage than they should. Instead of experiencing a five percent or smaller annual attrition rate, customer dissatisfaction often leaves them with a shortfall of 10 percent to 20 percent or greater each year. That means that before they can ever hope to achieve revenue and earnings growth, they have to replace a considerable amount of existing business.

The problems-and the solutions-begin internally. Do your employees like to come to work? If they don't, the message will quickly be received by your customers. Employees need to be motivated, empowered and encouraged to find better ways to get the job done. When "management by conflict" is replaced by team building and employee recognition, productivity improves and customer relationships become more positive. After all, if you or your employees are in a bad mood, how likely are you to keep those feelings hidden from your customers?

Getting to know your employees is an important first step. If you own the business or have management responsibility, be visible in the plant. Walk through the plant even when you don't have a specific mission in mind. Chat with your employees. It builds team spirit.

While many of these brief conversations will be social, you will probably be surprised by how much you can learn about your firm from employees, as they get to know and trust you.

Compliment an employee on a recent well-done job. If your employees know that you care, they will care, too. If they care about the business, they will project that that attitude to your customers. Customers will respond by coming back.

The strength of the management and production teams reflects the overall strength of the business. The strongest businesses make positive impressions on their customers. More importantly, customers like to do business with successful, proactive companies. As venture capitalists and investors have known for years, the product is important, but the team is most essential to success.

Customers have to be shown a difference. Print service providers often think the "value-added" of their business is a specific product or service. These service providers equate value-added with the purchase of a new piece of equipment, increasing their staff, initiating a new business or adding new services.

While these elements contribute to a firm's value-added, their effect is usually fleeting. We all know from experience that if we buy a new scanner or printing press, our competition across the street likely will follow soon. If we invest in new services (design, digital color printing, fulfillment, etc.), our value-added is unique until the shop down the street does the same thing.

In essence, trade service firms and printers have typically limited their definition of value-added to tangible products and services-things they can point at and, in most cases, things their competitors easily can match.

Conversely, developing a business around relationships is not value-added, it's also much more difficult for competitors to emulate. Why do certain firms always seem to get more favorable response even though they apparently don't have any magical processor or unique workflows? What separates that company from its competition?

This phenomenon is no different from what happens to certain people at a social gathering. Some always seem to draw an enthusiastic crowd. This is due to their personality and the way they have learned to interact with others. Just as people have distinct personalities, so do companies. And, if our customers like the personality that we have created for our business, they will want to be part of that enthusiastic crowd.

There is one trait that we almost always find in businesses that attracts customer enthusiasm-creativity. Since it is always easier to develop enthusiasm from the unexpected or by performing a less traditional or unconventional action, business owners and managers often profit from engaging creative ways of addressing customer needs.

Let's look at a few of the out-of-the-box ways that some business owners and managers create customer enthusiasm.

One plant makes press checks easier for customers. When a client is scheduled for a press check, the printer sends a limo. While they are being chauffeured to the plant, refreshments are provided. This service is especially important to customers if a plant is in an industrial area or if the press check is taking place at night.

In another company, one sales manager has initiated a program that has almost become a tradition. He makes early morning appointments with customers and shows up with breakfast. If the meeting is really important, he has breakfast catered. Everyone enjoys a treat now and then-if you're not coming for breakfast or lunch, a box of chocolates is generally well-received.

A graphic arts company with a downtown business location makes a standing offer to customers. Stop in anytime for a cup of the "best coffee in town." Space is set aside for clients to make calls and sort out the day's events. It's amazing how frequently clients bring jobs with them, since the "coffee break" gives them an excuse to get out of the office.

The owner of a small trade shop enjoys fine wines. She frequently has a Friday after-work wine tasting for customers. A local wine merchant runs the events and provides those invited with an enjoyable and relaxing hour before customers head home for the weekend.

A prepress house decided to maximize the return-on-investment in a computerized job tracking system. Job tracking and performance data for larger clients were compiled. Each quarter, the owner presents the accumulated data to clients at a luncheon meeting, typically at his club. Then he offers ideas that will improve productivity and make better use of print budgets.

