Dogs and a kinder, gentler (and smarter) USPS

photo courtesy ABC News

In their relationships with the United States Postal Service, dogs generally have the upper hand . . . er, paw.  Beyond the fact that postal employees frequently provide a tasty midday snack for their customers’ canines (see photo above), the USPS’s attitude toward four-legged fuzzballs has been surprisingly favorable.  Dogs have been featured frequently on stamps, some postal employees actually own and love dogs, and recently a new USPS program has helped to locate a lost Labrador in Stillwater, NY.

Here’s the story:

When Randi Slocum’s dog Kaylee ran away from her Stillwater, NY, home, Slocum and her friends did what any group of concerned pet owners would do — they formed a search party and knocked on neighbors’ doors looking for the chocolate Labrador mix.

But Randi’s mother, Carolyn, had a better idea — use Every Door Direct Mail (EDDM) to notify residents in Stillwater and nearby Schuylerville, NY, of the dog’s disappearance.

Carolyn Slocum, a board member of the local Postal Customer Council, had just attended an EDDM seminar given by Albany District Grow Your Business Coordinator Natalie Dolan. “I knew that the best way to reach every household was through the new EDDM program,” said Slocum. “Since many people work all day, this would be the most likely way to reach them.”

By the next morning, Carolyn had the mailings prepared to EDDM standards and dropped them off at the Stillwater and Schuylerville Post Offices. The flyer helped unleash a series of phone calls, and that helped lead to Kaylee’s safe return.

Source: Postal Reporter News Blog

Long the poster child for government (or quasi-government) inefficiency, the USPS has in recent months introduced a couple of programs that are surprisingly sharp.  Every Door Direct Mail (EDDM) is simply not what you would expect from an agency know for volumes of arcane rules.  The postal service calls it a simplified mailing process, and it really is. Basically, EDDM makes it easy to send saturation mailings to reasonably small geographic areas without the need to purchase address lists. EDDM comes in two flavors – regular, for mailing service providers like Gralpharaphics Macon (name disguised to protect the delicate sensibilities of the franchise) and retail, for the DIYer.  The website (https://smp.usps.gov/) is functional and includes a cool mapping feature to allow the user to select by postal carrier route.

Source: USPS

It is important to note that EDDM is the direct opposite of the targeted mailings that Poor Richard’s printshop has been promoting for some time.  EDDM is, in essence, a saturation mailing. No demographics selections are available and because the addressing is generic, it’s not possible to personalize the mailing or direct the recipient to a personalized URL (PURL).  The only select feature allows the sender to de-select business addresses and/or P.O. boxes.

Even with those limitations, EDDM will be great for service businesses and other small businesses that sell to a broad customer base and want to target specific neighborhoods to generate new business.   We are currently working on a saturation mailing in three neighborhoods for a startup lawn service business.  He’s chosen carrier routes where there are few apartment complexes and has eliminated business addresses.  The mailing will be around 1700 pieces, postage will be around $.15 each,  and most of the mailpieces will land at addresses that could conceivably benefit from his services.
On the other side of the mailing spectrum, the USPS has introduced a special discount to run in July and August 2011 to help promote “web-enabled” mailings.  This is another smart move that recognizes the value of cross-channel marketing and the integration of direct mail and internet.  First Class and Standard Mail letters that incorporate a QR or other mobile barcode will receive an additional 3% discount during July and August.  Details can be found on the  USPS website.

Both the US Postal Service and the printing industry as a whole have suffered greatly during the past almost 4 years of decession as cost cutting, business closures, and an accelerated shift to online communication have reduced volumes.  Poor Richard is hoping that the tide may turn again as marketers recognize the value of tangible print messages, especially in combination with impressions from other channels.  It is refreshing to see the USPS taking some intelligent direct action to encourage the use of both direct mail and cross channel efforts.  Want to try any of this out?  Call me or stop by the printshop behind the red awnings on Poplar Street. Bring your dog.

So what works?

There's nothing like simplicity

You’ve just got to love Rube Goldberg.  In the cartoon above, the object is to sharpen a pencil.  This is accomplished by flying a kite. The kite string is attached to a birdcage. As the kite ascends, the birdcage door is opened, releasing the birds who fly into a jacket, lowering a boot by means of a fulcrum that then activates a switch providing electricity to an iron.  I assume that the iron produces steam, which scares the squirrel through the bottom hole in the hollow tree.  When he reaches the top hole, he launches an acorn into a basket, thus activating another fulcrum that raises the cage above a large bird, enabling it to eat from a feeder intricately connected to a sharp knife.  The motion of the bird at the feeder causes the knife to whittle a sharp point on the pencil.  Clever, huh?

