Relationships

May 30, 2009

relationshipsThe older gentleman was not seeking a relationship. He had called earlier for pricing on a book. 250 copies perfect bound with 160 pages. Finished size was 8.5 x 7, a little different, but not unheard of.  Like many of our customers these days, he had no real knowledge of paper . . . something nice but not too expensive. Brian provided an estimate for the job and felt good about it.

A couple of days later, the gentleman called back. “How much would it be just to do the binding?” he asked.

Now, in better days the answer to this question is “Sorry, we’ll pass.”  Binding someone else’s printing provides opportunities for all kinds of problems.  There is a need for setups and waste . . . meaning you have to explain that if the customer brings 250 book blocks and covers, the binding equipment is likely to eat a few. Covers have to be cut a certain way for perfect binding and space has to be allowed for the spine. There’s the problem of trim and margins and where the page numbers go . . . all things we look at when we print a book. All things that a customer who has never printed a book before doesn’t know.

But Brian liked the fellow and we certainly needed any kind of order, so he said “yes” and tried to explain all of the complexities that the old gentleman would need to know. Brian also asked why we wouldn’t be doing the printing.

“Office Despot beat your price on the printing,” was the reply. “But they couldn’t do the binding.” was the part he didn’t say.  Besides, when getting the lowest price is the object, the details don’t matter, do they?

We have been fortunate to have some really wonderful customers over the years.  For instance, the consultant, whose books we have shipped all over the US.  She works with government agencies and is really suffering from budget cuts now, but we’d do anything for her.  Or the school that seems to understand just how tight things are right now and sends checks almost instantaneously after jobs are complete. Or the construction company that is always in a hurry, but so very pleasant and easy to work with. Or so many more . . .

We’ve had a few customers that have strayed and come back; and lately, with the bad times, we’ve lost a few.  Some have disappeared altogether – out of business. We lost the educational establishment that was so devoted to the local community that they sent all of their printing to the low bidder in Atlanta. We’ve also lost a couple that have trimmed printing out of their budgets altogether.

The one that hurt the worst was a long-term account, a non-profit. We never did all of their printing, but for years we did the bulk of it and we supported them with fairly frequent donations.  I was worried a little when management changed a couple of years ago, but we continued along for awhile. One day, I received a request for pricing on all of the items we had printed for them.  I was led to believe that it was budget time and that numbers were needed to prepare for the next year.  I was naive . . . they were going out for bids and I missed it. We lost most of the business.  Shortly thereafter, Poor Richard received a request for donations for the following year.  They wanted a relationship, but not the kind that works for everyone involved.

Back to the gentleman and his book. Poor Richard grumbled and tried to make sure that the i’s were crossed and t’s were dotted. Both Brian and I had the same conversations with the customer.  First, we tried to convince him that it would be much better if we were allowed to do the whole job. He had already committed to Office Despot. All of their specs were the same, he said, but the price was cheaper.

Then, we tried to go over the details and repeatedly emphasized that we would not be responsible for waste or misprints. The old gentleman said that he understood.

When the job came to us, it was not a surprise. He delivered exactly 250 books. The quality of paper was poor and the quality of print was mediocre. Best of all, the book blocks had been miscut. Page sizes varied by about 3/8″ within each book. We pointed this out to the gentleman and did the best we could.  We did not put the finished product in Alphagraphics boxes.  The old gentleman did not complain, but he did not receive a good value for the money he spent on the project.

It’s difficult not to worry about the state of things  . . . of business in general, the printing business in particular and our business in specific. Poor Richard still maintains that printing does not make a good commodity. Too much detail is required and every project is different. The products of printing turn out best when printers and customers work together, when they have a relationship.

Poor Richard is decidedly old school . . . I like dealing with people. I prefer to buy things from salespeople and whenever possible from local businesses. It’s difficult to have a relationship with a website or WalMart.  I enjoy the relationships we maintain with our customers and I try to make sure that they are mutually beneficial. And I still believe that even in a depression, value trumps price every day.

But perhaps Poor Richard is idealistic . . . or naive. It’s tough turning 50.

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Expose’

May 20, 2009

The phrase that kept coming to mind was “showin’ tail,” which can be defined as either the southern pronunciation of that age old and established grammar school activity where every student brings a frog or a doll or a younger sibling to talk about; or the presumably accidental revelation of the anterior part of the anatomy.

This one’s liable to get Poor Richard into big trouble. It’s not just that I’m making fun of a customer (again), but this time it’s a church. Worse, it’s my church.  I’ve resisted writing this short entry for a couple of weeks now and I guess I could resist some more. Or, I could use Flip Wilson’s excuse, “The devil made me do it!”

