TruncaleTalks

It’s just an invoice.

Continuing our review of 17 years worth of survey data from thousands of print customers of hundreds of printing companies, we come to the issue of invoices.  Stay with me here.

No, this is not yet another reminder to get invoices out faster (although customers would like that).  Rather it is about the invoice itself.

In working with printing and graphic communications companies that have used the eKG Competitive Edge Profile™ to gather input from their customers, looking at the format and content of their customer invoices has been a revealing and constructive exercise. 

One of the standard questions we ask of print customers has to do with whether they receive “clear and helpful invoices” from their print services provider.  Why would we ask a question like this when surveying print customers?  Well, as it turns out, clear and helpful invoices are very important to print customers, and why not?

As custom manufacturers, we often adapt to the unique requests of the customer on the fly.  Having the invoice accurately present and explain what was provided creates an important communication between you and your customer (and it helps you get paid more quickly).

Here’s a question for you.  When is the last time you looked at one of your customer invoices?  Are all of the services you provided accurately spelled out?  Is the purchase order number easy to identify?  Are there any abbreviations or acronyms that could be confusing to your customer? 

Is the person approving the invoice the same as the one who placed the order with you?  Sometimes that is not the case, and it becomes even more important that the details of services provided are spelled out clearly.

Do the words “thank you” appear somewhere (anywhere?).

Your invoice is one of the most important communications you have with your customers.  In an industry which, on average, gets paid in about 55 days after the product has shipped, it may be time to take a closer look at your invoices.  Get members of your team to participate.  Maybe get feedback from your customers as well. You may identify ways to make this communication more effective for your customers and for you.  

Printers say “Price.” Customers say “Value.”

Hardly a day goes by that I don’t have a conversation with a printing company owner/CEO. Invariably, we talk about the current state of business and when I ask how business is, the conversation centers on price competition.

Adjectives like brutal, illogical, unreasonable, and insane are used to describe the current state of determining pricing in a hypercompetitive marketplace. This phenomenon is not exclusive to a specific region, nor is it reflective of a certain size of company. While no one can deny the reality of overcapacity and its effect on pricing, I wonder if we are missing something here.

Beginning in 1993, a company called eKG Research™ has been surveying printing customers for many of the best companies in our industry. The eKG Research™ approach is unique. It uses a 22-question survey comprising 16 standard questions and six customized to the specific printing company’s interests. That means that over the past 17 years, thousands of print customers of hundreds of printing companies have answered the very same questions. Not surprisingly, one of the standard 16 questions deals with price.

The survey instrument goes beyond simply attempting to gauge how satisfied a printer’s customers are (satisfaction alone is not a predictor of loyalty), but also asks how its customers rate their satisfaction compared with its competitors and how important each item is to its customers. This three dimensional view (satisfaction, competitiveness and importance) roll up into what is termed the QCI™ or Quality Competitive Index™.  

A few years ago, NAPL acquired eKG Research™ and the survey product was recently renamed the NAPL Competitive Index Profile™. While we are excited to have this survey product (it is the best I have ever seen), we are even more encouraged by owning this rich database of thousands of responses. A high-level analysis provides some interesting patterns. One has to do with price.

In looking at the issues print customers rate as most important, sure enough, price consistently ranks in the top five—but it is never number one. In fact, it is rarely in the top three. What are the other items in the top five?  Reliability (product quality and on-time delivery) for sure. But the consistently highest-rated factors are “understands my business” and “offers ideas and suggestions I can use.” These are closely followed by “easily accessible” and “responsive.”

Time and again, the best customers of the best companies tell us that while price and quality matter, these are trumped by a demonstrated genuine interest in them, their business, and what it is they are trying to accomplish. Absent those factors, and if quality is considered a constant, there is only one thing left to talk about—price.

There is a lesson here and a significant opportunity. And it begins with a question: How much do you know about your customers’ businesses, their objectives, and what it is they are trying to accomplish?  The very act of trying to find out may just set you apart from the competition.

Value-Based Pricing: A New Business Transformation Model

Unprecedented pressure on pricing and a suffocating strain on profits—it’s an all-too-common lament of so many printing and graphic communications companies today.

