All dressed up with no place to go?

It’s been a rare, snowy day here in Middle Georgia.  To be more precise, it’s been a rare, icy, slippery day here in Middle GA. Couldn’t get to the printshop this morning and received no disappointment whatsoever when I contacted the team and asked if they thought we should call off work for today.

“There’s a half inch sheet of ice out my front door.” reported designer Todd.

“I’m at my girlfriend’s house and we’ve already built a fire.” from RH man Brian.

“I was all dressed and ready to go at 6:00 am when you texted that you weren’t coming.” from the first lady of sales, Sharon.

That one held me up. It brought to mind the lyrics of one of my favorite British Invasion songs, “I ain’t got you:”

I got a Maserati G.T.
With snakeskin upholstery.
I got a charge account at Goldblatt’s,
But I ain’t got you.

I got a closet full of clothes,
But no matter where it goes,
It keeps a ring in the nose,
But I ain’t got you.

I got a tavern and a liquor store.
I play the numbers, yeah, four forty-four.
I got a mojo, yeah, don’t you know,
I’m all dressed up with no place to go.

I got women to the right of me.
I got women to the left of me.
I got women all around me,
But I ain’t got you.
No, I ain’t got you.

For those of you who might be somewhat beyond the age where familiarity with the British Invasion is a given, the Yardbirds were the Rolling Stones that didn’t stay around.  They had three great guitarists.  Jimmy Page went on to lead Led Zeppelin. Jeff Beck produced one of the most amazing jazz fusion guitar albums of the 1970s (Wired). And then there was Clapton, the guitarist of the aforementioned number. Poor Richard doesn’t ascribe to the 1960’s graffiti asserting that “Clapton is God,” but it’s fair to assume that you have heard of him.

Ain’t got you . . .  sounds really familiar. The printshop behind the red awnings on Poplar (name carefully concealed to protect the sensitive interests of the franchise) has spent a great deal of time and energy over the past couple of years adding the latest whizbang capabilities. We can help customers with email communications.  We can send postcards with PURLS. We can help with social networking and Google Adwords. We can even develop simple CMS sites for small businesses.  All of that along with wonderful capabilities in digital and conventional print and you’d think that we’d find an interested customer or two. But in reality, we’re kind of stuck . . . all dressed up with no place to go.

Poor Richard has batted about the “marketing services provider” concept for a couple of years. This theory maintains that in order to survive, printing companies must diversify into other realms of communication and become marketing consultants to their customers.  I’m all for the first part of the assertion.  Conventional print is certainly waning at the moment and merging conventional print capabilities with the low cost potential of the internet only makes sense.   Marketing strategy is something completely different, though, especially in the altered reality of the Great Decession.

If you had asked me just a couple of years ago, I would have said that marketing strategy was the exclusive purview of the experts.  In those days, marketing was at least partially predictable . . . traditional efforts (advertising, PR, etc.)would yield predictable results. Now I’d say it’s anyone’s guess. Proven tactics may fail totally and a low cost video on YouTube can go viral. It’s unpredictable, but there’s plenty of stuff to try.

Our Gralpharaphics shop has experienced good business relationships with a couple of excellent agencies, and in balance, these folks have done a very good job for their customers.  One of our key agency accounts closed last year after trying very hard to bring their customers in line with the new realities of marketing.  They experienced difficulties because the new realities are damnably hard to define and their customers still expected the predictability of the old paradigm.

So where does that leave us? We can implement some pretty cool stuff, if we can find the customers willing to take the risk.  These folks are pretty hard to find in icebound Middle Georgia, though, so Poor Richard is humming the old British Invasion song

Couldn’t find a good Yardbirds video, but the audio tells the story  . . .

Got to end on an optimistic note, though. Here’s Janis . . .

Treading Carefully

Poor Richard has  never strolled through a minefield, but he can imagine what it must be like.  It seems a good analogy for the experience of hanging on to a printing business these last 18 months. There have been days and weeks when explosions were occurring all around and it seemed the end was near. On other days, the sun was shining and everything appeared almost normal until the detonation 20 feet away and flying shrapnel brought reality into sharp focus. The last couple of weeks have been like that.