The church that beautiful wife and I attend is a small town congregation. It is a friendly, loving group of folks for the most part, with the occasional unpresentable member Paul talks about in 1 Corinthians 12. Like many small congregations, there are many folks there who “do church” on Sunday, a few who are really into church work, and some who really want to find out where God is working and join in.  It’s the last group that I’m probably going to be in the biggest trouble with, because what I’m writing about is their undertaking.

The undertaking is undeniably good.  It is Celebrate Recovery, which started as a ministry for those suffering with addictions at Saddleback Church. There has been a Celebrate Recovery program in Warner Robins, a larger city to the north of Perry where I live, but nothing in south Houston County, despite the fact that Perry is indeed the center of both the known and unknown universe.

Problem PostcardEnough rambling . . . after all, it should have been a simple enough task.  Poor Richard was asked to print and mail a postcard advertising the new ministry.  All well and good . . . at least until the art came in.  The photo of an obviously distressed woman weeping in front of a closed door was effective. It conveyed a message of desperation and would perhaps lead someone in that state to search for an answer beyond themselves.

But one aspect of the photo was just a bit distracting. The woman pictured is wearing a nightshirt and is sitting with her legs propped at an angle.  Technically speaking, she isn’t actually “showin’ tail,” but to continue in Southern vernacular, “she purty near is.”

I actually don’t know where the photo and concept came from. It’s possible that it could have been supplied by Saddleback Church as part of the promotional package for Celebrate Recovery.  If so, maybe the definition of “nearly nekkid” is different in Rancho Chimichanga, California or wherever it is that the megachurch is located. It is also possible that one of the ladies at our church found the photo and thought it appropriate.  Not having a depraved male mind, I suppose they could have missed the distracting part.

It really doesn’t matter much . . . Poor Richard’s never been much on printing photos of scantily clad women.  Not that we haven’t been asked. I’ve turned down a calendar job or two over the years and an exotic dancer once threatened to sue me for not printing postcards featuring her topless image.  (She really got angry when I told her that she looked better with her clothes on).  But I digress . . . this one just didn’t pass the propriety test, especially coming from my church.

I emailed the lady who had sent the art. “Approved by the pastor,” came the response.  Unfortunately, the pastor was out of town for a week and the postcard needed to hit the USPS before his return. I emailed a couple of respected leaders in the church. They agreed with me, but didn’t offer much in the way of suggestions.

Many of Poor Richard’s readers will understand that the way decisions are made in churches is unpredictable and occasionally unfathomable. Frequently, the cardinal rule of ecclesiastical decision-making is not to decide at all. So, after much prayer, some good advice and with godly wisdom and great courage; Poor Richard decided to sit on the project until the pastor returned.

What Poor Richard lacked  was only a bit of common sense. Fortuitously, the pastor brought some of that back with him from vacation.

“Put the church logo over her bottom,” was the essence of his short email response.

“Duh . . .” thought Poor Richard.

We did and the postcard was in the mail and not “showin’ tail.”


Measuring Value

May 6, 2009

My customer’s “tweet” says, “We’d like to know why creativity and concept development have no value in the ad world.”  Poor Richard knows what’s behind this one.

We used to call them “take the cake” episodes. When I was a teenager, my friend’s mom used this expression a lot.  I can still see Mrs. K, hands on hips, very exasperated with something that her daughter, me or one of our other friends had done.  Drawing a deep breath and pushing her eyeglasses up her nose with the back of her right hand, she would exclaim, “Well! doesn’t that just take the cake!” This was followed by a perfect military turn and usually a slammed door as she left us to contemplate the consequences of our misdemeanors.

We had a “take the cake” moment today. Brian, our production manager, received the customer at the door. He had come to inquire about business cards . . . not unusual.  Specifically, he had come to inquire about business cards we had already printed for his company. The cards were designed by an agency we work closely with and were produced for them. He wanted to know our price to produce the cards, because he felt he had been charged too much.

We already knew that there was some dissatisfaction with the original run of the cards.  His cards had originally been produced them on our house 80# stock and then we’d been asked to run them again on a heavier and nicer stock. Brian, wisely reasoning that it was better for me to get into trouble than him, excused himself and ran for the back where Poor Richard was actually about to cut the second set of cards.  Brian briefed me on the situation, but I don’t think I really grasped what the fellow had come for. I grabbed a sheet of the uncut cards and headed for the lobby.

