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Nov 1, 2000 12:00 AM
YOUR CURRENT CLIENTS MAY BE YOUR BEST PROSPECTS - PROVIDED YOU KNOW THEIR BUSINESS, CULTIVATE THE RELATIONSHIP AND POSITION YOURSELF AS A SOLUTIONS PROVIDER
When a printer ponders increasing sales margins, as if by a natural reflex, thoughts frequently turn to implementing strategies that will attract new clients. It's an obvious equation: adding more clients means adding more to the bottom line.
The concept is simple, but it is not necessarily the best approach to increasing revenues. Printers often overlook the best source for new sales opportunities: current clients.
Consider the advantages of looking to existing clients for more business. A trusting relationship has already been built, both printer and client have a working understanding of the other's operations, and general policies, practices and procedures have been established.
But what often prevents printers from garnering more business from existing customers is (a) a lack of knowledge about a customer's overall printing needs and (b) a strategy for becoming the solutions provider for those printing needs. Thankfully, printers can incorporate various sales strategies to attract more projects from current customers - with or without the addition of new services.
UNDERSTAND THE CLIENT If it's been said once, it's been said a thousand times: Printers must understand a client's business before they can understand their own.
"We anticipate our clients' needs," says John Barnhart, vice president of sales and marketing of Style Craft Printing (Santa Ana, CA), a full-service shop that offers photography, design, four- and five-color printing, and finishing services. "We often remind them of projects coming up, or make suggestions for new projects based on what their competitors are doing."
One Style Craft client published catalogs. An account representative suggested that the customer develop a digital presence by offering the catalog in CD-ROM format. A rich understanding of not only the client's business but its competitors' activity in the marketplace enabled the account rep to cross-sell Style Craft's capabilities.
At Nies/Artcraft (St. Louis), management realized that communication between one client's multiple locations was not well-organized. The printer helped the company organize many of its graphic images into one database and made the archive available on the Internet. The archive originally contained about 100 items; inventoried items number more than 1,200 today.
"We recognized the need for the image archiving on our own and presented the idea to them. They embraced it and adopted it as their standard," explains Tom Hedrick, vice president of finance at Nies/Artcraft.
THE HOT LIST Determining the full scope of a client's operations is a good way to become aware of areas that might have potential for the printer. How should a printer pursue such information?
"Use any means you can," declares Kenneth King, director of management and technical services for the Graphic Arts Technical Foundation (GATF).
King advises sales reps to view the central client contact as a gateway to information about the company - but to also develop relationships with other people. Additional contacts will enable a rep to discover business opportunities that his or her central source may not be aware of.
The first step in selling more, though, is to determine which customers to target. Printers might ideally want to approach all clients in search of new opportunities, but such a broad effort would likely be a waste of their resources.
Dale Wilcox, president and CEO of Arkansas Graphics, Inc. (Little Rock, AR), determined that projects from his company's top 50 customers accounted for 92 percent of its annual volume. The full-service, general commercial printer keeps close tabs on the 20 largest buyers, to find out what their needs are and where they are going.
Sean McArdle, president of consulting group Life Answers, Inc. (Vienna, VA), recommends determining a "top-growth" list, a roster of clients whose current business volume could be doubled. A printer should then design a program that conveys to each client several compelling reasons for increasing its business with the company (see sidebar on p. 30).
Among other enticements, McArdle suggests offering volume rebates for doubling the business; regular, consistent education programs for individual customers; and a printing audit, where the printer evaluates everything a customer prints and offers suggestions on how to improve quality and/or cost effectiveness in printing efforts.
"The advantage of the top-growth customer is that they see value in your company and they already believe in you. You simply have to convince them that you're willing to do more so that you become worth more to them," McArdle says.
EVALUATE, IMPROVE Clients who increase volume levels with printers, though, are likely going to expect a higher level of service in return. Before ascertaining more business, the sales and management teams should evaluate the current level of attention paid to clients to strengthen the relationship.
Consultant Dick Gorelick of Gorelick & Associates, Inc. (West Chester, PA) says that one way to achieve a stronger focus and learn more about clients is to institute periodic management-to-management reviews of the relationship. Besides reviewing past projects and performances, the meetings should also be used as a forum to discuss mutual plans and capabilities.
Such face-to-face gatherings should involve not only the sales representative, but account service people, relevant production managers, sales management and the president or vice president of the print company. Client representatives should include the central contact with whom the printer typically communicates, the final print-buying decision-maker, the president of the company, and art directors or originators of the serviced material.
Another way to gain insight into a client's perceptions of a printer's performance, or the customer's own business and future plans, is to send questionnaires that request detailed feedback on such issues. Relationship-building can occur in other incarnations as well, such as lunch outings, social events or client visits to the plant.
"A visit to our facility reinforces our service offerings much more than a sales visit to their office could ever do. Customers who have only ever come to us for printing see our warehouse packed with fulfillment items and stacks of mailings, and it reinforces what we've told them verbally," says David Bader, president and CEO of Allied Printing Co., Inc. (Ferndale, MI).
Clients must be informed, educated and reminded frequently of a printer's offerings. "A really sick phrase that's common in the industry is when a buyer tells a sales rep, `Oh, I didn't know you did that.' That's an admission of failure by the printing company," Gorelick says.
