Charlie Hiser, CDC, has been an instructor at numerous DMIA schools. He also was honored as the DMIA Member of the Year in 1996. When looking for a small distributor to share his insights on specialization and niche marketing, I thought of Charlie first. Thanks, Charlie, for taking the time to share with us.
What I enjoy most about DMIA is the incredible mix and diversity of its membership. While we share the common bond of "printed products," many of us migrate toward different product offerings to enhance our positions. In fact, I'm amazed at the kinds of products our membership sells. The list goes from A to Z.
Because we're all in the printing business to some degree, niche marketing and specialization allow us to differentiate ourselves from competitors. As a "small" distributor, I chose to specialize for two reasons: I felt I needed to do so to survive, and I wanted to offer products and services I simply enjoyed. One such offering is technology.
When I started in this industry 27 years ago as a rookie with Wallace Computer Services, most of the majors sold similar product mixes. A couple of years after working for Wallace, we were given the opportunity to sell Printronix printer-based bar code printing systems. I was in heaven. Finally, a chance to work hands-on with hardware and software! I immersed myself in the technology and became something of a bar code expert, a subject most competitors knew nothing about. A closet computer geek, I finally had the chance to talk to my customers about something besides consumables.
Wallace also began to promote an inventory management system, which was interesting. Unfortunately, I didn't have a customer large enough to justify its use, so I never worked with it. I did have a data processing service bureau as a customer, though, and I convinced the company to loan me a terminal, printer and modem. I taught myself the computer language DG Basic, then wrote my own management system, which I provided free to my small customers. I never lost forms business in any account that used that system.
I was sold on the importance of differentiating my company. In my case, technology was the differentiator.
Since my time with Wallace, I've been lucky enough to own and/or work with companies that have allowed me to dabble in technology. John Loftis at Innovative Business Products and John Rutledge at Piedmont Graphics have been kind enough to put up with my rather eccentric marketing theories. This has been a blessing and a curse.
The latter is true because technology is hard to keep up with, no matter how hard you try to focus on one particular area of it. This is especially true for a small distributor with little, if any, staff. For a textbook attention-deficit guy like me, that fact is a nightmare. I've had to focus more and more on fewer products. I've had to give up trying to sell many items I previously rationalized could fit into my product mix. If you've ever taken away a 3-year-old's favorite toy, you can imagine how I reacted to that.
But I enjoy learning for the sake of learning. And while it's nice to continue to educate yourself as you grow older, you do occasionally have to sell something to pay the bills. In my case, it's become more difficult and time-consuming to keep up with all of it, not to mention support what I sell. Like most entrepreneurs, I think I need to do everything myself, including sales and support. That doesn't work in the technology arena, at least on a large scale, if you're a small company.
If you're aren't careful, you can get so involved in your niche that you forget what got you there in the first place. In my case, I began to sell technology for technology's sake, and I forgot about the printing business. I forgot I was using technology to get to the document business, not the other way around. That was a huge mistake, as printing sales paid the bills.
So, I've had to change (it's a work in progress), and it's been a good thing. As the technology market has matured, it has forced me to mature from a marketing standpoint, too. As a small distributor, I've had to look at all the technology products I've worked with during the past five years, then choose to sell and support only those few that fit my traditional forms/label background. To be honest, that still means plenty of products I can discover.
The key for me has been learning to market my technology background. My target market is small- and medium-sized businesses, many of which have been devastated by cutbacks in spending during the last few years. I also target certain departments in larger companies, which also have been hit by cutbacks. By concentrating on document-oriented products, both printed as well as hardware/software, I have a product mix that most competitors can't or don't offer. It's a mix I can sell and support easily. When competitors do offer the same types of products, they typically have to send in several "specialists" to get things done. This gets expensive, often requiring more time than end users have in order to solve their problems.
A case in point: My company sells an inexpensive medical lab tracking system, which I designed and took to a local medical client looking for such a system. My competition was two off-the-shelf products, one sold via the internet and one sold by another vendor. Both were less expensive. The client purchased our product because we could a) modify the application to its needs, b) help install it while the company's IT department concentrated on other tasks, c) support the product on site and d) provide all the products required to make the system functional. Without our technical specialization, we wouldn't have closed this deal.
Where is the document business in all of this? We now get to look at most labels this department uses (a bunch), as well as a number of electronic forms--items we couldn't have sold to them if we hadn't distinguished ourselves with technology. More importantly, my technology specialization allowed me to earn a consulting contract with this customer, and I get paid an hourly rate to solve problems for the firm. Is this a great country or what? (That comment seems tongue-in-cheek, but as forms representatives, how often do we spend a bazillion hours designing a form, then make money only on the gross profit from the printing cost? How often do we get paid for our time?)
Running a small company in a big pond that includes a lot of small and big fish, I had to do something different to survive. It doesn't take an Einstein to recognize that necessity; DMIA is full of members who have accomplished the same thing. If there's a difference, it might be that I chose technology as a differentiator, an arena usually reserved for the big boys. I think the key, especially for small companies in the industry, is that you have to be different to be remembered, and the difference needs to be useful.
I'm in an area where textile and furniture manufacturing are primary industries, and both are heavy users of data collection technology. In some cases, it's voluntary; in others, the supply chain forces the adoption. For example, everyone in the textile business has been affected by Wal-Mart's product identification requirement in some way. (Wal-Mart recently mandated that its top 100 suppliers begin to use radio frequency identification.) While companies such as Sara Lee have huge staffs to facilitate compliance with Wal-Mart mandates, Joe's Sock Company doesn't. And he's my target market.
Differentiation has allowed me to have fun. I remember sitting in an advanced sales school in the late 70s, listening to one of Mead Corp.'s top salespeople talk about differentiation. This guy was sharp, wearing a $1,000 suit and shoes so shiny that the reflection practically blinded me. Someone asked him what he did to differentiate himself, and he replied that beyond all the normal things like service and quality, he cut hair. He said that many good paper salespeople were out there, but to his knowledge, none of them cut hair. He opened his coat and pulled out a pair of barber scissors and a comb, offering any of us a trim.
I'm not sure how useful it is to give customers trims, but it has been 25 years since I attended that school, and I still haven't forgotten him. Hopefully, a number of my customers won't forget the forms guy who fixed their computers.
There are many ways to differentiate yourself from the competition. I would again like to thank Charlie for sharing some of his perceptions with us.
Phil Schmidt is president of distributorship Advanced Systems & Forms Inc., Livonia, Mich., and president of DMIA.