Macon, Georgia is no business Mecca. It is a sleepy southern town that has had better days and hopefully will have better days again. Macon has been a good place for a business like the printshop behind the red awnings on Poplar Street (name withheld to avoid the wrath of the franchise).  Over the last decade plus, we’ve enjoyed good customers, wonderful friends, and mostly amicable competition with the other printers in town.

For our company and for our competitors, business as usual ended abruptly in November of 2008. The stock market crashed, our customers contracted and folded, and sales plummeted.  Monthly newsletters went digital; nevermore to return. Businesses decided that they could do without printing. Our friendly bankers, once eager to finance new equipment purchases, now wouldn’t return phone calls. Yet we hung on and tried to do what we could, hoping and praying for better days.

An interview in the PrintCEO blog tells the sad story of the demise of Alonzo Printing, a midsized California operation that seemed to be doing everything right. The owner, Jim Duffy, describes the heady days of 2007 with new equipment investments, diversification into digital printing, and the difficulties of turning a marketing vision into reality.  Jim didn’t have to step on a mine.  His bank detonated it for him.

In our sleepy southern town, we were all holding on until just a couple of weeks ago. Sure, a couple of small printers have closed, but they were operating with 30 year old systems.  Two weeks ago, one of our better competitors announced that they were suspending their production operations and would continue as a print broker. Last week, a promising short run book printer literally disappear overnight.  The mines are exploding all around us.

Our little company is treading very carefully. Like Alonzo printing, we made new equipment purchases when times were better. Some of these have not played out well. Equipment vendors, banks and even the franchise, once seen as allies, now look more like the enemy. The path through the minefield is complicated and dangerous and there is no lack of diversions that could cause a misstep.

Poor Richard is convinced that one of these is the whole “marketing services” concept. In the PrintCEO interview, Jim Duffy makes the following comment:

We marketed Alonzo, and from a pure marketing perspective, it was just a dream. And yet, it was another issue of not having the right people to make it really come to life. Then we reached the point where we couldn’t hire the right people. That’s how you get caught in the spiral.

You do need to market yourself; you need to do it in a way that’s going to be meaningful for your clients.

The last sentence is telling. Printers are not viewed by our customers as “marketers.” That is the realm of advertising agencies. With due respect and apologies to our agency customers, printers are not “pie in the sky” folks. We don’t do well with concept. Coming up with concepts that work requires a lot of time and creativity that a short-staffed printing company doesn’t have.

Printing companies do a very good job with details, with implementation.  If “marketing service provider” means that we have to dream up the marketing concepts for our customers, we’re in trouble. If it means that we implement and measure marketing “campaigns” using the new tools that are available to us, then perhaps we can provide our customers with something that is of value, that is meaningful.

Poor Richard is not certain what it will take for some of us to make it out of the minefield, nor is he certain that the printshop on Poplar Street won’t be blown to smithereens during the debacle. I hold to the hope that there will be a need for companies like mine that “do stuff,” that are competent at producing and implementing.

There is a certain sense of desperation that naturally occurs when one strolls the path through a minefield. Traveling the path requires care, tenacity, and not a small bit of prayer. There is also the possibility that the trail will eventually lead to un-mined pastures that allow more flexibility to move around and maybe some better possibilities for small businesses like mine. Poor Richard is really looking forward to the other side of the minefield.

QR . . . U Ready?

Despite pronounced Luddite tendencies, Poor Richard is intrigued with this bit of innovation. The bit of abstract squiqqle at the left is a QR Code.  QR stands for Quick Response.  Originally used in Japan for parts tracking in automotive manufacturing, the QR code has gone viral there and may be the next “killer app” for your iPhone or Blackberry.

Poor Richard’s Luddite alter-ego questions of what possible use could this oogly scrambled mess be.  Like the British handloom operators of the early 1800s, my first tendency is to trash any new technology that potentially threatens my established and well-ordered universe.  On second thought, though, trashing the power looms in Great Britain earned many of the Luddites  new careers as shepherds down under in Australia, and Poor Richard is not fond of sheep.