This morning, I was asked by one of our folks to explain how this whole “marketing services provider” thing works.  More specifically, I was asked how we were going to sell it.  It struck me that before we go about selling a set of services, it would probably be useful to define them. So I began thinking about what we can do for a customer who wants to sell more ummh . . . pencil sharpeners.  First, we could set up a WordPress CMS site for a small business and incorporate a blog,  an online storefront, and an event calendar. We could print and mail personalized postcards with PURLs for them advertising the storefront and providing an incentive to subscribe to their E-newsletter, which would be set up using a totally ‘nother service.  Then we could help them develop and manage a  database of potential customers who might shop at their online storefront or even conceivably show up at their place of business. As the database increases in size, we could actually take a survey to find out what all of the customers and potential customers think about the website, the storefront, the blog, the e-newsletter and the PURLs. AND we could set up social networking on Facebook, Twitter, and LinkedIn to further enhance the breadth and impact of their communications efforts.  PLUS we’ll put QR codes on everything . . . just because we can.

Sounds kind of like a Rube Goldberg device, doesn’t it?  What we all innately know is that some things work and some things don’t.  What we all don’t innately know is when some things will work and how they will work and how long they will keep working.  This is the truth, no matter what Seth Godin or the latest marketing guru may say.  Marketing, especially for small businesses, is not exactly trial and error, but it really is at best an intelligent guess.  Poor Richard knows this from his experience as a small businessman and a marketer.  (Fer’ instance, a year and a half ago Facebook ads worked pretty dang well for the printshop behind the red awnings on Poplar Street (name assiduously camoflaged from the franchise, who is totally embarrassed by Poor Richard’s blog).  A Facebook ad could generate a phone call or two or three pretty quickly . . . and yes, it generated “friends” and likes on our Facebook Page.  (Poor Richard maintains that friends, likes, and clicks don’t count for much if they don’t sell anything.)  Don’t know what happened, but Facebook changed  around June last year . . . since then zilch.)

Note: Please pardon me for the encapsulated parenthetical phrases. Poor Richard’s sixth grade English teacher, Miss Birch, is rolling in her grave.

But that’s really the crux of it, isn’t it? All of this messing around with technology doesn’t really mean much if it doesn’t sell anything.  My next door neighbor applied a torque wrench to my level of frustration yesterday with a story about “saving money with technology.”  They are planning for a trade show and had considered revising and reprinting their catalog.  This is a major project for the company and not one that Poor Richard’s Printshop would take on, but the story irritated me just the same.  Someone discovered that information could be conveyed on an iPad; so rather than produce a tangible printed product that could be given to prospective customers, they decided they’d just show ’em stuff on the iPad.  They spent $1,000 on gadgets, rather than $10,000 on print.

Got to dig into this a little bit to make sense of it:

1. Was the decision not to spend $10,000 on a big catalog wrong? Maybe not . . . it’s a lot of money and plenty of those catalogs would get tossed.
2. Do the iPads really replace the catalogs?  Absolutely not . . . whizbang toy that no one would remember unless you gave them one (and then you’re spending way more than $10,000 at the tradeshow).
3. Was there an opportunity lost?  To quote the megolamaniacal ex-governor of Alaska, “you betcha.”  A printed piece goes into the sack and at the very least provides a reminder when the potiential customer gets home.  The sack stuffer doesn’t have to be a full blown catalog.  A one page flyer might do perfectly well.
4. What else? The real opportunity for the iPad is collection of data.  While my neighbors are showing  stuff on the cool, new gadget; they could also get names addresses and particular needs that let them get back in touch with the prospect later on.

Will it work?  Poor Richard doesn’t think so.

Trying to help our customers with “marketing services” or “marketing campaigns” really comes down to what works.  There’s no way that we’re going to bat 1,000.  Flying a kite is probably not the best way to start the process of sharpening a pencil and throwing the whole arsenal of acronyms at a customer who just wants to sell something is equally ridiculous.  So what’s the answer? Selling “marketing services” and implementing “marketing campaigns” really has more to do with knowing what to try than anything else.  What is the goal? What is the budget? What makes sense to try? How do we measure it? What do we do next? These are the questions that really mean something and the substance of the conversations we should have with our customers.

So what does work? We don’t have to build a Rube Goldberg pencil sharpener just because we’ve got a bunch of birdcages and a roll of kite string.  It might be better just to whittle the end of the pencil with a pocketknife. Let’s try it.