I went to the front counter and introduced myself, handing my customer’s customer the sheet of cards and explaining that they would be ready very shortly. He examined the cards and stated that he didn’t realize they were being reprinted.  He objected to the size of a line of type and proceeded to ask again how much the set of cards would cost.  He stated an amount that he had been charged by the agency and that he had been purchasing printing and cards for years and thought the amount was excessive.

I explained that while our price to the agency was less than the dollar amount he had stated, it is quite understandable  that an agency would charge for the work they do.  Our customer, the agency, created the design, did the layout, provided the proofs and handled the details of printing. It should be expected that they would add a charge for their work to the cost of the actual cards. I also tried to assure him that he was working with a talented and capable group and that they had done a great job with his design.

The conversation remained polite, but just went off track at that point.  My customer’s customer explained that he had gone to the agency needing a name and logo for a new company, website work, and consultation for search engine optimization. He had ended up with a name, a logo, business cards and other such stuff; when all he had really needed was the website work. In fact, he had created the website himself for $50 and had received a lot of compliments. He fished a few times more for the price of the cards.  He didn’t say it outright, but it was evident that he felt he had been taken for a ride.

I tried, but I don’t think that I was successful at dealing with the real problem. The problem was not the price of the cards, but their perceived and actual value. Our customer’s customer perceived some value in the cards he had received, but little in the work that went into them. Even though he was unable to create the name and do the layout, he didn’t assign any value to those services. I’ll also guess that it took a little time on the part of the agency to get him to come to a decision.  He didn’t assign any value to that time, either.

Poor Richard has a lot of respect for the agency in question.  They are a good customer of AlphaGraphics and also friends of mine. They understand marketing and the current trends. They are practical folks. They know what works. I think they understand the budget constraints of small business.  And they are very creative, very patient, very kind people.  Their creativity, expertise and their patience all have value and they rightly charge for it. If I had to bet, it would be that their customer received much more in value than he actually paid for.

There is a move afoot to convince printers that we should become “marketing service providers.”  This sounds good at first, because content is moving online and the volume of print is dropping dramatically. That means that many of us are no longer making money. We need something to hang our hats and our hopes on. But we also need to define what the new phrase really means.

Poor Richard has written before on the difficulties of trying to integrate creative design into a production environment (see The Trouble With Printshop Design).  If being a marketing service provider means taking on customers like this one, printers will fail miserably and many will go ballistic in the process.  Most of us are production people at the core. We like machines, gadgets, and ways of getting things done.  The value we create now is mostly in tangible products. It is conceivable that we could get involved in handling customer data and doing the implementation of some aspects of a marketing program, but  printers in general are not good at conceptual work.  Most of us don’t like it and we don’t have time for it.

I empathize with the exasperation my customer expressed in the Twitter post cited above.  Most people don’t do well with ideas. Very few people think them through carefully before implementing them. Even fewer measure their effect after implementation, then correct and try again.  These are the things that a good creative agency does well, if their customers will let them. There is great value in this capability and it can be measured by the return that their clients reap as the result of a well conducted marketing campaign.

I guess it’s necessary to explain and re-explain the value proposal. Value is created when a vendor provides something for a customer that the customer cannot do or does not want to do himself (or cannot do correctly or efficiently by himself). The customer chooses to pay the provider for the value of the service or product. In this case, the customer got confused. He thought that he was buying a product (business cards) and didn’t assign a value to the conceptual and design work necessary to create them.

lemon-on-scaleIt’s not that the concept and the product aren’t related.  Concept and product aren’t apples and oranges.  I guess they’re oranges and lemons, but one has to precede the other.  My customer’s customer perceived his agency as a a project shop.  He thought he was buying the orange and assigned no value to the lemons that were a necessary part of the package.  Poor Richard is sure that my customer’s customer received good ideas and practical suggestions from the agency he chose. He suspects that much (if not all) of that proposal was ignored and that the agency ended up developing “stuff” rather than engineering a marketing campaign.  And the value the customer assigned to the “stuff” was not equal to the time and energy that was spent developing it.

I’m very sorry that my customer is exasperated. They don’t deserve to be. Poor Richard was a little exasperated, too. I quit cussing a few years ago, but I thought of Mrs. K.  As the gentleman left the shop, I pushed up my glasses with the back of my right hand and exclaimed “Well, doesn’t that just take the cake!”  Executing a brisk military turn, I marched off to the back of the shop. If there’d been a door to slam, I would have.


Neither Rain Nor Sleet, nor ?