The long answer to the question is that the QR can contain text (lots of it) and URLs, which is pretty cool.  Even cooler, the telephonic gadget you carry in your pocket can read the QR code and (if you’re wirelessly attached to the internet) it can connect you directly with the website referenced in the code. It can also be used send SMS messages, geographic locations, and transfer contact info into a database.  All that from a box that looks like a Photoshop aberration . . .

Best yet, this innovation has the potential to actually enhance the value of print (as opposed to replacing it). Think about it . . . how about a poster that automatically directs the reader to the ticket office through their cell phone?  Coupons could carry QR codes to be read at the retail counter for special incentives or a chance to win 10 bazillion dollars.  Personalized URLs could be transformed into personalized QRs, directing a customer to a website with specific information tailored to meet their interests. There are some real possibilities here . . .

You can have fun playing with this one. Poor Richard has found a free app called Quickmark that reads QR codes on the iPhone and will actually let you create codes on the fly to transfer data. There are several websites that will let you create codes one at a time (try the Xzing Project QR Generator).  I’ve also found some software that will allow QR codes to be merged with a database. You can even order a t-shirt with your own personalized QR code message printed on the front.  Poor Richard didn’t spring for one; but if he had, here’s what his t-shirt would have looked like:

Luddites of the world, unite!

Thanks to Andy Selcho of Salt Lake City, UT Gralpharaphics (name altered to protect the delicate sensitivity of the franchise), who introduced Poor Richard and bunch of other folks to QR codes.  Andy has put together a good YouTube video about QR codes . . . Here ’tis:

Re-inventeration

Square-wheeled trike. Thanks to Jeff Atwood at http://www.codinghorror.com.

If one happens to be a small business owner, especially if one happens to be the owner of a local printing company, the idea of re-inventing one’s business is probably pretty far up on the agenda these days. This is primarily because much of the business we all once enjoyed has suddenly just disappeared, as if by magic; or possibly due to the re-inventing of a much less cooperative economy.

Re-inventeration, a new word which Poor Richard thinks he has just coined, is the process of re-inventing something.  Of course, the whole concept is preposterous.  If something is invented the first time, does it really make any sense to try to re-invent it?

And it’s complicated. Re-inventeration is frought with Catch-22 scenarios. For those who have not read Joseph Heller’s famous book, the Catch-22 was the ultimate bureaucratic boondoggle.  Catch-22 (the book) told the story of Yossarian, a WWII B-25 bombardier and his squadron, as they were forced to fly increasing numbers of bombing runs over Italy.  The squadron commander, Major Major, literally embodied the concept of Catch-22. It was possible to schedule an appointment with Major Major at any time; however, one could only actually see Major Major if he was not in.

Similarly, if one was deemed insane, it was possible to get discharged from the Air Corps. Because Yossarian’s desire for discharge was deemed very sane, his insane behavior was considered by his superiors as a natural expression of his  true sanity. Catch 22.

Not unlike Yossarian, Poor Richard is struggling with the Catch-22s of the re-inventeration process at his downtown Macon Gralpharaphics shop (name carefully disguised to protect the sensibilities of the franchise). The first Catch-22 is simply time.  Business is down, we’ve cut back on staff, and more time is spent working in the business than on the business.  Without more time to work on the business, we’ll never be able to grow the business back to a point where more folks can be hired to work in the business; relieving the requirement for the owner to fold brochures until 2 am and allowing him to use his brain once again.

The next and more worrisome set of  Catch(es)-22 have to do with scope, the literal definition of the business. Behind the red awnings on Poplar Street, we’re taking jobs that we probably wouldn’t have looked at a couple of years ago.  A lot of these are small and risky.  The risk is that the expense in time and effort to produce the small jobs will exceed the revenue that results. Catch 22. The potential benefit is a new customer who might actually bring us a profitable job one day. Poor Richard is not sure how this one is playing out.

The low hanging fruit has been picked. We’ve responded to economic pressure on mainstay product lines by adding more products. In our case, we’ve added wide format printing and reprographics to subsidize some of the losses in conventional offset printing.   These were natural additions – similar products and services to what we were already doing. They didn’t disrupt the production process much and they added little in the way of expense. Unfortunately, they did not add enough revenue to compensate for the decline in conventional printing; and these product lines are also facing economic and competitive pressures. Catch 22.

