Lemons, lemonade and Selling Print

Print sales people have spent the last couple of years turning lemons into lemonade. Given the secular decline of demand for Print, the successful print manufacturer and her sales people have learned to turn on a dime to take advantage of any opportunity.

Now that trillions of dollar denominated wealth have disappeared in a couple of weeks, there are many new opportunities. If ever there was effective demand for a "solution provider", this is it.

The era of cheap money is over. That means that faster, better, cheaper is not a "nice to have." Overnight it has become a "must have." The sales person now has to refocus on the right product for the right person at the right price. This might mean slicing and dicing and recombining products to get it just right.

The print manufacturer is going to have to figure out how to make money selling those reconfigured products. Neither job is easy. But neither job is really all that hard. It just needs a little time to focus.

Here's a place to start.

Dr Joe Webb usually has a pretty realistic idea of what's going on. In his regular "Mondays from Joe" series at WTT.com, I found some good advice for the new business of selling Print.

He says, among other things:

. . . This is not a time for business as usual, but time to conduct business as unusual. Understanding what's stressing customers and prospects and helping them to address those stresses is at the core of entrepreneurship.

. . . The good news is that partnering with a designer or small agency can set your business on this proactive road to success. After all, they are small businesses who are having problems as well.

. . going out and “selling harder” today is rarely the answer.

. . . Developing communications opportunities for others and supplying the tools needed to execute them is a proactive approach that printing businesses can take, in good times or bad, to stimulate growth.

Unfortunately, many print businesses are not used to this approach.

. . . There are businesses that need our assistance today to develop and implement communications programs to counter negative economic conditions. This is where small and mid-sized commercial printers have greater freedom of action and opportunity than their larger brethren.

. . . There are are smaller businesses that are more scared than you are, such as small retail shops, restaurants, and other service businesses. Many of them are seasonal businesses that rely on Thanksgiving, Christmas, New Year's and other holidays for a bump in sales. They may not get it this year. They need to do something. Most do not have effective communications plans in place.

These retailers, professional and personal services businesses and others need your help. . . .

Save them money.

They may be concerned that a mailing incurs prohibitive postal costs. Create a mailing that includes other non-competitive businesses to help defray the costs. Work with the landlords of the retail spaces on business growth ideas for their tenants . . . Have them focus on price discounts and special limited-time offers to emphasize the urgency of response, reminding these businesses that when prices go up, consumers become bargain hunters.

Remind customers that with the high cost of mailing, it is more critical than ever before to clean up customer lists.

. . . Help them use direct mail to clean up their e-mail lists (e-mail addresses change about three times faster than mailing addresses) and keep them up to date. Help them develop ways to grow (or start) their e-marketing lists with small in-store displays. Lower their long-term postal costs by, paradoxically, using the mail to make their e-mail better. Manage the process for them. By maintaining their lists, you retain their business.

Dr. Joe Webb just released an updated version of “Renewing the Printing Industry.” The sponsor of the WhatTheyThink Economics and Research Center, MindFireInc, is making it available to the industry at no charge, as a free download. It's worth the click.

Education and Selling Print

In yesterday's post, I argued that the growing market for Print is no longer advertising. It's what I called the EHG sector - education, health and government. New markets emerge from technology plus new business models.

To take advantage of new opportunities, you need to understand emerging 21st century business models of the education business. To understand a new business model, step one is to understand the kernel of value in the legacy model.

Here's a slice at an ongoing message board about education. I'm responding to a participant who said first that "our universities and colleges are doing a creditable job" and second that from his point of view, the problem resides not in "stupid" students, but in "lazy" students.

And this is my response:

You say . . ."for the most part I believe our universities and colleges are doing a credible job."

That's where we disagree.

Very good point about lazy vs stupid. I think that really helps clarify the problem.

