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Jun 1, 2010 12:00 AM
Changes in customer perceptions, needs, experiences and objectives precede changes in customer behavior. That alone is justification for ongoing research by a graphic arts company. Well-conceived, ongoing research can be an early warning system with a direct positive impact on customer retention.
Early detection of changing customer attitudes and perceptions can prevent account loss. One of the great pieces of 20th century business writing was an article in the Harvard Business Review by Thomas O. Jones and W. Earl Sasser, Jr., titled, “Why satisfied customers defect.” If it were within my power to do so, I would require every owner, manager,and even every employee of a printing company to read it. It might profoundly change the way customer behavior and all market behavior is viewed. The bottom line: the preponderance of defections is not due to screw-ups, mistakes or dissatisfaction. In an environment such as today's graphic arts industry, the majority of customers that defect are satisfied.
The problem is that customer satisfaction is a poor metric for predicting account retention and/or account loss, contrary to popular opinion. Satisfaction with a print supplier is the least customers expect and have a right to expect, given the state of technology that tends to level the “production playing field.” Selection of a supplier for the manufacture and distribution of print materials has shifted to the next level: delight, rather than satisfaction. Satisfaction is a passive concept. The fact that nothing is wrong shouldn't be interpreted to mean everything is right.
Recent research conducted by our firm indicates some interesting trends in the print-buying community. Some customers do business with particular print companies out of a sense of habit. Changing printers can be comparable to changing dentists: The devil you know vs. the devil you don't know. However, most customers have more compelling reasons for a supplier relationship, reasons that printers might not find compelling because they have little or nothing to do with the manufactured product.
More than 80% of print buyers spend less than 40% of their time sourcing and coordinating the manufacture and distribution of print. Their responsibilities typically include other media. These circumstances dictate that the buyers often select print suppliers on the basis of consistency, broad in-house capabilities that minimize the need for coordination, access to a supplier's senior management or ownership as a safety net in the event of a problem, and other factors that contribute to peace of mind. In many cases, avoidance of detail has superseded involvement with the process as a primary buying motive.
Fewer than 3% of survey respondents' comments mention products or equipment. Memorable and unique events and services — ranging from green pretzels on St. Patrick's Day to special handling of samples to performance of delivery people and the receptionist — are offered as important factors in a relationship.
Demand for customized distribution (i.e., post-bindery) services by print companies is growing in leaps and bounds. These services encompass everything from mail list procurement, list maintenance and hygiene to storage and vendor managed inventory, as well as staff training. The demand for these services is driven by the realization on the part of print-buying organizations that it might cost more to distribute a printed product than to manufacture it.
Selling customized distribution services is different. There are few standard prices. Pricing should be based heavily on the perceived value to each customer.
Research indicates that printers who have eschewed customized distribution services have been left at the proverbial station after the train has pulled out.
The“silent killer” is a conclusion that all is well based on feedback that indicated no pressing problems or deficiencies. This is a common scenario. Our experience is that, without exception, “doing more of what we've been doing” results in year-to-year erosion in customer feedback. It should be a wake-up call to graphic arts companies: Do not assume that an acceptable level of customer satisfaction is a static concept.
Assume the competition is getting better every year. When that occurs, customer expectations are elevated. The same level of performance year-to-year results in losing ground. That scenario will not necessarily change or improve with reduced manufacturing spoilage. Contrary to the message of many consultants and their seminars, the bottom-line issue is defections, not product defects.
Dick Gorelick is president of Gorelick & Associates and the Graphic Arts Sales Foundation. He can be reached at email@example.com.