So what’s the next step? Poor Richard has written before (with misgivings) about the current buzz-phrase in the printing industry. The latest rage is for printing companies to become marketing service providers. (See Poor Richard’s post Measuring Value). Our little company  is moving in this direction slowly but steadily, unsure of all of the implications, but with a sense that it is inevitable – there just aren’t many other areas of opportunity left.

Becoming a marketing service provider is full of Catch(es)-22. First, the whole notion takes us out of the realm of producing tangible products and into the area of shaping content. We’re no longer working with machinery that prints, cuts or folds stuff; but rather with electronic means of communication and the disciplines that go along with them – CSS, XHTML, Purls and a bunch of other acronyms. The competitive cost of entry into this business is low relative to the cost of a new printing press, which means that the pressure to keep ahead of the technology curve will be steep. Worse, the marketing service provider notion requires a new skill set that takes time to learn.  In our case, that’s the owner’s time that is in very short supply. Catch 22.

Second, the whole idea of shaping content laps over into creating content.  Printing companies are pretty good at shaping. We do layout work, color correct photos, even occasionally light editing for our customers. This is different from creating the content, an area we have generally avoided because of time limitations and a focus on keeping the machines running.

It’s just a little too hopeful to think that we might make money only by implementing marketing services — integrated direct mail and e-mail campaigns, for example. Most of our customers simply lack the time and resources to develop the content for this kind of effort, so it appears inevitable that we will be required to do some development work for them if we want to sell the services.

Hopefully we can do this without stepping on the toes of our agency customers and triggering yet another Catch 22. Ideally, the agencies might find it helpful to use our shop to implement integrated direct mail and internet campaigns for their larger customers. Our challenge will be keeping the focus on implementation (and measurement) of specific marketing services without getting customers confused about what we can do (and want to do).

Creating content, even on a limited basis, is a big step for a small printing company; but it is still a lot different from the conceptual work that our agency customers do. We can make that statement, but will our customers understand it?  Another Catch-22.

Poor Richard supposes that re-inventeration, like change, is necessary and unavoidable; but he hopes he’s not re-inventing a square-wheeled tricycle.

Death of the Salesman?

These days, Poor Richard is getting older faster. I was young until I was 40, zoomed through middle age in a short 10 years and will be 50 this year. It’s tempting to say that 50 sure seems old to my 30 year old mind, but I’m afraid that the brain is aging, too.  Fer’ instance, there was a time when I could keep up with everything going on in the digital world . . . the latest microprocessors, the emergence of the internet, graphic and web design software and tools and all of the cool “killer apps.” That’s all left me in the dust. (Now I have to call my friend Mark Strozier at  The Brainstorm Lab, who has given up sleeping, but still knows everything).

But that’s not what this post is all about. I’ve written before about the massive changes that this recession is producing in the printing industry (see Poor Richard’s post Obsolete). Budgetary pressures have accelerated the transition of the publication of content from paper to the internet, and the rapid change is difficult for printers to cope with. Yesterday, I came across a discussion on Linked In that presents another dimension both to the difficulties that printers are facing and to the age and perspective gap that is becoming increasingly obvious to Poor Richard.

The discussion was posted by Jim Gross, who is an Account Executive Consultant at Image Printing Solutions in LA.  I’ll quote the post verbatim, since I’m not sure that a link will work:

Death of the Salesman – The Internet versus the human element.

The play “Death of a Salesman” tells of the tragic downfall of Will Loman. Loman’s flaw comes down to a lack of self-knowledge and obsession of greatness without adapting to change.

Today, the salesman’s world is rapidly changing to internet services so your clients can search for best prices or gather information for purchasing decisions. One main reason is avoiding the interaction with the dreaded salesman. Are you and your industry next? When is the last time you used a travel agent?

It has become an acceptable practice to purchase vacations, computers, cars, clothing, insurance, mortgages and other services daily with our computers.