A universal business truth, known to economists, marketers and business analysts for years, has come into sharp painful focus for members in our industry. Customers will pay as little as possible for what they perceive to be a commodity. What’s the good news? These same customers will pay a premium for what they perceive to be unique value.

Who knows what represents unique value to customers? Scary answer: They do. And what’s even scarier is that the tried and true methods of traditional print sales are not designed to get at this most critical information in a way that can help businesses create the kind of customized and highly focused response that takes the customer relationship to higher levels of loyalty and profitability.

When we truly understand what it is a customer is trying to accomplish, what obstacles are in their way, which opportunities they are trying to exploit, only then can we offer an approach that moves us from being a commodity producer to a valued strategic partner, critical to the ongoing success of our customers.

OK so far. But how do we do this? It begins, like so many things, with our customers. More to the point, the kind of conversations we are having with our customers. Conversations that contain more questions than answers, open questions designed to get customers talking about their opportunities and challenges. It also includes a robust method of gathering customer feedback, done in a systematic and statistically valid way, a way that tells us what it is that customers value most.

When we understand what is at stake for our customers, we are in a far better position to respond. That done, pricing necessarily takes on a different dimension, where the value of the product and service rendered (as measured in the extent to which it solves a problem or creates an opportunity for a customer) is the key determinant, more so than simply cost plus.

There is a structured way to move to this type of selling and business development model. It is part of a business transformation model that more industry firms need to embrace.

Take Steps to Deepen Your Relationship with Your Key Accounts

Last time we talked about the importance of "key accounts" (our 20 or so best client relationships) and about creating a simple grid listing our top accounts on one side and our products and capabilities on the other, then tracking what and how much they are buying from us.

One of the things we should be trying to determine is whether there are noticeable gaps in what they need (and buy) and what they buy from us.  These gaps represent opportunities for us to further our service levels with them.  Now what? Well, what comes next are two steps:  Planning and execution.

First, we need to take a deeper look at the customers who comprise our "top 20" and frame the discussion of each account three key questions:  Is the account significant?  Is it strategic?  And, is it profitable?

Key accounts are significant if they are doing a high volume of work with us, but in other ways as well.  Do they hold a high position within their field or profession?  Are they well known in the local business community?  What type of industry are they in and what is the short- and long-term outlook for that industry (or profession)?  How are they positioned in their industry and what is their outlook as an entity?  What is their management structure?  Are they in a growth mode, or are they a takeover target?

Key accounts are strategic if they might help us get a foothold in a new industry or if we are launching a new product or service they want.  Can they help introduce us to other accounts (more about the many missed opportunities for client referrals later)?  Does having their name on our roster of customers bring increased credibility? 

The profitability of a key account seems straightforward enough.  However, we should look beyond the most obvious measure of profitability and toward other issues that may not factor directly into traditional methods of analyzing profitability.  For example, does the account require special estimating, billing or delivery?  What amount of senior management’s time is involved in serving these accounts?  What is the level of service expected?  What is their payment history like?  All of these issues affect profitability, but don’t necessarily show up when reviewing P&L by account.

Planning for growth among our key accounts is a team sport.  It begins with a management imperative that brings increased urgency and scrutiny, and generally requires input from sales, customer service, technical support, and senior management.  In most cases, this is not work best left to individual sales reps alone.  Armed with information gleaned from the grid analysis, we can determine a go-forward plan to approach customers and introduce them to our broad array of products, capabilities, and services.

Among the best ways to begin is with an Annual Meeting of the Relationship™ (AMR™).  Begin by requesting a brief face-to-face meeting between the owner or CEO of your company and the decision-makers in your top accounts, ideally at their location.  (The sales rep on the account may or may not be included.)

There are two primary objectives of this meeting.  The first is for each party to learn more about ways to advance the relationship toward a higher level of mutual benefit.  You will ask questions about their goals, objectives, needs, concerns.  They will learn more about your capabilities, which likely go beyond what they know now.

The second objective is all about positioning your company.  When the owner/CEO of a business cares enough about a customer to request time not for a sales call, but to thank them for their business and to identify ways to serve the customer even better, it goes a long way toward building loyalty and trust.  And here’s an added benefit to conducting an AMR™; your competitors are probably not going to bother!

