Posts Tagged ‘Service’

My Wife is Probably Right

Monday, February 21st, 2011

Day 3, Bill Ruesch recession recovery diary

Dear Reader,

In my headlong rush to create a diary of my experiences in recession recovery, my wife says that I’ve been revealing T.M.I. She says that it is no body’s business how much I used to earn in the pre-recession world. Maybe she’s right. Probably she is right. She usually is.

My only excuse is that I want my readers to know that I’m not a rank amateur who has garnered a little information and decides to pass himself off as an expert. I’m also not a flop at selling printing who is now trying to make money in some other way. It often amazes me to see “experts” who have never actually done the job making tons of money selling real sales people their secrets. This may sound bitter, but my impression is that their secrets are nothing more than keeping their buyers from knowing how little they actually know based on their experience.

If they looked like this no one would be duped.

It doesn’t matter if these brazen showmen are selling on the Internet, at conferences, or at seminars. The show is what matters and I’ve never been good at the show. I have always tried to provide valuable service at reasonable rates. How about you, dear reader?

I’ve been employed full-time in printing sales for 35 years. For twenty of those years I’ve been self-employed as a printing broker or as I’ve begun calling myself an Independent Printing and Mailing Manager. For some unknown reason that I have never been able to fully understand, customers always think that my services as a Print Broker are going to cost them more. That’s just not the case. I find better ways to do their jobs and that frequently results in lower costs. Plus I negotiate to get better bids so that I can create a margin that I can live on. Whether my customers went to the same sources for bids or use my service, they’ll pay roughly the same price.

Whether you are a broker or a captive sales rep, what are your thoughts? I’d like to know.


 

Stealing Customers for Profit in the Recession

Friday, July 31st, 2009

Have you ever been woken up by cold water splashed in your face? That was what happened to me when I read a blog post on another site the other day. To paraphrase (because I failed to bookmark the site and can’t find it again–drat) he said that those in the printing business should not hold expectations that 2010 was going to improve the state of the market. Furthermore he said that there were only two things companies could do to remain viable during the coming year. The first, was concentrate on customer retention. In this market losing customers is like losing blood. Do whatever you have to do to stop the loss. The second thing  was steal customers from the competition. Honest to goodness, steal was the exact word used. It wasn’t attract new customers, it was steal customers.

Part of me understands his point while another part of me is revolted. In a down economy new customers are rare. Prudent people rarely start new businesses during hard times. Banks are loath to loan and entrepreneurs are careful.  So if new customers aren’t springing up that only leaves current customers. If they aren’t your customer, then they are someone else’s. There is something very distasteful to me about targeting some other company’s livelihood knowing that if you win you may be causing their demise. That is what the emotional side of me says.

The pragmatic side says that you have to face reality. If it takes stealing a customer to keep your company afloat, and allow your employees to put food on their tables, that’s what you have to do. Strike first before they strike you.

pirate skull and knifeIs that cutthroat? Maybe, but business is a jungle and it is survival of the fittest. Don’t we benefit as a society if those moving the bar up are the ones surviving? Don’t we get better goods and services? For the sake of all shouldn’t those weaker companies be weeded out? For the good of the garden thinning has to take place. OK, I’ve managed to mix at least three metaphors in the previous sentences, but you get my point–right?

Stealing customers might be a correct term even though it’s hard to swallow (yet another metaphor). I remember talking to a travel agency some years ago about their marketing. They got tired of fighting for position in the middle of the pack and decided to break out by being unique. What they did is identify ten commercial accounts who did large volumes in travel. Then they determined how much they were already spending on newspaper and magazine ads. They totaled their radio expense. In short they added all of their marketing costs and put it into an imaginary pot. Then they looked at those ten prospects again and divvied up the pot ten ways. During the next year they focused all of their energies on the golden ten. All they had to do was get three and their business would increase. When the dust settled, and the year was over they had six out of ten, and business more than doubled for them.

Those ten golden commercial accounts had been buying travel services from someone else. In effect, the upstart travel agency stole their customers. Or as I like to think of it they won the business. Because they were focused on only ten, they could service the businesses like they had never been serviced before. It wasn’t theft, is was a reward for a job well done. To not reward them with business after this effort would be criminal.

