Canvas Magazine | Say Cheese by Conduit, Inc.

supporting print sales & Marketing Executives

July 2010

Say

Cheese Photo merchandise creates new revenue stream for print sellers

Sponsored by

CANVAS july 2010

amantha is the Director of Marketing for a major medical distribution company. One of her biggest tasks each year is to coordinate collateral material for tradeshows and the corresponding client meetings. The problem is that every year she produces material that is generic to the customers and not compelling enough for them to pack into their already stuffed suitcases. In turn, she ends up with an excess of wasted brochures and a disapproving look from her boss. This year, Samantha wants things to be different. She

ers alike, offering an emerging revenue opportunity

wants high impact material that is relevant to the clients

for the printing industry. Demand for these types

and she doesn’t want any waste. She called Leslie, a

of products grew marginally in 2009, to about $1.2

sales representative from a small independent printer

billion. As stated in the 2009 PMA Industry review

that had been courting her. After Samantha described

and forecast, “The tough economic environment is

her challenges and her goals for this year, Leslie smiled

expected to limit the prospects of these products

and said “Say cheese because I got just the thing!”

in the personal expression and gifting spaces. With

The global revenue from custom photo merchandise reached $1.4 billion in 2007, according to IDC (International Data Corporation), which was a 64 percent increase from the $829.0 million in 2006 revenue. According to PMA (The Worldwide Community of Imaging Associations, pmai.org), printed photo specialty pages worldwide have increased at a compound yearly rate of 56 percent, between 2007 and 2011. InfoTrends Inc., a long time printing industry part-

InfoTrends Inc., a long time printing industry partner, predicts significant growth coming from personalized photo books, calendars, note cards, and folded cards as new customers catch the photo specialty wave and existing customers increase purchasing.

ner, predicts significant growth coming from personalized photo books, calendars,

print and album alter natives, industry executives

note cards, and folded cards as new customers catch

agree in the 2008 PMA Photo Book Report: photo

the photo specialty wave and existing customers

books currently face obstacles like low awareness

increase purchasing.

and high project abandonment rates online.” Print

Photo Merchandise, a broad category that includes

salespeople have proven to be conduits for the in-

items such as photo greeting cards, photo books,

dustry’s products and services. Now they may be

photo calendars, enlargements, and photo mugs has

able to raise the awareness of photo merchandise,

caught the attention of consumers and photofinish-

while adding a revenue stream to their business.

CANVAS P5

Say Cheese

Relevance to Printers

their current level of understanding photo books is not all they

With more than 70 percent of American

can rely on. They must be able to manage many different sides of

households owning a digital camera, there

the customer engagement.”

has been a significant move away from

You do not need to look any further than Mohawk Fine Papers

photo prints (film). However, more con-

to realize the relevance of photo merchandise products. A cor-

sumer control and interaction creates new

nerstone paper supplier, Mohawk prides itself on providing in-

opportunities. A need for custom experi-

novative substrates for printers. In the 1990s, they made a stra-

ences and specialty printed products fits

tegic decision to embrace digital printing by creating a line of

the printer’s profile perfectly.

papers specifically for digital presses. Recently, Mohawk further

According to Mike Pannagio, founder of

cemented themselves in the market by purchasing LabPrints, a

DME Holdings, a $100 million integrated

comprehensive software and service solution that links profes-

direct marketing organization and 50%

sional photographers to professional labs.

holder of RocketLife, “I believe most print-

According to Chris Harrold, VP, Business Development, Digital

ers prefer to print and photo type products

Technologies Group at Mohawk, “The opportunity for commer-

hit their sweet spot. However, companies

cial printers is enormous. They have the equipment and the out-

like DME have learned from experience

put expertise. Meanwhile, 75-80% of the population doesn’t know

that we must do much more than print to

what a photo book is. What an opportunity!”

be successful. Our focus has switched from output to outcome and offering integrated

Ripe Markets

marketing services, not just print.”