The printing world is continually moving toward this trend with end-users reaping the benefits of faster service and lower prices. Manufactures, distributors and brokers are fighting to keep business at a profitable margin. The internet is making our industry into a commodity and the expertise of the salesman has been reduced to, “what is your best price”.

23 years ago a sales trainer at Uarco named Larry Dilly said there are only 3 things you need to know about the printing industry, “BETTER, CHEAPER, FASTER”. These words hold true today.

What is next for the print salesman? Promoting clients to go to your website for pricing and uploading artwork? If yes, then you will be the next Willy Loman.

The salesman of the future must be able to sell programs to companies and be viewed as a consultant with value while embracing the better, cheaper, faster of internet capabilities.

We are in an industry where both right and left brains must function equally. For printing is where conceptual ideas are turned over to mechanical engineering that produce works of art.

Poor Richard finds Jim’s message disturbing, a little confusing, and definitely thought provoking. A few observations:

• In a pure commodity market, “better, cheaper, faster” trumps everything else. My experience is that very few products are purely commodities, regardless of the desire of some of those who purchase to make them so. Even lumber, which is defined as a commodity, has product attributes that are deemed better or worse by the buyer and other transactional attributes (delivery, for instance) which vary seller by seller.  With printing, each product is different. And even if the process of producing a piece may be similar from one provider to the next, quality and service aspects may vary widely. The low cost producer may not be able to produce “better” or “faster.”
• Selling printing, at least for small and medium printers, has always required a consultative approach. Even in the days when it was given that all companies used printing, buyers varied in their knowledge of and comfort with the process. Today, it is rare that we deal with a professional “print buyer.” Most of our customers have to deal with printing only once or twice a year. They need all kinds of help to get their projects done. This is an opportunity for a proactive and creative salesperson.
• Poor Richard could maintain that printing was not conducive to sale from Internet providers and that the implied comparison of our industry with the travel industry  is invalid, but this would only be a denial of reality. Just as Orbitz and Travelocity have taken a large bite from the business once held by local travel agents, so the gang run printers and VistaPrints of the web have appropriated business that once was the domain of the local printer.  Just as travel agencies have specialized in services and capabilities that are not easily replicated by the internet travel sites, so must printers do the same.

Defining and explaining the value that his company provides is and always has been the mission of a good salesman. Nonetheless, the comparison to Willy Loman is troubling. Poor Richard has read and seen Arthur Miller’s drama. While Loman was essentially overcome by his own ego and delusions of grandeur, at the core he thought he was right. The inability to recognize reality was at the root of his problems. His refusal to act on the basis of reality ultimately did him in.

It’s scary to think about Willy Loman when you’re approaching 50, especially when the world is changing so rapidly. I am hanging on to the hope that there is value to the human element and to the aspects of my business which can’t be commoditized. At the same time, it is folly not to look for opportunities amidst the change; essentially new ways to provide products and service that will be assigned a value by our customers.

Willy Loman?  Naaah . . . Mark, can I borrow your energy pills?

Relationships

The 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.

Measuring Value

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.

It’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 ?

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?

DMMAdvisory 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?

Buttering the Bread on Both Sides

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

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.

The Smell of Trouble

It must have been payback for all of my ranting about the end of elegant design (see the last post If Counterfeiters are dinosaurs . . .). I had received a call from a perfectly normal sounding professional type person a couple of days before. He was starting a new operation in Macon and needed “the package” – letterhead, envelopes, business cards, etc. These kinds of calls are usually good news for a printer. If you get the first batch of business, you usually get the reorders and maybe a brochure and some other stuff. All of the layouts were done, he’d have his designer get in touch with the specs.

Shortly thereafter, the specifications appeared by email, including all of the usual stuff with a request for estimates on 2 color and 3 color versions of everything. It could have been the request for 3 color envelopes that caused my printer’s antennae to elevate or maybe it was something in the look or the language of the request. I don’t know, but I put the request down with the intent of calling the designer to get a look at the art before I put together numbers.