Recruiting for new business should begin with the customers we already have.

After years of careful study and thorough analysis, I’ve come to the conclusion that the business development process in many industry organizations is in dire need of help.  In fact, the uncomfortable secret in a number of firms is that there is really not much being done to plan for business growth. Every company needs to add new names to the customer roster and on a regular basis, but, for now, let’s take a look at the customers we already have and see what opportunities for growth we can find with them.

You probably have a number of key accounts.  If yours is like many industry firms, an account becomes “key” based on sales volume.  You may also include value added, profitability, or even tenure (how long they have been a customer) to the mix.  None of these is wrong, however, but the list is incomplete.

Key accounts are key based upon the extent to which they depend on you to accomplish their objectives.  How indispensable are you to their success?  What would happen to them if you no longer provided what you are providing now.  If the answer is that they would simply take their business to another provider, I submit they are not a key account.  Key accounts are key only if you are key to them!

We all have customer relationships that are stronger than others.  Well, as it turns out, these best relationships are a prime source for additional business, but it won’t just happen.  You have to make it happen, and we have just the process to take you there.

We begin by listing your Top 20 accounts (or fewer if you prefer).  We create a simple grid listing your best relationships down the side of the page and all of your products and capabilities across the top.  We then go relationship-by-relationship and ask what are they buying from us?  What are they not buying?  What percentage of their total spend are we getting in each category?  If we don’t know, can we find out (or at least estimate).

If the relationship is strong, and we have every reason to believe there is a need for additional services we can provide (or more of what we are now providing), all that is left is to identify these “gaps”, assign a goal, and a plan to reach these customers with a new message.  Here’s an insight:  Don’t be surprised to discover that your customers (yes, even your best relationships) didn’t know you provided some of the very services you have been offering for years (this happens!).

This process is the first step in NAPL’s Key Account Accelerator™ system.  More next time.

Strategic Planning? When will I get the time to do strategic planning??

Ok, so strategic planning may not sound like the most glamorous thing to do, especially now with all of the pressure we are under to perform in a hyper-competitive, ever-changing business environment being transformed by technology.

That the best performing companies in our industry now dedicate more time to planning (not less) should be enough to convince all business leaders that now, more than ever, is the time to take the time.

So why don’t more company leaders engage in strategic planning?  Maybe it’s the name!

In many circles, the phrase, “strategic planning,” has come to mean an esoteric or, worse yet, an academic exercise devoid of any basis in current reality.  Some feel that strategic planning is for big companies whose senior executives can afford the time and expense of going off-site (read: junket) for a few days of supposedly high-level discussions.

If it is neither of these, then just what is strategic planning?  In our view, it is a structured process that enables us to identify your core strengths (and, thereby, your unique abilities), match those up with the biggest and best opportunities available in the marketplace (strategy), and set a course for accomplishing targeted and prioritized objectives while maximizing your available resources (a plan).

Preparation and data are essential to the process.  Data about your competitive position in the marketplace (as identified by your customers) using NAPL’s Competitive Edge Profile™ is a helpful starting place.  So is a thorough examination of our best relationships as a means of developing target areas of sales growth, using NAPL’s Key Account Accelerator™ system (more about these tools in later updates).

Two essentials for an effective planning session:  First, engage the services of a skilled, experienced facilitator.  Resist the temptation to try to save a few dollars by doing this yourself.  Strategic planning facilitation is easy when you don’t know what you’re doing and quite difficult when you do.  Besides, you should be an active participant in the discussion and it is nearly impossible to do this as a facilitator.

Second, if at all possible, do not do this in your conference room.  I’m not exactly sure why, but being offsite creates a different kind of thought pattern in the minds of the participants (and they won’t be running back to their desks during each break).  The location does not have to be far away, fancy, or expensive, but it absolutely should be different than the workplace.

There is nothing vague, mysterious, or evasive about strategic planning.  When done well, it is about eliminating distractions, confusion, and complexity; making sense of our best opportunities; and aligning organizational resources to create our biggest and best future.

Doesn’t now seem like a good time to start?

With apologies to Nike, they have the right idea.