When Leslie presented the idea of creating photo books, Saman-

Bruce Watermann, Senior Vice Presi-

tha didn’t get it right away. She thought photo books and person-

dent at Blurb Inc. agrees. “Sure there is

alized calendars were for the business to consumer environment.

relevance for printers. However, it isn’t just

She wondered if there was an opportunity in the B-to-B space

about partnering, it is also about learning.

and how it would apply to her dilemma. Leslie smiled again and

Commercial printers need to realize that

began to explain how her management team decided to move

“ The relationship today between publishers and printers is really a B-to-B connection. But the end product is more often B-to-C. Marketing opportunities exist with the prosumer market for designers, agencies, and professional photographers.” – Jack Hatfield, VP of Sales & Marketing for CGX Publishing Solutions

from a strategy of preservation to a strategy of innovation. She continued by saying “Innovation starts with you Samantha. We want to provide the answers to your challenges and our photo merchandise solutions are right on target.” While many print sellers may think that photo books and post cards are reserved for the consumer environment, the B-to-B space is very ripe. As Pannagio states “We love the B-to-B space for producing RFP and RFQ books that provide a new and interesting way to display company offerings and proposals. It has worked very well for us in the automotive space as well as sports marketing.”

CANVAS july 2010

According to Jack Hatfield, VP of Sales & Marketing for CGX

Mohawk’s Harrold says, “The products

Publishing Solutions, “The relationship today between publishers

can be highly seasonal based on holiday

and printers is really a B-to-B connection. But the end product is

gift giving. However, when you only need

more often B-to-C. Marketing opportunities exist with the pro-

75 tailored books for a tradeshow or a con-

sumer market for designers, agencies, and professional photogra-

ference rather than use 1,000 pieces of col-

phers. In addition, ripe segments include events, traditional trade

lateral, why not customize.”

publishers and the general categories of travel and leisure.” Watermann insists that printers don’t need to give up on the B-

The products are highly tailored to the customer segment. Watermann demon-

to-C opportunity. “Most commercial printers are focused on the

strates, “They make great gifts to VIP’s.

B-to-B market place. However, if a printer wanted to go out and

In addition, books for fundraising make a

change their business model to focus on consumers rather than

very desirable gift. Books have universal

business, they simply need to understand the big picture. More

appeal. Microsoft uses a book created on

and more consumers are becoming familiar with self publishing

the Blurb platform for their Giving Program

and the percentage of people who make a book is still only 25% to

as a corporate gift.” He continues, “There

those who have digital cameras. We still need to get the message

is a lot of work with architects and any oth-

out to consumers of what is possible. But managing individual

er business that needs to build its brand.

customers is difficult and not something most commercial print-

The fact of the matter is that people don’t

ers have as a core competence, so acting as a fulfillment vendor is

throw hardcover books away. They will put

often the best and most efficient way to go.”

it on the bookshelf and keep it forever.”

Products?

The sales process

When Leslie demonstrated that Samantha could personalize 75

In order for print salespeople to connect

books for key client meetings she had her full attention. But, when

deeper with their clients, a high level of part-

Samantha realized that she could send cards with the photos of

nership and consultation is needed. While

actual prospects after the meeting and create follow up books for

photo merchandise offers great rewards, the

the hot list, her eyes lit up. Leslie cemented the deal by reminding

path to success for a print seller starts with a

her that there would be zero waste!

high level of empathy and strategic discussion.

CANVAS P7

Say Cheese

As Hatfield suggests, “The sales process

a great vendor. Vendorship is dead. It does not go far enough.

is relatively complex. It is cross functional

If a printer cannot find a way to become part of the customer’s

and requires resources from across the

strategy they are doomed to commodity hell and will never get

print company including finance, opera-

invited to the Christmas party. However, they may print the invi-

tions, and IT. There is always a significant

tation to the party. Me? I want to go to the party and not print

IT process on this. Clearly the sales pro-

the invitation.”

cess is not transactional. If we were to take a transactional approach, it simply would

Trends

not work. This will provide a barrier to any

When Samantha and Leslie started coordinating their new

printer who sees it as transactional.”

photo merchandise plan, the ideas seemed limitless. At one

Pannagio added “It is no longer all

point, Samantha stopped and said “What about Facebook?”