May 3, 2009

A Summer Sale.

That’s what the subject line of the email stated.  I nearly clicked the junk button, but a quick glance at the sender held my attention.  DMMAdvisory.  Wait a minute, that’s the U.S. Post Office.  They don’t have summer sales . . . what’s up here?

mad-letterDMMAdvisory is the USPS email link to keep mailers informed about all sorts of goings on at the Postal Service.  The DMM is the domestic mail manual.  Actually, I think it’s the domestic mail manuals . . . there’s a bunch of them (if you’re curious, you can look at ’em here).  Usually, the DMMAdvisory is all about new rules that are going to be issued because they’ll make the USPS more efficient or rescinded because even though the USPS will be more efficient, everyone else will be less efficient.  The Advisories also talk a lot about Intelligent Barcodes, Move Updates, and services like PostalOne!, the online portal where mailers like AlphaGraphics are supposed to enter in all of their mailing data to make the USPS more efficient.  And we’ll be glad to do it, too . . . just as soon as the USPS figures out how to make the website work.

I’ve never seen a DMMAdvisory that talked about a summer sale. I got kind of excited about that, thinking maybe this was something we could use to promote mailing services. So I clicked on the link to find out about it. What I got was a 32 page .pdf document.  The USPS doesn’t advertise a sale, you understand, they file a Notice with the Postal Regulatory Commission. That kind of advertising wouldn’t get results for the rest of us, but apparently it works for the USPS.

Poor Richard, feeling brave, waded into the document. The first important fact I discovered is that Standard Mail is an important investment for American business and that it is incumbent upon the USPS to encourage American businesses to invest:

The current state of the economy has forced businesses, particularly Postal Service customers, to pull back on important investments necessary for ensuring their continued prosperity. The precipitous decline in the use of Standard Mail for marketing products and services is an illustrative example of the unwanted choices many postal customers have had to make because of the economy. The Postal Service believes it can, and should, find ways to help its customers increase their use of mail during these challenging economic times (pp. 1 -2).

On p. 3, Poor Richard discovers that the sale will run from July 1 to September 30.  A 30% discount for 3 months, that’s some sale! Oops, not so fast . . .here’s a catch on p.4:

The “Summer Sale” program will run from July 1, 2009, through September 30, 2009, and will provide a 30 percent rebate to eligible mailers on Standard Mail letters and flats volume above a mailer-specific threshold. The threshold is calculated by taking the percentage change between a mailer’s postal fiscal year-to-date (October 2008 through March 2009) volume and the volume mailed in the same period last year, and applying that percentage to the volume the mailer mailed between July 1, 2008,
and September 30, 2008.

So, the deal’s not so sweet.  The 30% discount only applies to the increase of mail volume in relation to the ratio of last year’s to this year’s mailings from October to March, factoring in of course the projected daily volume of pork belly contracts in the same period and the average shoe size of a U.S. mail carrier.

Reading on, Poor Richard discovers another hitch:

Qualifying mailers must be able to demonstrate volume of at least one million Standard Mail letters and flats, between October 1, 2007, and March 31, 2008, for one or more permit imprint advance deposit account(s), precanceled stamp permit(s), or postage meter permit(s).

This is looking less like a sale to Poor Richard. One million Standard Mail letters effectively rules out 100% of my customers. In fact, it probably rules out 99.9% of the mailers in South Georgia. And reading further:

Mail service providers (MSPs) are not eligible for the program.

It also rules out mail service providers, like AlphaGraphics; who if they might be large enough to aggregate and mail a million pieces of mail or so for their  customers and wanted to promote mailing services and pass along a little discount, would not be eligible to participate.

“Not a sale at all,” thinks Poor Richard.

The next couple of pages communicate the Postal Service’s intent to contact eligible mailers by letter and then direct them to a website to register to participate in the summer sale. The projected additional revenue for the USPS from the sale is between $38 and $95 million with costs at around $1 million to administer the Summer Sale.  A respectable projection of return, but qualified with this statement:

In particular, an overestimate of the additional volume generated by the incentive or an underestimate of the administrative effort required could unfavorably affect expected financial performance. (p.7)

Unexpected costs related to the malfunction of the response website are also presumably not included. The remaining 23 pages of the .pdf file encompass further justifications of the US Postal Service’s desire to try a “sale,” the regulatory provisions which allow them to do so, why the Postal Regulatory Commission should approve the request, and 17 pages of appendices that detail applicable postal rates, projections on pork belly contracts and historical data pertaining to the average shoe size of a US Postal Service Mail Carrier.