What I see is that a "credible job" in the 20th century is not good enough in the 21st. When high schools were invented in the early 1900's they had two purposes. First was to train an agricultural labor force to learn the new behaviors they needed to work in factories. Second was to filter out the hard working "smart" ones for the professions and management jobs. And then there were the elite schools, whose job was to perpetuate the elites.

My own take is the GI Bill brought in a much larger pool on which schools could do their job. Since every man who was in the War had a chance to go to college, the number of smart/hardworking ones that were filtered out was much greater. I think it's plausible to argue that this new generation of college educated ex soldiers was the real driver of the US economy in the 1950's and 60s. Just as the addition of college educated women in the 70's and 80's's helped fuel the boom of the 1990's.

In both cases there was also a great self-selection process. The smart/hard working ones took advantage of the opportunity. Others didn't.

As the economy is evolving, schools have also evolved, but a lot slower than the economy. Today the new purpose of the education business has to be to educate everyone. That could mean that the problem to be solved is exactly the laziness you point to.

My experience tells me that kids, like most of us, get lazy when they are bored or scared. Is it possible that high school makes this worse by boring and scaring our kids?

I've seen lazy/stupid kids in the classroom, spend hours practicing their jump shots on the basketball courts. I worked with one lazy/stupid high school kid in the classroom - who was headed for being drop out - become a good writer when he was engaged outside the regular classroom.

We agree that learning is the student's responsibility. Nobody can learn for you. But the new job of education is to create an environment where the chances of student learning are much, much higher. Just as I think the job of government is to support an environment in which it is easier for people to make good decisions, the job of a school is to create an environment where it's easier for students to make better decisions.

So. . . suppose our schools were organized to put more effort into helping kids identify their interests, and then give them the time and support to follow those interests. And much less time into "chalk and talk" in a classroom. I've seen lazy kids change almost overnight when they had the freedom to work, instead of sitting in a seat and listening and then take a test.

When I was teaching, the most successful experiences was setting up teams to work on real life problems. It turns out that almost everyone loves to solve problems, if the problems are real to them AND if they have the skills to solve them. It's why computer games are so popular. When the purpose of education is to create life long learners, not to pass a particular test, it's not that critical what the particular problem is.

I think that we can get the biggest bang for the buck through apprentice and interning programs. Get them into real life. The hard part is having serious mentors to guide them and point them to the resources they need to get to solve the problems they will face. There are lots of "educational theorists" who say the same thing.

Problem is that the present organization of schools leaves very little time or focus on this approach. They're too busy getting ready for the next test to "prove" they are doing their jobs. Or they are getting rewarded for all kinds of off task activities. It's only natural that the educators, "blame the customer." I've seen many dysfunctional organizations do the same thing.

Riding the tsunami

First come the tremors. Then comes the earthquake. Then comes the tsunami. Then everything is up for grabs. No, I'm not talking about the invention of the laser printer or Acrobat or digital printing or the Internet. For print manufacturers, that's old news.

I'm talking about the reorganization of the global financial system. While we are still in the middle of the earthquake and its aftershocks, keep in mind that the real damage on the ground is usually from flooding.

In yesterday's Williamsport Sun-Gazette, published in North Central Pennsylvania, I found this:

Top lawmakers predict massive deficit in state

Harrisburg - The deteriorating economy and rising costs for for such big-ticket items as health care and prisons is leading the state government on a path to a massive deficit that will require a tax increase to erase, two senior state legislators said Monday.
. . .
They also said that it will be difficult, if not impossible, to make up the difference by cutting costs alone, either because legislators and unwilling to take money out of programs and services or because state government is already squeezed.

This story could probably be used in every state and city in the United States. In many states, you would probably have to add education as a big ticket item. Once you consider that most people don't have the money to pay more taxes, the shape of the tsunami becomes more clear.

What does this have to do with selling Print?

For a while, I've been on a soapbox about advertising being a shrinking market. Those who are in the game should take what's left on the table and move to greener pastures. The greenest pastures for Print are in education, health and government. Since everything needs an acronym, it's the EHG market.