about print. It is no longer all about being

She was concerned because she had read that 35 million pic-

Where to start Pannagio: “By starting with a realistic assessment of their strengths. This includes their people and their technology. Leadership and innovation must be pushed to the forefront. Start thinking differently. Stop tinkering and start innovating. Hire people dedicated to providing VDP and integrated marketing services like PURLS and variable emails. Digital print is a big winner. If they have large format web or sheet-fed static print start to provide the opportunity for publishers to offer variable covers and static book blocks. Connect it to the web through PURLS and make it interesting. On top of that they have to start tracking everything for the customer. Not just the accounts receivable but the results of the programs they offer.” Watermann: “The new landscape starts with the right type of leader that is willing to take risks. Then you need easy to use software and tools. If you don’t have them, find a partner that does” Harrold: “Step one – you need to own a digital piece of equipment. Step two – You need an intelligent software platform to offer your clients.” Hatfield: “You need to have a front end solution that is robust enough to manage the photo book products and build the books and calendars. High abandon rates of custom publishing products are a huge issue the industry must combat. So encompassing an easy to manage software for the end-user is a key.”

Photo Book Market Millions of U.S. dollars $267

$326

$340

2008 (est.)

2009 (proj.)

$165 $44 2004

$81 2005

2006

Source: PMA Marketing Research

*U.S Photo Industry 2009 Review and Forecast – 2009

CANVAS july 2010

2007

tures were being loaded onto Facebook every day. “How do we compete with that?” Leslie smiled again and reassured her that her company was prepared to offer her a fully integrated solution. She also pointed out that the images were all low resolution on Facebook and that most people won’t do the work to create a hard bound photo book. That is where she comes in. Chris Harrold says “The opportunities exist where the highest value pages are. Certainly, social networks are becoming a part of every business. However, printers need to consider the opportunity in photo rich products.” According to Watermann, “Social media and how to use them to drive work is always on people’s minds. The biggest photo repository is Facebook but those files are low-res. The expectation is to get client’s high-res photos and become the place where people will go to retrieve them.” Other trends that will affect the photo merchandise and printing industry include price pressure, technology breakthroughs like the high speed inkjet like HP T300, and the growing interest in self publishing. However, the biggest and most sustainable trend is the focus on customers. With this mindset and a variety of solutions to sell like photo merchandise, sellers like Leslie will be grinning ear to ear.

Be sure to visit HP’s Graphic Arts about the future of digital print and variable data.

CANVAS P9

Fast Facts by Dr. Marnie Brow, University of California, Irvine

Type of Promotional Material/Activity Tested: The response rates of personalized cross-media campaigns, – including print direct mail campaigns featuring personalized URLs (PURLs). Sample: A random selection of 670 cross-media campaigns across 27 vertical markets drawn from MindFire Inc’s large database of media campaigns (more than 550 companies and 3,200 users worldwide use MindFire Inc marketing intelligence software and services to manage thousands of marketing campaigns). For an unbiased analysis of actual campaign results, the database was sorted according to certain criteria (e.g., sufficient number of recipients in a campaign; not internal MindFire Inc campaigns) and includes a 2009 timeframe to capture the most up-to-date information. Methodology: Analysis of performance data (website visit rates, response rates) from select customized, personalized cross-media marketing campaigns. Top-Line Results: • For the 670 campaigns analyzed, the overall average and median response rate results: Rates

Visit Rate

Response Rate

Average

5.10%

3.28%

Median

1.71%

0.92%

• Overall results across campaigns/verticals studied (95% confidence interval): Visits %

Response %

Low

High

Low

High

4.4%

5.8%

2.7%

3.9%

• Interpretation: Results for 95% of campaigns will fall within these ranges (not that a company’s campaign will achieve these results 95% of the time).

•T he industries that saw the highest number of people to whom their marketing campaign material was sent visit their personalized URL (PURL): Top 5 Industries by Visit Rate (10 Campaigns or More) Industry

Visit Rates

Insurance

13.88%

Manufacturing

13.20%

Retail

8.48%

Not for Profit

7.69%

Other trades and services

7.08%

•T he industries that saw the highest the number of visitors to a PURL who performed the desired action (e.g., submitted information) on the website: Top 5 Industries by Response Rate (10 Campaigns or More) Industry

Visit Rates

Manufacturing

11.85%

Insurance

10.70%

Retail

6.74%

Not for profit

74.52%

Other trades and services

4.18%

•T he average response rate across all industries with 10 or more campaigns was 6.5%. •N ote: The Response Rates of Personalized Cross-Media Marketing Campaigns report discussed here also reviews pertinent content from three recent reports from the DMA, PODi, and the CMO Council on direct marketers’ attitudes about personalization, their business practices, and campaign results. Readers here are encouraged to download the report to see how they relate to the original research conducted by Dr. Brow.

