Canvas Magazine | Embracing Digital

supporting print sales & Marketing Executives

September 2010

Embracing Digital Get On Board, or Miss the Boat

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“ Everything that can become digital will become digital and printing is no exception.”

– Benny Landa, inventor of the world’s first off-set digital press

Publisher mark potter Marketing Manager caroline farley

P2 Back to the Future

MANAGING EDITOR lorrie bryan

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ART DIRECTOR brent cashman

Get On Board, or Miss the Boat

Editorial board lisa arsenault McArdle Printing Co. gary cone Litho Craft, Inc.

September 2010

Publisher’s Thoughts

Embracing Digital P8

Fast Facts Print in the Mix

CMO Council Marketing Facts

peter douglas Lake County Press

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dean petrulakis Rider Dickerson

Social Media Gains Strength

ron lanio Geographics, Inc.

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randy parkes Lithographix, Inc.

They’re supposed to attract good new business and increase volume.

In reality they do neither.

Best of Reflections

The Illusion of Low Prices

CANVAS, Volume 2, Issue 5. Published bi-monthly, copyright 2010 CANVAS, All rights reserved, 2180 Satellite Blvd., Suite 400, Duluth, Georgia 30097. Please note: The acceptance of advertising or products mentioned by contributing authors does not constitute endorsement by the publisher. Publisher cannot accept responsibility for the correctness of an opinion expressed by contributing authors.

CANVAS P1

A

Back to the Future About a month ago, I read a great column in “Parade Magazine” by Mitch Albom, author of “Tuesday’s With Morrie.” The topic was pinball machines and the dramatic decrease in sales that has occurred over the years. It seems that the explosion of video games likes

Publisher’s thoughts

Playstation, Wii, and Xbox or handheld devices like the iTouch have whittled the interest in pinball down to nothing.

According to Albom’s article, Keeping a Pinball Wizard’s Dream Alive, “In the 1930s,

there were around 150 small companies making some sort of pinball. As late as 1993, there were 100,000 machines sold in a year.” Today, less than 10,000 pinball machines are made annually and only one company does it: Stern Pinball. The interesting thing about Stern is that they seem to be embracing the sliding landscape. They are selling the nostalgia of pinball and the tactile feel and emotion that comes from working the flippers at a pizza parlor. In turn, they actually require all of their employees to play pinball for at least 15 minutes a day.

Does any of this sound familiar? Where else do we see technology grabbing gobs of share and old-school businesses falling by the wayside? It is obvious that print and pinball have a lot in common.

My perspective, however, is that the commonalities are not just a downward slide in sales and the elimination of manufacturers.

Print is nostalgic. It is tactile and it can help create real emotion. Just like the old pinball machine we used to play, print holds memories. We can flip through the pages of our old high school yearbook or we reference an old “Harvard Business Review” that had a great article on segmentation. Either way, print has staying power.

In addition to touch and feel, print is fun. The ideas and the technology that is emerging

from our industry are really very cool. QR codes, page-turning software, augmented reality, and virtual store fronts are just a few of the creative new tools coming from our business.

Maybe the greatest lesson we can take away from Gary Stern, president of Stern Pinball, is that business should be fun. Heck, life should be fun. Why waste your time muddling through a j-o-b that bores and exhausts you? Why not have a little fun? Why not take 15 minutes each day to play with the business? We can brainstorm new products or visit with clients and bounce ideas off them like they are a focus group. Either way, embrace the new day and have some fun.

Feel free to start having fun with the September Digital edition of CANVAS. Our lead article, Embracing Digital, has some great insight on why printers are struggling to sell digital print. We need a different philosophy for this day and age and this article will shed some light on how to get it done.

Enjoy, and have some fun.

Warmest Regards,

Mark Potter Publisher

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CANVAS july 2010

Embracing Digital

L

onger sales cycle, more work for less pay, inferior quality…

A business development manager for a large print company, Staci Smith, says that these are the excuses that she frequently hears from sales representatives who are reluctant to embrace digital. “I have run into several printers in just the past two weeks acknowledging that their reps just aren’t going to sell digital solutions, value-add, etc. And owners are not sure what to do about it.

They are growing concerned because they are starting to see their competition win business away with digital solutions while their sales reps continue to insist that the only opportunity is offset/long run. I think that sometimes it’s a matter of compensation—a lack of incentive to chase the smaller dollars. But in some cases it’s just not wanting to change and they are in denial, rationalizing that print will return if they offer it cheap enough.”