Once the borrowing costs for education, health and government become unsustainable and real people don't have the money for more state and local taxes, something is going to have to change. Since improved communications is the low hanging fruit for cutting expenses and improving service, it's a pretty safe bet that there will be an eager market for communications that are better, faster, cheaper.

The Internet is good for giving and getting information, goods, money, or entertaining a niche market of users. Print is very good for changing culture and improving learning on the ground. Print is a "must have", not a "nice to have" in the communication ecology when dealing with the Public. State and local governments are required by law to serve the Public.

Bad news for government could be good news for print manufacturers.

The trick is inventing, producing and selling the Print based products that make EHG faster, better, cheaper. Digital printing is at the leading edge because it allows economical print for groups of 30 to 150. That's where culture changes.

Consider the problem of education. The purpose of schools is no longer separating out the smart ones and making sure everyone else shows up on time to work in a factory. The chances for a good life now depend on an ability to think, solve problems and play nice with others. The best media to learn how to think, not "get information," is Print.

Here's what I mean. Thinking is based on "compare and contrast." To think you need to hold at least two things in your mind at the same time. Then compare them, Then figure out which is more plausible and maybe right. Electronic media is slow, worse and more expensive to compare and contrast.

To see how that works out, try this. Read a newspaper on line. Then get a printed version of that newspaper and also get a highlighter, or a pencil will do. Put the newspaper on a flat surface and get a cup of coffee. The TV can be on in the background. Scan the newspaper while sipping your coffee. Every time something catches your "interest", highlight it. After about a half hour, go over everything you highlighted and mull.

Probably new connections between seemingly disparate pieces of information will connect, in some new way you hadn't thought of before. That connection is called a "new idea." After a bit of compare and contrast, that half baked idea might get fully baked. When it's ready to take out of the oven, it might lead to an innovation. Innovations are very valuable. Sometimes you can sell them for lots of money. Plus the cost of production is very, very low.

Then consider if you could do the same thing with any electronic media.

So it may turn out that the best, fastest, cheapest, most interactive way to learn how to think is a printed piece and a highlighter. Since everyone now has to learn how to think, it should be a growing market.

Presidential Elections, Brands and Selling Print

Presidential elections are to the communication industries what War is to the defense industries. The only metric of success is winning. Timing is everything. Budgets are unlimited. The newest technology emerges and is brought to the ground in the service of winning.

It's worth a look at the differences between the Obama and McCain campaigns to get a glimpse at the 21st century communication ecology. My view is that McCain's strategy was from the 20th century. Obama's is from the 21st. Forget, for now, the content of the messages. Instead look at the campaigns from a "business" point of view.

First, Obama, Inc., invented a new business model. In the 20th century, revenue came from big customers. The risk is that losing big customers can really hurt. With a revenue stream from 2,000,000 small customers, the risk of losing one or two or a thousand is mitigated. The incentives of pleasing a group of big customers is replaced by a brand that appeals to masses of small customers. I'm thinking this may resonate for the printers whose client list included Lehman, Wachovia, Bear Stearns, or AIG.

Second, Obama, Inc. did not assume the hegemony of the 20th century mass media. They used the Internet to build a separate media channel, below the radar of MSM (main stream media). McCain, Inc. stayed with the old political model of raising money and giving it to TV. Note that in the last week, Obama,Inc.'s response to character attacks was to distribute a 15 minute "documentary" on the Keating Five. They didn't buy 15 minutes of national airtime. They sent the video to their network for free. Better, faster, and most important, cheaper.

Obama, Inc invested 2 years in building their new media channel. A long disciplined step by step strategy. No room for the short term hit. They understood that the "technology" of the internet may be a necessary condition of success, but they also understood that it was by no means sufficient. They used the small contribution to locate real customers, not just tire kickers.