Poor Richard might humbly suggest that if Standard Mail is indeed in “precipitous decline” (and I have no doubt that it is), this proposal is unlikely to rectify the situation. I might also point out that a rate increase is scheduled for May 11 that will presumably do little to reverse the decline or encourage postal service customers to “invest in their continued prosperity” through a return to conventional mail.

Mail volume, like print volume, is decreasing; but there remains a need and demand for both services, at least in the near term. Mail has come under competitive pressure since the introduction of the telegraph, but in today’s communications environment, the pressures on both mail and print are extreme.  Barring a collapse of the Internet, mail and print volumes will continue to decrease. That said, there are still applications where printed mail is the best solution. Direct mail is demonstrably more effective with the 45 and over age group (dinosaurs like me, irrespective of Facebook enrollment). E-mail blasts will never have the impact of a well-written letter, especially if it is personalized.  Even “junk mail,” because it is tangible, has measurably justifiable place in some marketing campaigns.

Because the cost to disseminate printed mail is  higher than electronic communications, it is necessary to justify its value.  Specifically, this can be measured as ROI (return on investment) in any campaign.  It is also important to make it easier for customers to access and understand both printing and mailing. Poor Richard thinks that the US Postal Service is not succeeding in this area. Recent changes to the postal code (Move updates and the IM barcode) have been cumbersome to implement, difficult for mail service providers to understand, and completely inscrutable to our customers.  These changes have not really provoked anger among USPS customers, because they expect this kind of clumsiness, but the customers are very definitely not encouraged to increase their volume of mailing.

Perhaps the USPS should consider doing something proactive for their customers to encourage them to continue to consider mail as a viable means of communication.  Do you think a sale would work?


Let’s Talk

April 13, 2009

telephone

8:30 AM

“Need Pricing! Please Respond Quickly!” reads the subject line of the email.  Thinking that this might just be the order I’ve been waiting for all week, Poor Richard quickly opens the email in Thunderbird.

“My boss wants to do some postcards. How much will 1,000 be?”

“No clue,” responds Poor Richard’s brain as his eyes scan the rest of the post for more information, or at least a phone number to call.  Phone number found, fingers are dialing.

“Hi, you’ve reached the voicemail of (let’s call her Nancy Jean . . . don’t think I have any real customers called Nancy Jean) Nancy Jean, I’m not able to come to the phone right now, but if you’ll leave a message, I’ll get back with you just as quickly as possible.”

“Nancy Jean, it’s Richard at AlphaGraphics.  I received your inquiry by email.  I’ll be happy to get you some numbers on the postcards, but I’ll need some details.  Specifically, if you’ll let me know the size you’d like, whether they will be in color or black and white, coated or uncoated paper, who will be providing the art, and whether you’d like us to mail them.  Let me know and I’ll get back with you as quickly as possible.”

On to other things.

9:45 AM

“Need Pricing! Please Respond Quickly!”

“Haven’t I seen this before?” says Richard’s brain.

“Got your voicemail. Let’s do regular postcard size in color. Thanks, Nancy Jean.”

“Just quote something,” says Poor Richard’s brain, “maybe it’ll turn into an order. We need an order.”

The fingers follow instructions and produce an estimate for 1000 4.25 x 6 postcards on gloss cover. Still hoping beyond hope for something like a real job, the fingers include pricing for mail services. Because Poor Richard’s brain still has no clue about the design of the postcard, the fingers include the standard AlphaGraphics caveat:

Prices are for production only.  Additional charges will apply for layout, design, or file modifications required before printing.

“Nancy Jean,” says Poor Richard’s brain,” what that means is that I still don’t know what you want to do or what will be required to do it.”

It’s 10:00 am when Poor Richard clicks the send button.

12:15 pm – lunchtime. Check the email.

“RE: FWD: Need Pricing! Please Respond Quickly!”

“Richard, can you help with this?” writes Nancy Jean, responding to her boss’ terse notation:

“Nancy Jean, you’ve got to do better than this!”

Poor Richard’s fingers dial once again.

“Hi, you’ve reached the voicemail of  Nancy Jean, I’m not able to come to the phone right now, but if you’ll leave a message, I’ll get back with you just as quickly as possible.”

“Right,” thinks Poor Richard’s brain. “Nancy Jean, I’ll send you a couple of alternatives that can reduce the cost a little. If you’ll please call me to discuss, I’d really appreciate it.”

Poor Richard’s fingers add color one side and black ink two sides to the estimate and press the send button. It’s 12:30.