Get On Board, or Miss the Boat

Sponsored by

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CANVAS july 2010

According to Smith, reluctance and rationalization instead of eagerness and innovation can take sales representatives out of the game completely, and frequently they won’t realize it until it’s too late. This happened recently to one of her longtime company presidents. “I found out that one of my brand new accounts landed a large direct-mail, retail-based account with huge ongoing volumes. Then yesterday, I met with the president of the company who “owned” this retail account previously, and the sad thing is he knew nothing of the loss of this account.”

Smith says that according to the company president, the sales rep who previously “owned” the account insisted repeatedly that there was no digital opportunity there.

“Unfortunately they were selling at the wrong level (to the print buyer) instead of talking business solutions. The new owner of the account went directly to the marketing VP, talked strategy and offered a solution to their needs instead of selling print

“ Everything that can become digital will become digital and printing is no exception.”

as if it were a commodity. I predict there will be more growth in this area. Meanwhile, the company president I met with yester-

– Benny Landa, inventor of the world’s first off-set digital press

day is in shock, and now wanting to talk strategy.”

As illustrated by this situation, Susan Moore of DPI Inc., a print service provider, says that embracing digital is essential to survive

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Embracing Digital

in today’s print communications market. “Print companies need to change from a mindset of selling print to one of providing innovative marketing solutions and helping clients realize what is possible with new technology. We want to offer our clients the best possible options for their marketing efforts.” Moore points to the evolution of print from a craft industry dependent upon the skill of the person driving the equipment to a manufacturing industry driven by technology. “Print was basically a craft for a hundred years or more, but we’ve seen radical changes across the board in the last 15 years due to technological innovations such as the Internet and digital printing. Just 15 years ago, we could not print a one-off product. Now you’ve got Internet companies that have 100 digital presses printing photo books oneoff. And we’ll likely see even more significant changes in just the next 10 years, things that are hard for us to imagine now. If print companies are not embracing technology yet, they should soon—it’s not too late now, but it may be in a couple of years, and they will have missed the boat.”

“What we should be selling is a communication strategy that utilizes print as an integral part of a multimedia campaign.”

– Susan Moore of DPI Inc.

Just as many other technologies have made a transition from analogue to digital (video and photography being examples) rendering the former technology obsolete, many industry professionals believe that lithographic offset printing will go the same way in the not-too-distant future. Nearly 20 years ago, Benny Landa, inventor of the Indigo press and often considered the father of digital offset printing, predicted, “Everything that can become digital will become digital—and printing is no exception.”

An effective strategy for encouraging sales representatives to embrace digital should address pricing, compensation and culture collectively. One of the primary reasons for the failure of sales representatives to embrace digital is that their cultural mindset has failed to evolve as quickly as the corresponding print technology. They continue to think of print as a commodity, like it was in the last century, and consequently it is priced like a commodity

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CANVAS july 2010

and sales are compensated according to that tradition. The compensation model is essentially the same as it was for the century when print was a craft, with contracts for longer runs adding more to a paycheck than the shorter digital runs.

However, less volume should not translate into less value. “We are reminded daily that print is most effective, has greater value, when it is most relevant, and variable digital printing offers the opportunity to create relevance through personalization in a way that offset never can,” affirms Moore. Despite this established assertion, there is frequently less value associated with shorter runs and smaller volume—despite the added value that variable digital printing capability brings to a project. In short, customization and personalization are undervalued and underpriced, and the corresponding compensation reflects this.

As a result, digital printing is not embraced and not promoted by many traditional printers. “Marketers and their managers need to understand that we are no longer selling print. Print is an important element, but it’s just a part of the equation. What we should be selling is a communication strategy that utilizes print as an integral part of a multimedia campaign,” emphasizes Moore, a 20-year veteran in the print marketing industry. “By embracing digital printing, we can deliver our products faster and more efficiently in lower quantities, and with the added benefit of customization. With technology-driven solutions, we can focus on finding innovative ways to streamline our customer’s marketing efforts and provide seamless execution,” Moore concludes.

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

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Fast Facts A recent study by Deloitte and Harrison Group, “The 2010 American Pantry Study: The New Rules of the Shopping Game,” found that 92 percent of U.S. consumers surveyed have changed their grocery shopping behavior in the last two years. The survey found that nine out of 10 (89 percent) said they have become more resourceful and 81 percent say it is fun to see how much they’re saving with coupons or loyalty cards.

According to consumers surveyed, print coupons are a popular tool for saving money:

45 percent using more coupons received in mail 43 percent reading/clipping more coupons from newspapers 43 percent using more coupons available in store 39 percent downloading and printing online coupons 67 percent using at least one of these practices The study also uncovered that loyalty cards are very important to shoppers with 84 percent reporting having at least one.

CMO Council Marketing Facts Research conducted by Google Canada and OTX in March and published in June indicates that 81 percent of Canadian moms are searching for information before they head to the store.