Take-Away: From the Executive Summary: “ In the last few years, customized, personalized marketing campaigns have been posting strong results compared with traditional, static campaign styles. Regardless of industry or business descriptive, well-designed and well-executed personalized marketing campaigns clearly demonstrate their ability to outpace the competition. This report provides a look at some of the data and conclusions that support that claim.”

P10 CANVAS july 2010

CMO Council Marketing Facts • Most advertisers plan to manage the majority of their research marketing in-house as opposed to utilizing an agency.

• 52% of advertisers said they would manage 100% of their 2005 spending on both paid inclusion and organic SEO in-house.

• On average, advertisers said they would outsource 28% of their spending on paid placement and 29% of their organic SEO through agencies.

• According to a report by The Logic Group, loyal long standing customers account for over 50% of a company’s annual sales, they are also higher value customers happy to pay premium rates of around 30% to 50% more per transaction.

• Most emails sent will have between a 33% to 67% undeliverable factor depending on spam filters and blockers.

• Marketing messages to the primary inbox will swell to an average of more than 9,000 annually in 2014, according to Forrester’s U.S. Email Marketing Forecast.

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CANVAS P11

“ Five Problems You Can Help the Chief Marketing Officer Solve” By Linda Bishop

The shortest route to any sale is diagnosing pain and curing it. Here are five problems the CMO would love to solve and how you can help. 1. Declining Profitability: Storefront solutions can help organizations reduce overall costs by cutting soft costs and hard costs. Marketers can put all digital assets in one secure location and access it anywhere, any time. They can manage campaigns, order print-on-demand and access inventory. Talk to the CMO because they can authorize the purchase. 2. M ature Markets: In our fast-paced world, new ideas are born, live and die quicker than ever. For marketers, that’s a problem because it’s harder to grow in mature markets because you must snatch market share from competitors. One success strategy in mature markets is niche marketing. Variable data printing is perfect for marketers who are targeting a niche. If your customer is in a mature market, find out if they’re exploring niches. Tell them how you can help them with targeted campaigns. 3. Increasing Competition: If your customer faces increased competition, they need strategies to stand out and get attention. If you sell wide format, introduce them to new ways to make an impact with banners, oversized posters, stand-ups and large-scale point-of-purchase. 4. P roviding Sales with Quality Leads: I suspect you would like to solve this problem as much as your customer would! One way to do that is by well-thought out leads nurturing campaigns. This marketing tactic helps companies identify prospects who raise their hands and say, “tell me more,” and then provides them with information to generate sales. Learn more at http://www.marketo.com/b2b-marketing-resources/leadnurturing-definitive-guide.php 5. Declining Customer Loyalty: Recently I read a great article called “The Decline of Brands” by James Surowiecki on www. wired.com. Suroweicki says we live in a “What have you done for me today?” economy and that’s why there are great opportunities for printers who help customers create loyalty programs. I recently spoke about this in LA at the PIASC Awards Luncheon. My presentation is posted at http://www.slideshare.net/thoughttransformation/piasc-keynote-presentation. Good Selling!

P12 CANVAS july 2010

Beliefs that limit a salesperson’s performance:

Good Salespeople are Problem Solvers

by Dave Kahle

“Good salespeople are problem solvers.” Or, so the illusion goes. That belief ranks high on my all time list of the beliefs that most limit a salesperson’s performance. This one is especially insidious because it is so commonly held, without reservation, by such a large percentage of sales managers and salespeople. And it sounds so reasonable. The world is full of sales managers who

gravely proclaim that good salespeople are good problem solvers. Salespeople who use that belief to give direction to their view of their jobs are found in every sales force. The problem with this self–limited belief, as in many such ideas, is that there is a grain of truth in it. Yes, good salespeople are good problem solvers. However, they are so much more than just problem solvers. And, when a salesperson or manager focuses on just that small piece of a salesperson’s job, it eclipses all the other more pertinent ideas and limits the salesperson’s effectiveness. It’s just human nature to live up to the visions we carry about ourselves and allow our beliefs to dictate our actions. And when our beliefs are out of touch with reality, our actions are not nearly as effective as they could be. We see what we look for. And, we don’t see nearly as much of what we don’t look for. Salespeople, then, who see themselves as “good problem solvers” naturally look around for problems to solve. In so doing, they miss huge opportunities to assist their customers in ways other than problem solving. In fact, many of the best salespeople don’t look for problems to solve, they create discontent in their customers by showing them better ways to do things. Here’s a real–life example of a “problem– solving” salesperson. I was asked by one of my clients to work with his sales force. The salespeople were having trouble closing the sale. Here’s what happened in one sales call I made with one of their salespeople.