3:00 PM – done with bindery work downstairs. Let’s check the email.

“RE: FWD: RE: RE: FWD: Need Pricing! Please Respond Quickly!”

“Can we do something bigger?” writes Nancy Jean.

“Isn’t 4.25 x 6 a little small for a postcard?” writes her boss. “How much would a bigger card cost?”

“Bummer,” says Poor Richard’s brain, now beginning to realize that this is likely to turn into nothing.  Poor Richard’s fingers revise the entire estimate for 5.5 x 8.5 cards. The postage estimate is revised to reflect the cost of mailing a larger card.

“Nancy Jean,” types Poor Richard’s fingers, ” here are revised estimates for larger cards. If you could please call me to discuss, I’d really, really appreciate it. We’d certainly like to help with your project and if you could call to discuss the project, I’m sure that we can find a way to make this work for you.” The fingers click send.  It’s 3:15 PM.

5:30 – Poor Richard is thinking about going home. Last check of the email. Sure enough . . .

“RE: RE: RE: FWD: RE: RE: FWD: Need Pricing! Please Respond Quickly!”

“Richard, we really need to get these postcards in the mail. Can you call me in the morning?”

8:15 AM the next morning. Poor Richard’s fingers are dialing.

“Nancy Jean, may I help you?” comes through the receiver. Poor Richard’s brain becomes momentarily hopeful again.

“Hi, Nancy Jean, this is Richard at AlphaGraphics. I’m calling about the postcards we corresponded about yesterday.”

“Oh, Richard,” says Nancy Jean, “we really needed to get those postcards in the mail yesterday. When we couldn’t get all the information we needed, the boss decided not to send them. I’m sorry.”

“Thanks for thinking of us,” says Poor Richard’s mouth.  Poor Richard’s brain isn’t working at all. “Please let me know if you decide to try again. And if you’ll let me know the budget, we’ll try our best to find a solution that will work for you.”

“Richard, you know my boss doesn’t work like that,” replies Nancy Jean. “Hope you have a good day today!”

“Nuff said,” says Poor Richard’s brain.

“Bye,” says Poor Richard.

Poor Richard’s fingers hang up the phone. Time to check email.  Maybe there will be an order there . . . we could really use a good order.

It’d be a lot funnier if it wasn’t true.





Bailout, Please?

April 1, 2009

At first, I wasn’t even interested.  After all, bailout funds have something of a stigma about them, don’t they? What with AIG, the big car companies, and greedy bankers all clamoring for more, it’s just a little embarassing for a small businessperson to go out looking for the government dole. We’re supposed to be the proud and determined entrepreneurs that keep the country productive and innovative and 16 other patriotic sounding adjectives.

After 17 continuous months of recession, though,  things were getting kind of desperate.  Actually, Poor Richard didn’t realize that it had actually been 17 long months until he heard it on the radio.  They kept the first year a secret for a while, you know. Anyway, because the level of desperation is inversely proportional to the level of funds in the company bank account; when the desperation got high enough, I made the phone call.  After all, I rationalized,  if all this money they’re printing isn’t  going to be worth a plug nickel in the long run, shouldn’t AlphaGraphics get some to spend before everybody else figures it out?

So Poor Richard called Saxby Chambliss’ office in Macon and asked to speak with the Senator. A very nice young lady informed me that the Senator doesn’t really actually even ever stay here in Georgia, because it’s too far away from the center of things where all of the important stuff happens. She asked me why I was calling.

“I’m looking for some bailout money,” I responded, then decided to sweeten the pot. “Of course, I’ll be willing to sell up to 99% of the stock in my company, if that will help.”

“Oh, that would be most helpful!” she answered, “and exactly how many billions of dollars does your company need to stay afloat?”

Not wishing to be greedy, Poor Richard responded that a few million would actually do quite nicely. This didn’t sit well with the young lady in Senator Chambliss’ office, though.

“Only a few million?” came the huffy response, “I’m not sure that the treasury department is set up to administer bailouts in such small amounts. I’ll refer your inquiry to the Senator, but perhaps you should contact the Federal Department of Largesse and see if they have a block bailout program for smaller concerns like yours.”

She was kind enough to give me the toll free number for the Department of Largesse and then hung up the phone muttering something about the time wasted by common citizens who feel entitled to call Senators’ offices. Feeling bold, nonetheless, Poor Richard placed a call to the Department of Largesse and immediately became entangled in the voice mail system.

“To assure the highest levels of service, please state your name and input your 9 digit Federal Employer number,” droned a disembodied voice.