Designer is a very broad and general descriptive term, you must understand. It’s definition can encompass the entire scope between Joe and his color crayons and Andy Warhol. Anyone can call themselves a graphic designer, but few earn the title; and even fewer really understand the technical aspects of design. And despite the assertions (and tuitions) of the best art institutes, Poor Richard asserts that great designers are not really trained. They’re born with it. The best ones have an innate sense of artistic balance and color and they soak up the technical stuff like a sponge.

I received the art with a request for samples of work that we had done. The antennae went up a little further. When I opened the .pdf file, the yellow warning lights at the end of the antennae began to flash. It’s not that the art wasn’t good . . . actually the design was elegant and clean. But the color combination was two grays and a red. This was a designer who was busily spending his clients’ money, because he could get away with it.

Offset printing of three spot colors is really one of the least efficient things that occurs in a printshop. The printer has a couple of options. If the registration between the colors is not tight, the printer may choose to run two passes on a 2 color press. The colors that register will run on the first pass, followed by the single color that does not. Alternately, the printer may choose to load up mixed ink on a 4 color press. Digital printing is not an option for letterhead, which is likely to be run again through a laser printer or a toner device. Reheating the toner on the letterhead can make a terrific mess. And envelopes are another problem. Most small presses will run envelopes and register 2 colors. If all three colors register, either the envelopes must be printed on a special press or the sheets are printed before the envelope is manufactured (or “converted” in printereze).

Take as an example, this less than skillfully conceived logo for Impending Disaster Design Group:

If three colors are needed, this is the economical way to do it. This logo will require two passes through a press, but only the light blue and the teal register. The gold can be added in in a second pass. Most printers will even be able to print an envelope with this logo. The lightning bolt is likely to misregister just a little bit, but it won’t be noticeable to the mail recipient, who, after all is only seeing one envelope at a time.

This version of the logo is a little more problematic. Because the light blue, the teal, and the gold all register (touch), it’s going to be nearly impossible to run this logo on a small 2 color press. The best option for this version is to run it on a 4 color press, but that means incurring more expense in setup and cleanup before and after the job. Most printers are reluctant to run 500 sheets of letterhead on a larger press, so the price for small quantities is going to be a little steep.

Another option is to convert the logo to process color. Even though process color adds an ink, this may be a more economical option. The printer is probably running process inks on his larger press (or on a DI press), so special setup and washup may be unnecessary. There is a but here, though. Converting the colors from spot to CMYK means a loss of color integrity. Because process color combines screens from 4 inks to give the impression of color (see Color Separation . . . Whadd’ya Mean?), it will differ from mixed (i.e. spot) inks where the color comes from the ink pigments themselves.

The art I received from the elegant designer was more like this. The logo was admittedly a lot less garish, and actually only 2 colors registered, but the net effect was the same. The designer used two grays – one “warm” and one “cool.” The grays are actually mixed inks, with formulas in every printer’s Pantone book. Without exception, press operators hate these colors. The gray is achieved by mixing several inks (usually a heavy load of white ink with dabs of black and either a red or blue). The measurements must be very exact to achieve the correct color. It’s not easy to mix the colors correctly the first time and if you miss the first time, it’s almost impossible to get them to match when it’s time to run the project again. Succinctly put, the PITA factor for this job is high, and the customer will pay extra for it.

Now, it is not often that Poor Richard is encouraged by his customers to charge more for a job that can be done a better way. The same logo could be produced in 2 colors (gold and black or gold and a mixed gray), using different screens of the black or gray to produce nearly the same effect. True, it would be more difficult to differentiate between the “cool” gray and the “warm” gray, but the cost would be much less and the job more easy to replicate when the reprint comes around.

Admittedly, printers tend to be of a practical bent. Poor Richard is totally unqualified to weigh the aesthetic value of a logo that uses two gray inks against one with only one gray ink.  I can see it very clearly in economic terms, though, and say without reservation that approximately exactly 97.644 percent of the recipients of the letterhead and envelopes will never notice a difference.  In other words, there is no “bang for the buck.”

I’m playing along for now.  We’ve done some pretty elegant printing over the years for some very fine designers. I’ve even sent a few samples by mail. Somehow, though, I’m just not sure that I want to pass muster.  Some jobs just have the smell of trouble, and this one is a little fragrant.