Gorelick acknowledges that teaching clients is a never-ending, difficult process. Each individual learns differently; therefore a uniform approach to educating all clients will likely be unsuccessful. He cites an industry study that determined a 29 percent annual turnover rate for buyers. "When a buyer changes, it's a new account to everyone. It has to be re-sold," he states.
ADD NEW SERVICES Although installing new or upgraded equipment is standard practice for printers who wish to remain competitive in a technologically evolving marketplace, it is not necessarily the smartest, easiest way to earn more money.
Purchasing additional equipment requires a significant capital investment and in-depth research to ensure that the acquisition will provide profit generation, not fiscal depletion.
For a company like Award Graphics (Chicago), "new equipment sometimes leads us in the direction of new business with our current customers," says John Nitti, vice president. The full-service printer boasts digital and large-format capabilities. "We have to constantly give our agency clients more tools in their bag to bring to their customers."
Allied Printing, a $10 million, 78-employee shop, carefully researched postpress opportunities before acquiring the necessary space, equipment and personnel to offer such services as warehousing, distribution, fulfillment and mailing. The company also went one step beyond determining whether existing customers would take advantage of the new capabilities - it asked clients to sign contracts guaranteeing business in the new areas.
"You have to have a good feeling that the revenue you bring in will offset the costs," says Bader. "We felt pretty comfortable that the business would be there, and some of that was supported by contracts."
THE TOTAL PACKAGE Nies/Artcraft has successfully grown business with existing customers by offering tailored packages that feature two or three services. Thanks to several mergers and acquisitions during the past few years, the company offers a wide variety of graphic arts capabilities. It has so many, in fact, that employees refer to themselves not as printers but "managers of images."
"Whether the packages combine printing with fulfillment or image archiving with printing, we try to provide solutions - not just products - to our customers," explains Hedrick. "If you have that focus, you will be able to get into those other areas."
Pete Tripodi, vice president of finance at Style Craft Printing, notes that the company tries to avoid projects that require only printing. The staff has found that when clients take advantage of multiple services, fewer problems plague its own internal workflow. "By handling all of the intricacies of each project, we can head off all of the nightmares for them, and for us," Barnhart states.
Clients, however, should be rewarded for committing to multiple or new services with a distinct incentive, such as a pricing break or volume discount. Pundits caution printers to carefully determine the discount levels - the cost of the services still need to be covered in the package price.
"We have a proposed package on the table now that will give the client fulfillment services free of charge, in exchange for its entire printing budget and business. The package is structured so we have enough profit to take care of the fulfillment," says Arkansas Graphics' Wilcox, by way of example.
Incentives should also be available to sales reps who successfully cross-sell to clients. "Cross-selling is not an easy skill to develop. Some people have a natural tendency to do it, some don't. It's difficult, especially if certain reps are not comfortable with some services," King of GATF says. He suggests organizing the sales department as a team for cross-selling approaches.
Award Graphics' sales reps accompany one another to client meetings when a customer is being briefed on a service for the first time, according to Nitti. "No one knows everything about everything we can do, so we double-team on sales calls to make sure our customers get the information that they need," the exec states.
At Allied Printing, Bader says management encourages the sales staff to take resident experts, who normally do not interface directly with customers, to client meetings. He notes that sales reps need time to learn the nuances of services unfamiliar to them, and the involvement of a knowledgeable individual not only helps reps learn about a service but also boosts credibility with the client.
BE A SOLUTIONS PROVIDER Whether or not printers are able to diversify service offerings, revenue potential exists with current clients, so they should focus on methods to tap those resources.
Businesses that arm themselves with detailed information about a customer's business, its internal framework, printing-related activity and the activities of its competitors will be in the best position to solicit more work from that client. Such information will help sales reps determine other needs and opportunities that are available with clients of record.
"By design, our jobs hinge on our ability to know our customers' need and fulfill it," says industry consultant McArdle. "You're not doing your customers any favors by not being straightforward and assuming the responsibility to do the work."
These efforts to be a solutions provider and consultant for clients, in the end, will see an increase in sales. "The bottom line will take care of itself if you focus on the customer. Everything else will come together," declares Wilcox of Arkansas Graphics. "But if you focus on the bottom line, none of it will come together."
A printer's best prospects are already paying customers, according to Sean McArdle, president of consulting group Life Answers, Inc. (Vienna, VA). He encourages printers of all sizes to adopt a selling strategy aimed at current customers to earn more of their business. How to do it?
1. IDENTIFY TOP GROWTH CUSTOMERS | These are clients with whom sales could be doubled. McArdle recommends assigning a catchy name or buzzword, such as the "Nifty 50" or the "Born to Run" customers, to clearly designate them from other clients.
2. ASSIGN FIVE TARGET CUSTOMERS TO EACH REP | Each salesperson with two or more years of experience in the company takes responsibility for increasing sales with five of these customers. The rep assigns a top-growth customer to each day of the week, committing to one sales activity per week with each customer, on the designated day. The sales rep has essentially corresponded his schedule to doubling the company's business with those clients.
McArdle says that adhering to this strategy could increase a company's revenues up to 50 percent in two to three years.
Some printers that McArdle has advised have enjoyed even more success with the plan. When a $30 million printer in Rochester, NY, identified its top-growth customers, the company found a $47 million opportunity to grow.