If you are constantly looking for ways to make your customers feel comfortable when they visit the plant, follow the example of a creative and energetic plant manager. Brightly painted walls, great wall graphics, neon signs and an enthusiastic staff are responsible for a heavy-and steady-stream of customers in the plant throughout the day. Customers, who are often too busy to see the plant manager's competitors, stop by to chat with her. They particularly enjoy taking a break with her public relations director-a four-pound dog named Theodore.

There are countless ways of applying creative spins to these and other techniques that will keep your customers coming back. In each case, remember that the type of production equipment being used and the cost of the job are not the driving issues. Developing and maintaining relationships and showing sincere interest in customers are the real issues.

Creativity and the ability to develop unique relationship-building programs are not something that everyone does well. Some people are naturally creative and come up with ideas on-demand. Most of us have occasional bouts of creativity. A few of us don't have a clue, but can understand why such activities are important in retaining customers.

It doesn't matter who has the idea. If the idea contributes to our ability to keep customers happy, we are providing value-added with long-term impact on our business.

While the creative programs that we've discussed can have a dramatic effect on the success of our business, it's very important to note that there is a great deal of substance behind each of the above examples. If you can't deliver the job on time, without errors, at client-acceptable quality, wine tastings and free lunches are a waste of time.

The value-added that special programs provide is only effective when they are implemented in conjunction with competitive technical and production performance. This means that printers must operate an efficient, competitive, world-class business that provides the foundation on which they can implement these creative programs to attract and retain customers.

Keeping customers coming back is not difficult. It requires overcoming the one major problem that we, as consultants, most frequently encounter in today's business-indifference. Technical knowledge, plant productivity and production expertise will always be important to the survival and growth of any business. If, however, we do not continually look for and overcome indifference in the way we treat our employees and our clients, we will not achieve the desired results from our hard work and investments.

Making the workplace a positive (and more productive) experience often requires some "out-of-the-box" thinking, but it certainly isn't rocket science. Here are some examples that can be adopted at either the corporate or departmental level of any firm. Each of these programs is currently working successfully in one or more printer's businesses. *The salesperson with the highest sales increase for the month gets a free dinner with his or her significant other. *The production operator with the fewest makeovers gets to begin his or her weekend at Friday noon. *Friday is pizza day. *The employee of the month parks next to the front door for the next month. *If you have to bring staff in to work over a weekend, include a couple of movie passes or a coupon for a free car wash with their next paycheck. Employees would rather have the weekend off than the overtime. *Conduct frequent performance reviews staggered throughout the year. Discuss job performance and goals. Review and update job descriptions. Establish appropriate follow-up actions. *Schedule training sessions for all plant personnel. They learn to do their jobs better and appreciate the company's investment in their success. *Schedule frequent company-wide meetings so everyone knows what's going on. Discuss financials and long-term planning.

Over the years, a number of business practices have emerged that contribute to building an efficient, competitive-class business. Although they are mostly common sense, companies often trivialize or overlook their importance. Some of the more common include: *Have CSRs available to speak with customers on all production shifts throughout the day. *Make accurate and timely job tracking information quickly available when customers make inquiries. *Develop a customer feedback system that records and analyzes the client's assessment of every delivered job. Proactively use this information to improve overall performance and customer satisfaction. *Maintain a clean plant! If a plant looks disorganized, it probably is. *Perform preflight quickly. The longer it takes to tell customers about problems, the more likely they will argue about who pays for the corrections. *Invoice immediately. Designers and ad agencies, in particular, want the invoice "yesterday" so they can immediately bill their clients. *CSRs are NOT entry-level positions. When customers know more about production than the customer service rep, chances are good they will look for suppliers who know more about the business. *Control who speaks with customers. While there should always be informed people assigned to customer communications, a great deal of confusion can develop if too many people in the plant are speaking with customers. *Put voice mail in its place. Make sure that customers always have a way to reach a human being. Leaving messages doesn't give clients a sense of completion. * Keep customers informed. Whenever a customer learns about a production problem by accident, you are begging to lose an account. Customers must know that when a problem arises, they will be proactively informed.