(Source: Google Canada and OTX | Publication: eMarketer) The study “Canadian Moms Click for CPG” surveyed 4,896 women ages 18 to 75 in Canada including 3,806 moms to find that 76 percent indicated that search engines helped them learn more about consumer packaged goods (CPG).

(Source: Google Canada and OTX | Publication: eMarketer) E-mail dominated the mobile picture even more strongly than social networking did the desktop: If all time spent on the mobile Web was condensed into a single hour, U.S. Internet users would have spent 25 minutes in June checking e-mail. Portals would have received another 7 minutes, with social networks not far behind.

(Source: Nielsen | Publication: eMarketer) According to the Pew Internet & American Life Project, 34 percent of all U.S. mobile subscribers used e-mail on their phone in May 2010, compared with 23 percent who used a social networking site.

(Source: Pew | Publication: eMarketer)

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CANVAS july 2010

Social Media Gains Strength

T

oday I heard the news that Ben and Jerry’s (you know, the ice cream guys) is abandoning its e-mail marketing initiatives to focus

exclusively on social media advertising. Customers provided feedback that the majority of them would prefer to be contacted on social media sites. Going forward, it will send one e-mail update each year to customers, and focus on us-

by Dale Rothenberger, VP at The Winters Group & Associates LLC.

ing its Facebook and Twitter profiles to engage regularly.

Today’s smart PURLs and QR codes offer the customer benefits they do not have otherwise in this social communication environment. The customer can pick up targeted information and offer feedback.

Last week, Ford announced it was skipping the 2011 model Auto Show, choosing instead to unveil the newly designed Ford Explorer on Facebook. Obviously, Ford’s success of its purely digital Ford Fiesta Movement, has proven you can rely on the digital (and social) channel to build interest in selling cars.

Starbucks, became the world’s first consumer brand to achieve 10 million fans on Facebook. And on July 21, Facebook announced that it has passed the 500 million member mark—in just six short years.

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Is it safe to say that the mobile advertising equation is

blog on your site? Are you using video as

beginning to add up? According to Nielson, there are now

part of your messaging? Are your videos

63 million mobile Web users in the United States alone, and

findable on YouTube?

global mobile advertising will grow 19 percent to $3.3 Billion by end of this year.

This is the year for companies to jump into social media. Search Facebook for

This is really good news for our industry. Customers are now

your competitors. Set up a business ac-

in control—they have to raise their hands to ask for details.

count on Twitter. Participate on blogs and

Using today’s print technology to capture and nurture a pros-

LinkedIn postings. Find out what your cus-

pect until they are ready to buy uses every communication

tomers are experiencing so you can better

channel, and who knows better on how to collect and segment

recommend and be an active partner with

data once collected?

them as social media evolves.

Today’s smart PURLs and QR codes offer the customer benefits they do not have otherwise in this social communication en-

It’s no longer marketing as “eyeballs and ears” but rather “hearts and minds.”

vironment. The customer can pick up targeted information and offer feedback. In fact, message relevancy has been shown to increase conversion rates by as much as 20 times compared to the traditional method of one-size fits all messaging. What are you doing to keep up with technology in this social space? Have you opened a corporate account on Facebook? Do you have a

For more information on The Winters Group & Associates, visit www.wintersmg.com.

The

of Low Prices

I

They’re supposed to attract good new business and increase volume. In reality they do neither.

by Gary Cone

f you react to the economy by using

If lowering prices is a crucial function of

discounted quotes as a primary sales

your sales routine, you are not providing

tool, you are not alone. All of us have

the buyer anything that they can’t easily

been taught that lowering prices is

achieve with a few clicks on Google. Let

a natural path to follow to increase

the Internet be the source for low prices.

sales. However, this is a circular path. When

It’s your role to add value by understand-

prices are discounted 20 percent, sales vol-

ing and providing a solution that better

ume must be increased 25 percent just to

serves the customer’s needs. It’s not a

stay even. Few can ever catch up. The “lower

lower price that sells; it’s a better answer

prices” that are intended to bring relief to

and the buying experience that only you

sagging sales are instead creating new pain.

can provide.

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The Illusion of Low Prices

“Low price offers” attract shoppers looking for “the deal,” who have no intention of buying from you again unless the pricing can be matched or beat the next time around.

There is little chance you’ll

escape from this vicious selling cycle.

Discount Prices… and Then What?

Recently, I answered the phone, and George, owner of a midsize plant with six salespeople, immediately started talking: “I have the evidence. Discounting is not a path to success.”

Three months earlier, in an extreme effort to prove a point to his salespeople who were steadfastly holding to the belief that “lower prices sell jobs and attract good customers,” I encouraged George to present this challenge to his salespeople:

Whatever prices you get from our estimators, whatever adjustments we make to those prices, you take those final numbers, and for the next three months you have total authority to discount to get the job...and let’s keep exact track of the results.