P14 CANVAS july 2010

Beliefs that limit a salesperson’s performance

We were selling HVAC equipment, and

got along OK. At least until last week, when we had a heat wave.

the salesperson had an appointment with

The air conditioning had to work so hard that it froze up. So we

the prospect. We met the prospect, and he

unplugged it to let the ice thaw. As the ice thawed, it dripped

explained that the building had been add-

through the acoustical ceiling directly onto the president’s desk.

ed onto several years before, but that noth-

So, that’s why we’ve decided to do something about it now!”

ing had been done to expand the capacity

Then I said, “What are you looking for in a proposal?”

of the air conditioning unit. The company

He said, “Just a ballpark figure we can use for budgeting purposes.”

now wanted to do something about that. The salesperson asked to see the area

I turned to my salesperson and asked, “What’s a rough estimate of what it’ll take?”

in question. He measured the square foot-

He responded, “About $3500.”

age of the room, taking detailed notes on

Then I said, “What can we do to make you look good in

a form attached to his clipboard. Then he asked to see the existing equipment. We

this process?” He said, “I just want to get this off my desk. It’s an extra project

went up into the attic where it was located, and the salesperson studied the existing unit, estimating the distance from the equipment to the addition. He ended his information– collecting by saying to the prospect, “I’ll fax you a proposal in a couple days. Will that be OK?” The prospect said yes. At this point, the salesperson, who saw himself as a problem solver, had done an adequate job of understanding the technical specifications of the problem, but hadn’t even begun to probe into some of the other as-

I don’t need right now.”

Let’s consider ourselves to be accomplished salespeople who can understand what a customer wants in a deep and detailed way.

pects of the sale. So, I intervened and asked the following questions. “If you like our proposal, what’s the possibil-

I said, “If we get you a ballpark figure, and a set of literature you can show to the boss today, will that help?” “That would be great,” he said. Finally, I asked, “How will a decision be made?” “Around

here,

the

president

makes all of those kinds of decisions. So, I’ll collect the information and give it to him, and he’ll decide what to do from there.” “Could we see him?” I asked. The prospect replied, “Would you?” “We’d be happy to,” I said. At that point, he set an appointment for us to talk to the president. Let’s analyze this experience. Notice that the salesperson, who thought of himself as a “problem

solver,” focused on the details of the technical problem. After all, what else would you expect him to do?

ity that you’ll buy it within the next few weeks?”

Unfortunately, in so doing, he missed what the customer want-

Here’s what he said: “Oh, none at all. I’m

ed entirely. He would have vainly spent hours preparing and fax-

just collecting information for budgeting

ing the quote, and then wondering why he didn’t close the sale.

purposes. We won’t actually buy anything

He was well equipped to respond to the technical specifications

until after the new fiscal year in January.”

of the problem, but didn’t have the faintest understanding of

My salesperson didn’t know that because he never asked. Instead, he focused on the problem to solve.

what the customer really wanted, and therefore, little chance of closing the sale. To overcome the limitations and boundaries of this belief, let’s

Next I asked about the “situation.” I

consider ourselves to be much more than just problem solvers.

said, “When we met, you said that the ad-

Let’s consider ourselves to be accomplished salespeople who can

dition had been completed a few years

understand what a customer wants in a deep and detailed way.

ago, but that nothing had been done to

Let’s consider ourselves people who can put together our prod-

upgrade the air conditioning. Tell me,

ucts and services into offers that give the customer what he/she

what’s changed about your situation? Why

really wants.

is this an issue now?”

We’re not problem solvers. We’re customer understanders.

He said, “Well, we added space to this

And when we get that belief, we rid ourselves of the bonds

building several years ago. It’s always

wrapped around our performance, and unleash our capabilities

been stuffy in the new addition, but we

for greater return.

P16 CANVAS july 2010

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