I complied.

“Your call may be monitored to assure high levels of service,” continued the voice, “and your phone may be tapped to assure that you are not speaking regularly with Osama bin Laden or other Al Qaeda operatives. If you wish to continue, please enter your SIC code and the amount of governmental largesse that you wish to request.”

Once again, I complied. Not wanting to be greedy, I punched in 7,500,000.  “This is really kind of easy,” I thought.

“Please be advised that if you are awarded funds by the Federal Department of Largesse, your salary and bonus package will be limited to a measly $500,000 annually.  In addition, you are warned not to openly redistribute government funds among executive employees in such a manner that the news media or the public might discover your abominably irresponsible and unpatriotic behavior. If you agree with these terms and conditions, please press “1” to continue.”

Having no difficulty with the conditions, Poor Richard pressed “1.”

A long pause ensued, followed by a click as my call was transferred. Poor Richard could hardly wait. “Now I’ll get to talk with one of the customer service reps and tell them where to mail my $7.5 million,” I thought.

The phone clicked once more and another computerized voice queried. “Our records indicate that the asset value of your business is less than $10 billion dollars. Is this correct? If ‘yes,’ please press ‘1’ now, otherwise hold for the next customer service representative.”

With all good intentions and still hoping for the best,  Poor Richard pressed “1.”

“We regret to inform you that your business has been deemed insignificant by the Federal Department of Largesse,” sounded yet another automated attendant. “The SIC code you entered indicates that your company is involved in the business of printing. Printing is not considered to be a relevant economic activity, nor is it eligible for funding under President Obama’s 21st Century Initiative for Green, Energy-Efficient, Barely Conceivable and Totally Impractical Projects.”

“Please press ‘1’ if you’d like to speak with a customer service representative,” the voice continued. “Our current hold time is estimated at 16 years, 3 months, 2 days, 5 hours, 16 minutes and 35 seconds. Calls will be served in the order that they are received. If you’d like to be considered for a consolation prize, please press ‘2’ now.”

Feeling despondent, Poor Richard pressed ‘2.’ “Please hold,” came the voice.

It took a minute before I realized that the background music playing while I waited was familiar. It was Ray Charles singing about Greenbacks . . . “just a little piece of paper, coated with chlorophyll.”  I confirmed my mailing address with the last automated attendant and was told to look for my consolation check in the mail. In closing,  Poor Richard received a firm promise that the Department of Governmental Largesse would always endeavor to reallocate the resources of this great nation from each according to their ability and to each according to their need.

$100 Bill

$100 Bill

I’m still waiting for the check. You know, Lincoln ain’t gonna get it, Jackson neither.  Maybe they’ll send a fresh, crisp $100 bill with Poor Richard on the front.


Buttering the Bread on Both Sides

February 22, 2009

It’s happened again . . . same story, but a little different this time. In July 2007, Adobe, with indeterminate brilliance, decided that it would be advantageous to link the print dialogue in Acrobat directly to FedEx/Kinko’s (see Poor Richard’s post On Which Side is the Bread Buttered?). The rest of the industry screamed and threatened and Adobe backed down.

This time around, the culprit is Hewlett Packard (HP), who on January 27 introduced a new web-to-print site called MarketSplash (see HP’s press release).  As a standalone site, MarketSplash really doesn’t represent much in the way of an additional threat to brick and mortar printers (like us), who are already under so much pressure that one more straw on the camel’s back will hardly matter. The site will go head-to-head with VistaPrint, the web-to-print leader and compete very well. In fact, with some creative marketing from HP, MarketSplash could blow VistaPrint out of the water.

Being of a curious nature, Poor Richard had to explore.  MarketSplash, like VistaPrint, is template driven. And, like many/most of the online printing sites, business cards are free.  So Poor Richard decided to order some. I found a template that I liked, featuring Albert Einstein; and created a business card for a new company I had conceived only 30 seconds before, the Incomprehensible Services Company.  Poor Richard, needing a title, is now the Chief Conspirator of Incomprehensible Services.

I was actually impressed by the design template.  The default font sizes were a little small, but the design tools offered enough for customization of a rudimentary layout. Joe Consumer will be able to operate this design tool without getting himself into too much trouble.  I was also generally impressed by the quality of the layouts that were featured. A proof is approved online. The free cards are all double sided, with an advertisement for MarketSplash on the back.  Here’s a screenshot of the proof page . . . I hope HP doesn’t mind.  (If you do, let me know and I’ll zap the image.)