The Capital Trap

(or why my printshop isn’t like a transformer)

It’s been a while, gentle readers, and I’m sure that many of you have given me up for dead. Well, to paraphrase Monty Python, we’re not quite dead yet. Nonetheless, the images of loading bodies onto the two-wheeled cart are ummmh . . . ominously relevant.

It’s been a very rough two years, and I’m still looking for the corner to turn.  This may be a recession in the rest of the U.S., but in our small market, it feels a lot like a depression. We are struggling with a bad combination of circumstances. We have fewer customers with less money and greater reluctance to spend it. This is coupled with a sea change in the way we communicate that has not at all favored our core business: print. And to state that our resources are limited would be a wild exaggeration. They are simply nonexistent.

I’ve read about the capital trap. Usually it refers to banks and the total contradiction of government demands to both lend more and raise capital reserves. This is prima facie lunacy. How can you do both? Like most small businesses, the printshop behind the red awnings has been slighted when it comes to government largesse; and the banks quit lending to us before the balance sheet deteriorated to the point that Poor Richard could actually understand the bankers’ reluctance.

Poor Richard would like his business to become a Transformer. I’ve always been a little intrigued by these gadgets. The Transformers came along in my college days . . . I remember a slightly older friend’s 5 year old showing me the first one. “Now it’s a car, now it’s a monster machine!” he said as he pressed the button that released the monster.

“Now it’s a printshop, now it’s a monster communications machine!” Alas, were it only so.

The new “marketing services” that we’re all supposed to be so excited about providing did not gain traction in our little town. We’ve done a little, but the time requirements have been high and the return low. There are some product opportunities, but at this point we lack the capital resources to pursue them.

Our little shop is caught in it’s own version of a “capital trap.” When things were good, we invested in what we thought would be the capital equipment that would keep us growing in years to come.  Justification of the equipment was based on the ill-conceived (in hindsight)  notion that business would grow a little, or at least remain stable at mid-2000s levels. In our case, we still have the equipment, but the demand for the production has faded. We’re paying for the equipment, but it isn’t paying for itself.

In a different time, we would just sell the machinery, stomach a little loss and move on. Now, the only market for the machines we have purchased is overseas and the selling prices really don’t even justify the trouble required to move the equipment.  Unfortunately,  the notes on the machinery are not based upon present valuations, but upon the value of the machines before we warped into a parallel universe where printing equipment is worth little more than scrap metal. Naturally, the banks and leasing companies are reluctant to simply concede the devaluation of the machinery or the obligation. It’s kindof like real estate . . .

There is very little solace in the knowledge that we’re not alone in this predicament. Poor Richard has a friend, customer, and fellow small business owner in a completely different line of work that can describe the same scenario; and I suspect that every small business owner can tell some version of this or a similar tale.  Here’s the point:  we won’t be able to grow ourselves out of this depression until we can pay off some of the debt burden that we’re saddled with.

Somehow, the politicians (and the media) have the strange idea that small businesses are “reluctant” to invest and to hire new people. They think that all we need is the right “stimulus.” The latest platitudes and lip service from the pandering politicians of the Potomac comes in the form of a $30 billion fund to encourage regional banks to lend to creditworthy small businesses (see the Business Week article). Poor Richard wonders just who that would be. Wake up! It’s not reluctance that is the problem, it’s resources. I am very skeptical that the small business economy can be “transformed” by simply flipping a magical economic switch and not the least bit convinced that there is yet any understanding of the importance of the small business segment of the economy among those who ostensibly govern our nation.

Reluctance does come into play when it comes to taking on more debt, though. Most of us will never be as comfortable with debt as we may have been before the economic debacle. The good news is that the debt we currently have will one day be retired. The payments do eventually come to an end.  Somehow, some of us will manage to work ourselves out of this predicament; probably despite the feeble efforts of the politicians.  We’ll hold on  until we can find a little money to try the next best thing. And maybe that next best thing will work and we can make some money and then invest in new equipment and hire new employees.

Maybe we’ll even invest in new businesses . . . wonder how medical marijuana would grow in the basement of the old building on Poplar Street?

Life is still grand!

So Much for Whiz Bang

It’s funny and a little strange how bits of information collide to make us believe that we really can draw a conclusion about this, that or the other. Life these days is a bit like zooming around in the supercolliding superconductor gadget that the Swiss built. We’re moving at speeds approaching the velocity of light and God only knows what will happen if we run into a wayward quark or hadron or something like that. If we’re not really careful about the whole thing, we could blow up the whole dang universe (for real, check this out).