I write this on a plane headed toward an engagement with a member/client.  The nature of this assignment is to spend two days with their management team reviewing their strategy, actions completed since our last session, make sense of what was accomplished, and set a definitive course for further progress.

While the nature of this assignment is not new (I have worked with many organizations in a similar capacity) the success this particular company is enjoying is anything but commonplace.  In fact, it is extraordinary!

Since I have had a front row seat for the past several years, I decided to examine all the factors that contribute to their incredible success and growth these past years, (a pattern of success that continues today in arguably the most difficult of business environments) even as so many industry firms struggle to find their best future.  My aim during this process has been to try and identify the one thing that is different about this company, the single most identifiable characteristic that sets them apart.

And I found it.  It’s not technology, great leadership, sound management, or good talent.  They have all of that, but so do other companies.  It’s not a talented, hard-working sales force or great facilities (they have those, too).  It is the most simple to understand yet, paradoxically, the most difficult to replicate of all corporate characteristics.  And I can sum it up in two words:  Organizational will.

How do I define organizational will?  Simple: They do what they say they’re going to do.  No excuses, no delays, no long meetings, needless research, or esoteric discussions.  A vision is articulated, a strategic direction is determined, broad objectives are identified, tactical plans and budgets are established, and then it’s all about focused action.  No distractions or deviations.  In other words, they just do it.

High accountability? You bet.  Fierce, cut-throat culture?  Not even close!

In fact, a significant by-product of their highly developed organizational will is a sense of clarity and cohesion that brings their people together in a way that is as unique and as extraordinary as their results.  Organizational will.  They do what they say they’re going to do.

Think about it.

Meeting the printing industry of tomorrow…

One of the best parts of the last day at the Print show, besides the prospect of returning home, would have to be the influx of students. This Wednesday saw future printers, designers, educators, salespeople and engineers all traveling from booth to booth, speaking with suppliers, investigating new technology and of course, helping themselves to all of the beautiful printed samples.

 

Perhaps an even more incredible aspect of our industry: salespeople, company executives and engineers – all willing to engage these inquiring young minds. Any amount of time spent on the floor demonstrates that today’s members of industry do care about the future of print. In an ever-changing world economy, doing what one can to ensure the long-term viability of one’s profession is paramount.

 

These folks – these students, are the printing industry of tomorrow and it is wonderful to have so many of them interested and enthusiastic about our field. The realization that our willingness to answer their questions and offer advice may help influence their future career choices in our favor is indeed a humbling and important one.

 

 

Joe T.

Prowling the back aisles…

It’s no secret that many of the larger manufacturers and suppliers exhibit their wares in the central portion of the halls at Print ’09. It’s also no surprise that smaller manufacturers and suppliers are, not-so-easily found, towards the periphery of the show halls. The point is, manufacturers and suppliers of all sizes come to the Print show with a goal in mind: to get their product information out to the right audience -you.

 

Many of these smaller suppliers have interesting new technologies and auxiliary devices for needs some of us may not even thought of yet. Whether you’re looking for specialized software, finishing and bindery implements, or plug-and-play peripherals for your existing machinery, these suppliers are eager to educate you about how their company can help your shop with productivity and profitability.

 

While you’re out roving the halls of Print ’09, don’t forget to spend some time looking around at the back aisle(s) there are exhibitors all over who are waiting to meet and speak with you about their technology. You never know, the efficiency-creating, money-saving solution you’ve been looking for could be just around the corner.

 

Joe T.

Critical thinking, critical conversations...

Monday morning’s Critical Trends Summit hosted by Robert Whitton, Managing Director of the R&E Council of NAPL fostered many interesting dialogues between some of our industry’s top suppliers. The event also saw Barry J. Wilson, Assistant Professor of the University of Central Missouri’s School of Technology receive the educator of the year award presented by Ted Ringman, VP of Development for the Printing and Graphics Scholarship Foundation.

 

During the summit, attendees were treated to a panel discussion about technological developments and advancements in the printing industry. Many thought provoking questions were posed resulting in interesting discussions. An overriding topic of conversation was once again the future of our industry, what we can expect from technological advancements, as well as how to make sure we’re attracting top talent from schools.

 

Joe T.