To stay afloat, and even improve during an economic downturn find a way to earn more business. Whinning all day long that business is bad won’t do it. No that won’t do at all.

Are Paper Prices Just a Shell Game to Rip You Off?

Friday, May 22nd, 2009

Are paper prices going up, or going down? You might expect that the recession would force them down, but it isn’t that easy. Why even worry about it? The simple answer is because paper is such a large part of printing. Dick Stahle of Spectrum Press, a web printer, says that they are doing jobs where paper eats up 75% of the bid. Even on sheetfed jobs 50% to 60% paper expenses are not unusual. So, if as you might expect with the recession and all, if paper is going down, shouldn’t you expect to see much more favorable pricing?

Paper prices are a true commodity item and are generally ruled by the law of supply and demand. Currently we have a situation where several paper mills have closed. Mill floor inventories were sold at bargain prices. The printers who took advantage of those deep discounts could lower their prices, at least temporarily. Unfortunately we aren’t seeing much of that inventory in the market currently.

One of my local printers found themselves in a difficult situation because they took advantage of a great paper buy and passed the savings along to their customer. The sales rep admitted later that he didn’t discuss the reason for the low price with the customer. Big mistake. Shortly thereafter the customer came back and wanted to reorder. The mill closeout stock was no longer available and to say that the new price upset them would be an understatement. No amount of talking could persuade them that they should have been grateful for a previous bargain. Tempers flared and the customer took his printing business elsewhere because he, “could no longer trust them!” Wow, you’d think that once the situation was explained the customer would have been happy. No way. They get a big discount because of a windfall paper buy, then they expect it all the time, even if the printer loses money–how is that fair?

The truth is that mill closings decrease supply, which should in turn, increase the price. Prices however, haven’t changed much lately. They aren’t trending up or down. Why? Because demand is also down. It is also true that  the printing industry has been taking it on the chin during this recession/depression. Some say that nationally printing sales are down by as much as 40%. The decrease in supply plus the decrease in demand, equals status quo.

Supply and demand doesn’t tell the whole story. Print customers have also been suffering during this economic downturn. When there’s less capital coming in there is less ability to pay out, so they cut back on marketing. We don’t need that brochure right now, or the direct mail package can be simplified, or let’s squeeze  the printers for better prices. 

Printers all over the country have responded to this demand by lowering prices, often to dangerous levels. Some take no-profit jobs just to keep the presses busy. Once one printer cuts costs, competitors follow suit, or else risk losing business. In this scenario no one wins. The printing customer loses, because even though they might get a temporary advantage, in the long run they are unwittingly contributing to driving their suppliers out of business. When the recession ends, they will find that their choices of vendors have shrunk and prices will go higher than ever. The printer loses because lowering the prices to the bone removes any margin for error.  Printing as I’ve discussed in previous blogs such as Quality, Price, and Service–Pick Two (link), is a low profit, equipment intensive business. To leave a press idle is an enormous drain. Thus it is better to run it at break even, at least for awhile, than it is to go dry. No printer can survive long working at break even because break even doesn’t really exist. Sooner or later someone is going to make a mistake that will require a reprint. Since there isn’t any buffer, the bottom line quickly shifts from break even to loss.

For those print buyers out there, let me say that we know that things in this market are tight. There is a real temptation to make up for your slim profits by riding your suppliers or changing to new ones. Please be cautious and reasonable. Just because a desperate printer offers a great price doesn’t mean you should take it. The reason for that price could be that they are on the brink of bankruptcy, or some other problem that you don’t know about. The danger in this reckless pricing is that it establishes low water marks that can’t be sustained. You will want to keep the lower prices and maybe insist on it.  That’s just the nature of business, but resist the temptation. Try and work with printers and other vendors who run lean but still profitable businesses. Trust me, pardner, you won’t like your options if at the end of this downturn all the guys in white hats are gone, and the ones in black are all that’re standing.

When I became a broker, I dreamed I could serve customers best by hand-carrying their jobs to printers who were the best fit, instead of attempting to bend their jobs to fit the printer where I was employed.

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© Bill Ruesch, Talking Through My Hat, 2014. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Bill Ruesch, Talking Through My Hat with appropriate and specific direction to the original content.