Poor Richard paid a visit to some of his favorite folks in the advertising world the other day. Perhaps that’s a bit broad. Like the printshop behind the red awnings on Poplar Street, my good agency customers exist and attempt to survive in the rarified atmosphere that is Macon, GA (100% humidity all the time). So, in actuality, they are only a part of the advertising “world” in the same sense that Poor Richard’s Printshop is a part of the printing “world.”  Despite our attempts to become a part of the web-connected supercolliding universe, we’re mostly operating in a small town microcosm.

We’ve always told the traveling salesmen who venture down from Atlanta that they should pull off I-75 at the Griffin, GA exit and set their clocks back 25 years.  And for a while, that was true. But these days, our little community is living in a time warp. We’d really like it to be 1980, because we think we understood things back then; but we realize it’s 2010 and we don’t understand that at all.  We can’t keep up with the quarks and neutrinos. They move too fast.

Back to my agency friends. When social networking came about, they dived in head first. They learned about SEO, SEM and Google AdWords. They saw tremendous potential in the simple idea that Facebook and Twitter might actually enable organizations to talk directly with their customers and prospects (and learn something).  Simply put, the new ideas didn’t really take hold in the rarified humidity. My friends tried to introduce quantum physics to the Newtonian world.  Or perhaps they were more like Galileo, who, after failing to convince the Inquisitors of the validity of the heliocentric model of the universe, left muttering “Eppur si muove” (but it does move).

But wait . . . maybe our little time warped microcosm didn’t completely miss  the boat.  Here’s another wayward particle in the supercollider. The header from the Print in the Mix  Fast Fact article reads, “Marketers Indicate Social Media Important, Most Not Profiting.” The short article cites a survey conducted by R2Integrated, an internet marketing company. Of 262 marketing professionals surveyed:

• 54% thought social media was “innovative and invaluable to their business.
• 37% thought it was “useful and helpful,” but could live without it.
• 65% said that their companies had not increased revenue or profited using social media.

The whole idea of these new marketing tools is to make money, right? And isn’t measurability one of the big advantages of social media marketing?  Could there be a disconnect between what these professionals think and what they measure? There are at least 11% of these folks (and maybe more) who think that the new media are invaluable to their business, but aren’t making money. Did they forget to measure or are they just guessing?

Poor Richard thinks that all of these hypercharged electrons flying around are generating static. So much static that it’s difficult to get a clear message through, much less a clear picture of what we’re doing. The big marketing professionals may be trying new stuff and guessing, but around here it’s different. All of the static may have helped confuse our customers into complete inaction, a decision reinforced by an economy that has left few of us with the resources to try anything new.

I’ve always liked “whiz bang,” but the new initiatives our little business has introduced during these past 18 months of Decession (Repression?) have failed to gain traction.  We made a tentative foray into the “marketing solutions provider” realm only to discover that marketing solutions are only needed by those who really intend to conduct marketing.  That’s not happening here in the time warp. Our customers may understand that their 1980s programs aren’t working like they used to and that they should be doing something different. That “something different” is hard to comprehend through the static, though. It’s much easier just to do nothing, which leaves Poor Richard’s printshop and our agency friends spinning our wheels in the slippery Georgia red clay. The excited particles are passing us by. So much for whiz bang.

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.

Very Cautiously Optimistic?

It’s Thanksgiving, and Poor Richard is thankful for a day off. It’s been over a month since I’ve written here. And it’s been a busy span of time. Poor Richard is very thankful for that and for the good customers who have provided work for all of us at the printshop behind the red awnings on Poplar Street (name withheld to protect the very delicate sensibilities of the franchise).

My fingers would be crossed if I had time to cross them.  I’m thankful that our business has been able to survive through this so far, and if business doesn’t tank again in the first months of 2010, we’ll probably pull through OK. OK doesn’t mean unscathed, though. We’re operating with fewer employees that we had when the company first opened in 1998. There is little time to work on the business for working in the business. Because our bank essentially bailed out on us early in the year, there is no money for investment in new technology or new talent. Assuming that the recovery has begun, it’s still going to take a long while to make up the lost ground of the last 18 months.

Last week, Mr. Obama’s administration stealthily held a small business forum to discuss “small business financing issues.”  The forum was announced to the public on November 16, two days prior to the date of the session and received resounding condemnation from at least one group (American Small Business League) representing small business who were neither notified of the event nor invited to attend.  Hosted by Treasury Secretary Geithner, the forum did not generate much excitement or much in the way of reporting after the fact.

That’s because nothing happened. Poor Richard managed to find the agenda for the meeting on the Treasury Department web site.  There’s nothing new there. The efforts of the SBA to open up credit for small business have been lacking and the banks have not been cooperative.  A change in the tax code to allow a 5 year carryback of losses may inject some cash into small businesses next year; but for those who have already failed it is too little, too late. At least 7 small business owners (bios listed on the Treasury site) were invited to the forum and the transcript of Secretary Geithner’s remarks contained several weighty statements, like the following:

“We need banks to be working with us, not against recovery.”

