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Differentiating from the bottom up

Nov 1, 2003 12:00 AM

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For more than 20 years, I've pressed the issue of differentiation in the graphic arts. Things have come a long way, but not far enough. The very first marketing seminar at Graph Expo consisted of five or six attendees sitting around a table, engaged in spirited debate about the relevance of the marketing discipline to our industry. Since then, most printing execs have developed an appreciation for the need to meaningfully differentiate their respective organizations.

This appreciation has been accelerated by two trends. The first is a lousy economy that, among other things, has resulted in a decreased demand for most types of print. Secondly, the commoditization of print has increased the pressure on all printers to differentiate or be condemned to the purgatory of intensifying price competition.

In all fairness, many companies have successfully responded to the industry's need for specialization. Our figures indicate that 25 percent to 30 percent of print companies have, consciously or intuitively, risen to the challenge of differentiation and are realizing impressive pre-tax profits.

Yet other, less profitable companies continue to struggle. At times it seems as though prayer has emerged as the most popular defense against the commoditization of print.

Differentiating the Right Way

In consulting and training, we do our best to help execs both understand the need to adopt a differentiated strategy and actually develop and adopt that strategy. In our observation, the classic industry paradigm — superior product wins — remains the greatest barrier to progress.

Mention the word “strategy,” and many CEOs will immediately incorporate the matter into the business-planning process. That's a mistake, with ramifications from which it is difficult to escape.

Typically, senior managers are invited to attend a casual weekend retreat where they engage in an ecumenical movement. One question is virtually unavoidable at these retreats, a question that (a) reflects the industry paradigm that superior product wins and (b) virtually guarantees that the outcome will be misguided. The inevitable question: “What do we do best?” It's a matter of “ask the wrong question, get the wrong answer.” Printers need to realize that, in a commoditized business environment, the customer, not the graphic-arts firm, defines value. CTP, stochastic screening, remote digital proofing and beautiful color reproduction may be secondary to the client, who may be more concerned with prompt sampling, expeditious billing and special treatment during a press approval.

With competitive differentiation, the first step is to consider the needs, perceptions and business challenges of each customer, not “What do we do best?” It's incredulous that some graphic-arts executives have no problem basing their company's business plan on products and services that may or may not relate to their client's objectives and challenges. Would these same people agree to being medically treated by a specialist who wouldn't document their medical history first?

At the root of it all

Consequently, some companies continue to spend endless hours wordsmithing trite mission statements that have little or nothing to do with unique customer benefits. The mission statement, or differentiated strategy, is based on conjecture or hope unless customer feedback has been formally organized and is current.

A meaningful, credible mission statement, or statement of differentiation, is sustainable only if it is rooted in customer needs, perceptions, beliefs, objectives and challenges. It also needs to take into consideration the printer's existing culture. I frequently see companies adopting and broadcasting a mission statement that is not first ingrained into its own culture. It is awfully difficult to ram a differentiated strategy down the throats of employees and customers who have found the performance to be inconsistent with the maxim.

A differentiated strategy should emanate from existing conditions within the graphic-arts company, along with customer needs and perceptions. Organize the flow of unbiased, straightforward information to the top of the print organization. The rest is simple: Organize the management of information on a “bottom up” basis, and watch the company grow.