Marketsplash Proof Page for Incomprehensible Services Company

Marketsplash Proof Page for Incomprehensible Services Company

The quality of design can be attributed to another HP acquisition, a company called LogoWorks. Purchased by HP in 2007, LogoWorks offers inexpensive design work online.  Like MarketSplash, LogoWorks targets small businesses who are looking for a low cost alternative to ad agencies and freelance designers. Custom design from LogoWorks is also included as an option on the MarketSplash site.

After reading this far, you may be asking, “So, where’s the problem?”

There are a couple:

  • First, even though HP is not the first to offer a web-to-print site with low prices, they are going into competition with part of their customer base. This is admittedly a weak argument because HP’s desktop color printers were among the first technological developments to erode a segment of conventional printers’ business. (Home offices and the smallest of businesses were the first to go to self-printed business cards and letterhead).
  • Like Adobe, HP picked the wrong partner. They have teamed with Staples Office Supply for overnight delivery of product. While the geographic distribution of Staples’ centers certainly makes sense, the assumption that they will have the capability of quickly producing and delivering a quality product is open to question. To HP’s credit, they are open to “co-branding and licensing of the MarketSplash platform” to other retailers.  Poor Richard has no clue what this actually means.

Conventional printers may re-evaluate our purchasing decisions, especially when it comes to high end digital presses. HP has been the market leader with their Indigo line.  The quality and capabilities of these machines are impressive and many printers the size of our AlphaGraphics (including us) had planned to migrate to this machine as leases for our existing digital equipment run out. HP also has a strong presence in the wide format arena. But HP does not have the market share in our industry that Adobe Systems has. Also, unlike Adobe’s software, there are good alternatives to the HP products. HP’s decision falls squarely into the category of “calculated risk,” and the potential return may well outweigh the consequences from agitating bothersome printers like us.

Can brick and mortar printshops compete? The answer unfortunately is “yes” and “no.” If it’s a question of price, the answer is a definite maybe.  We won’t be giving away business cards, and we’re really not interested in selling 100 of anything for $39.95, but by the time you add freight some of the other items are not so cheap. The online printers convey the impression of low price, though, and it is sheer folly to say that the web printers have not eroded the low end of the customer base.

Repeat letterhead and envelope orders from small companies were profitable “bread and butter” business when our AlphaGraphics started. That business has virtually disappeared as correspondence has gone online and as a result of the VistaPrint – type alternatives. Freelance designers also once represented a good base of business for postcards and flyers. They began funneling these products to gang run printers a few years ago, similarly attracted by cheap pricing (See Poor Richard’s post Caveat Emptor). It is not just a little ironic that LogoWorks and MarketSplash actually represent direct competition to the freelance market segment, though the freelancers themselves may not realize it.

Especially in this economy, conventional printing companies are competing for a larger share of a rapidly shrinking pie. Many of us will not survive. Most of us are hanging on by our teeth and clawing with our fingernails. For those of us who will fight through these rapidly changing times, it will mean finding new ways of doing business, new products and services, and working harder and more closely with the customers we have left.  Local companies have the advantage of proximity, of reacting quickly to customer needs, and the ability to provide expertise to those who still value it.  Poor Richard thinks (hopes) that the ability to survive and eventually succeed again will still be based on that value proposition.

It will be another 6 or 7 days before Poor Richard receives the cards for his imaginary venture. They’ll be shipped by an unnamed ground transportation company. The order represented a $13.95 value, charges graciously waived by MarketSplash, and my cards will be printed on a medium matte paper. I’m anxious to see what that is, too. Be assured that another post will follow!

Postscript

Got the cards about five business days later.  They came Express Mail (USPS). The printing quality was good, but not exceptional. Digital color on an 80# Matte cover, with an advertisement for MarketSplash on the reverse side. The freebies presume that more profitable orders for other items will follow from satisfied customers who have received their wonderful free business cards. I’m sure that that is a valid assumption, but I wonder where the breakeven number falls.

Even with streamlined ordering, there is a real cost to print, cut, package and ship the stupid things.  I’d figure between $10 and $15/set in a really efficient production operation.  If one in four customers actually order another item, that’s $40-$60 in additional sales required before a margin is achieved.  A low volume business model must turn high volumes to make a profit. This is  a combination traditionally not compatible to a specialized and detailed business like printing.

Poor Richard confesses that this may be the business model for the times we’re in.  It’s not a model that will be conducive to the kind of business that good local printers have traditionally done. I regret that and I think that one day the customer’s we’ve lost may regret it too.