Little was reported in the press or on the internet from the day-long forum. According to a New York Times blog, most of the discussion centered on the needs of banks and their reluctance to get involved with small business.  They also stated that the Treasury Secretary and the SBA Administrator took careful notes. A report from Small Business Trends concluded that, “many lenders contend that small-business loans are too time-consuming and too small to be worth their while.” Hmmm . . .

The small business sector has long been our country’s engine for job growth and for innovation. Guess what? Small businesses are where large businesses come from. Hewlett-Packard started in a Palo Alto, CA garage. Ford Motor Company was launched in a converted wagon shop with a $31,000 investment.  In typical years, small businesses create over 50% of the new jobs in our economy.  In years like the last one, we try to preserve jobs for the folks who depend on us. The economic engine has choked down.

Nonetheless, small business owners are a fairly optimistic group. We have to be. None of us  are really looking for a bailout. Nor do we place a lot of trust in the machinations of government. Our businesses are made or broken by the decisions we make and with the risk we assume.  We have to be optimistic, tenacious, and now cautious. Many of us will come out of this with a healthy distrust and dislike of the banks who were anxious to provide funding for growth in good times but not so willing to help us survive when times got tough.  We will be less inclined to assume debt to finance growth and we will be careful about how debt is assumed.  Many of us will need to repay debt generated during the recession before we expand again.  It may take some time for small businesses to re-start the engines that produce growth and new jobs.

I suppose that I shouldn’t find the administration’s dispassion toward the small business sector particularly surprising. It makes as much sense as taking over GM with the stated goal of restructuring the  company to produce economical and fuel efficient vehicles and then promptly shuttering the Saturn division (which made economical and fuel efficient vehicles). But perhaps the worst really is over and we’ll make it on our own.

Maybe I should find time to cross my fingers.

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.

Inevitable

When we opened our Gralpharaphics (name altered to protect the sensibilities of the franchise) shop in 1998, one of the thoughts that passed fleetingly through Poor Richard’s feeble brain was that this was an industry that was “WalMart-proof.” Printing is just too technical and complex, he thought. They’d never want to get in this business. Wrong!

Last week, WalMart and PNI Digital Media of Canada announced a partnership that will feature printed products and ad specialties for small business as part of WalMart’s Online Photo Centre. The new product features will be rolled out in Canada only . . .for now. See the GraphicArts Online Press Release.

Being of a curious nature, Poor Richard had to check out the site. At first, I was slightly encouraged.  The site is template driven, much like VistaPrint and the other online megaprinters. Business cards are prominently featured with a special offer at $49.99 for 500.  This is no great deal, especially after you add shipping, lead times and PITA factor. Then I dug into the details, checking the other items listed. Uh oh . . . WalMart’s rolling back prices, again. Get your printing here for cheap. Factor in the Canadian exchange rate ($1.10 Canadian to $1 US) and it’s really ridiculous.

Poor Richard has railed against WalMart before (see Why We Need Small Business Part 1 and Part 2). The company has a ruthless history when it comes to small business, driving out local businesses with low prices to gain dominance in every market they enter. Worse yet, WalMart has become part of the American ethos . . . we’re so addicted to the perception of cheap that Joe Consumer is overjoyed when the opening of a new Super WalMart is announced for his community. Poor Richard thinks that it’s tantamount to issuing an invitation to the Visigoths to vacation in Rome or encouraging the high school rake to have his way with your teenage daughter. But perhaps I’m indulging in hyperbole.

I feel very secure that those who shop for printing at WalMart will get the value that they pay for and that they deserve. I am very curious as to how the mega retailer will implement solutions at their customer service counters to the problems that are so peculiar to printing.  Will Joe Consumer, who ordered blue printing and received purple, really be able to get satisfaction from Louise with her bouffant hairdo and cat’s eye glasses? And will he be willing to wait in line for 30 minutes before he finds out that she’s colorblind?

It’s inevitable, and it is unfortunate that small businesses, especially the new ones that are forming in this poor economy, will gravitate toward WalMart’s print services. It may not occur to many of them to look for another small business that might actually become a valuable partner. They may or may not learn the value of relationships in their community, but it is equally inevitable that they will come to resent the mega businesses like WalMart that sap the potential from every market they enter.

Thanks to whoever created the evil Walmart greeter. It’s floating around all over the web and I love it.

Bailout, Please?

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

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

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.