As critical mass emerged from a number of customers, they supplied small activities to turn those customers into clients and then into communities of clients. From the politics business point of view if you don't get the volunteers on the ground, you've got nothing. Enthusiastic clients are always superior to paid staff to build a customer base.

This 21st century business model is more flexible, less expensive, and thus more effective than the mass market 2oth century model. When some unexpected event comes along, flexibility, intelligence trumps almost everything.

So, how does this strategy help in figuring out how to sell print?

1. Locate your customers.
These are the people who are buying what you are selling. Don't waste much time convincing or educating. If you have a product that some people want to buy, find them and sell it to them. If you don't have a product that some people want to buy, invent a new product.

2. Turn your customers into clients with a consistent series of small exchanges.
In politics, it is the giving of money. In printing, those small exchanges depend on where you are and what your customers are interested in. It might be a series of newsletters sent every two weeks to your customers. It might be a series of events focused on marketing or the problems of small business or the latest in new technologies. it might be a series of ultra short run books, authored by your clients. But whatever the content of the exchange, it has to be a series. One shot hits are a waste of time, focus and money.

3. Turn your clients into a community of clients.
Encourage them to talk, email, exchange with each other. You are the moderator. They supply the content. Perhaps you might consider a "customer advisory board" to give you the information you need to improve your customer facing performance. Or a once a month? or every two months? "best customer meeting" to brainstorm new developments and emerging needs. Xerox Premier Partners, Adobe User Groups, Salesforce.com user groups are models to look at.

Instead of "educating your customers" set up the media channel that allows them to educate you.

Important Note: This only works if you have a product that someone wants. If you don't, better go back to a 20th century model and keep your fingers crossed.

Finanical Meltdowns, Brands and Selling Print

Financial equity is the money denominated indicator of trust in predictions for the the future. When trust breaks down, financial assets start to disappear.

Brand equity doesn't have as clear indicators. But it can be described as the customer's trust about what will happen when they next buy something your company. When trust breaks down, they look for someone else to buy from. If your customers find someone else and the cost of change is worth it, customers start to disappear.

Given how easy it has become to find someone else, and the very low cost of change in buying print, it's not a pretty situation for printers.

For a print sales person, the brand is created over time by the customer's experience when buying from you. It is not created by glossy brochures about your capabilities or by "educating the customer" about why your company is better than the next guy.

It's as simple and difficult as giving the customer a good return on time, ROT ( first coined by Dr Joe Webb)) for the complete transaction of purchasing your product.

The complete transaction starts at the estimate request. Then the clarification of specifications. Then the delivery of the price. Then the negotiation of the price. Then the submission of files. Then the transfer of proofs. Then putting pigment on substrate. Then changing the output of the press into the deliverable product. Then the delivery of the product. Then the invoice sent. Then the payment received.

Then repeat as often as possible.

In our new world of widely "good enough" pigment on paper, the competitive advantage has to come from maximizing the ROT for the customer. Your brand is probably no longer defensible on the basis of the "unique quality" of the product. After years of ruthless business competition and smarter machinery, there is little significant difference in most products.

Competition has now moved to the other parts of the buying process. Contrary to conventional wisdom, the issue is predictability, not speed. Predictability creates trust. Trust creates confidence in future performance. Confidence in future performance is Brand Equity.

This suggest that you have fewer meetings about that next marketing brochure or new improved website.

Instead invest your time focusing on how long it takes to answer the customer's call; getting her the estimate she needs when you said it would be received; proofs delivered when you said they would received; press checks happening when you said they would happen; impeccable finishing; real time information on delivery status. And clear invoices that correspond to the estimate and clearly outline whatever changes were made and how much they cost.

First make sure the plumbing works. Then worry about being a "service provider" or a "communication partner" or a "consultative salesperson" or a "communication solution provider solver."

Selling print is actually a very simple business. But then, lending people money and getting them to pay you back is also a pretty simple business. But even simple businesses can get complicated when you don't mind the store. Witness Indy Mac and Lehman Brothers.