George continued talking: “The total sales did not change. Our margins went crashing down. While we did pick up some new customers with purely low-bid ‘lower than acceptable margin’ work, these jobs proved to be one-time sales that could not be repeated without an equal or greater discount and the salespeople were unable to make up for the lower margins with other work. The conclusion is clearly evident: Price might attract a job, but it does not build sales that create repeat profitable customers. It is the salesperson and the value the salesperson brings to the customer that truly counts.”

Fortunately, you have many options. There are alternative approaches that can be mixed and matched to fit your style and your needs, and using these will help you avoid the disastrous consequences of falling prey to your own continual discounting.

1. Cut Costs First and Adjust Prices Accordingly Cutting costs and cutting prices are not the same thing. If you can figure a way to produce a job for 20 percent less, and make the same margin at that lower price, this is good! This is not discounting; this is a sustainable, profitable business practice. Cutting prices without the accompanying cost-cutting is a dangerous, slippery slope.

2. Negotiate Trade-Offs Trade-offs are fair game. When you can sell a job for less in exchange for a trade-off from the customer that nets you an equivalent savings, all parties win. The trade-off may be a substitute paper stock, an extended delivery date, or perhaps a written and signed contract for ongoing business—anything can be a tradeoff, and potentially a profitable one.

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3. Sell Before the Price Is Quoted The most effective selling takes place before giving a price – this is where the customer is formulating the buying decision. Get the customer to want to buy from you before the price is quoted.

• Have superior knowledge. Make the customer afraid to go to your competitor or to the Internet because of your technical expertise.

• Sell solutions to a need. Learn what those needs are—learn the emotional needs of the customer—and sell to those needs.

• Sell trust and security. More than anything else, the customer wants the trust and security that their purchase will meet their personal needs and expectations.

• Talk to the right person. Talk to the decision maker. Anyone else may be just following instructions to find a lower price.

• Have a passion for what you are selling. Price aside, and all other things being equal, customers lean toward the salesperson who has the most sincere interest and passion.

• Eliminate price from your sales vocabulary. When you eliminate talking about price, you have to be talking about some-

Opportunity abounds for the salesperson who is open for change, knowledgeable, has a burning desire to close each sale.

thing else—perhaps what the customer really needs and how they are going to use the product. (You’ll be surprised at what eliminating this one word can do for your sales!)

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CANVAS P15

The Illusion of Low Prices

If the customer, or even if you, (I hope it’s not you!) rebut these ideas by using Walmart or similar retailers as an example of low-price success, note that Walmart does not sell custom produced products, nor does Walmart sell services that require the personal assistance of a salesperson. (It should be noted, from a purely business/profit standpoint, Walmart does not “roll back” prices on items until they are able to project lower costs on those items—a practice from which we can all take a lesson.)

Becky’s Story Becky and I met at a regional sales presentation I was giving. A few months later, an e-mail from Becky popped up

I quickly realized that I had been inviting my customers to bargain for a lower price. I was ending every written quotation with, ‘I hope this price works for you,’ or ‘We might be able to do better for you on price.’

in my inbox…

“I was discouraged by a decrease in my sales and overwhelmed by what to do differently…I did not want to discount. I put my energy toward changing two things: Stop using the word ‘price,’ and focus on talking to the right person, (i.e. the actual decision-maker rather than the ‘easiest’ person to talk to). Both of these actions required me to move beyond my comfort zone. I’m e-mailing you to tell you the results.

I quickly realized that I had been inviting my customers to bargain for a lower price. I was ending every written quotation with, ‘I hope this price works for you,’ or ‘We might be able to do better for you on price.’ In telephone conversation, I was asking, ‘How does our price compare?’ or ‘Is this price within your budget?’ When I stopped using these phrases, and quit referring to price, the bargaining diminished instantly. By eliminating price as a subject to talk about, I was left to ask questions about what my customer needed and what was most important to them.

But most of all, I overcame my fear of going up the chain-of-command. For the first time, I talked to the boss before talking to the purchaser. When I found myself talking to the purchaser, I forced myself to learn how the decision was being made and who was making it, and made a point to be in contact with that person. No one bit my head off as I had feared – they are real people who, I have now learned, can direct more work to me – before the topic of price is ever raised. Now I sell before I quote.”

Opportunity abounds for the salesperson who is open for change, knowledgeable, has a burning desire to close each sale, and who is passionately focused on providing profitable results for both the customer and the printing plant. The Illusion of Low Prices is a dragon that must first be slain.

Gary Cone is vice president of Litho Craft and can be reached at gary@LithoCraft.com

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