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CEOs Exchange Know-How in Tucson

By Andy Brown

Principals of companies with more than $2.5 million in sales gathered Feb. 6-8 at La Paloma Resort and Spa in Tucson, Ariz., for PSDA’s annual CEO Summit. One hundred and twenty seven attendees—the highest number at a CEO Summit—participated in networking and educational sessions during the three-day event.

A View from the Majors
Brad Cates, vice president of sales and marketing for Standard Register, Dayton, Ohio, surprised attendees with a bold admission: The company doesn’t consider distributors and trade printers to be primary competitors. “I don’t find that we run across the independent segment that frequently,” Cates said, citing larger companies such as R.R. Donnelley, Workflow, Xerox, IBM and Ikon as greater threats. “We have different competitors across different groups,” he said. “We definitely see the office-supply companies as competitors, especially in on-demand solutions.”

Cates lauded attendees for their ability to change in a fast-paced industry. “You can re-position very quickly and effectively,” he said. He noted that Standard Register subcontracts 30 percent of its manufacturing and that he expects that percentage to increase. “We’ve been moving towards an asset-light strategy,” he said.
Standard Register is undergoing a transition, Cates said. Although the industry is maturing, he noted that opportunities still exist for printers and distributors who expand their services and position themselves as more than printing companies. “The questions we’re always asking are, ‘Where do we focus? Where do we point our arrow?’ Positioning is all about looking at your capabilities, looking at your customers and carving out that sweet spot,” he said.

Cates admitted that Standard Register hasn’t always done a good job of positioning itself in the marketplace. Problems occurred when the company tried to promote itself as an information solutions provider, but the sales force didn’t believe it. “Your sales force is your brand,” Cates said. “If there’s a disconnect between what you say and what your sales force really believes, you have an issue.”

The company took a different tactic and surveyed its customers. “Our customers, nine times out of ten, were talking about our people—their responsiveness, that they believe we were helping them try to grow their business. They talked about trust.” The company decided to build on that feedback. As a result of its survey, Standard Register has invested more money and time in training its sales force. The company also plans to hire an additional 60 to 80 sales reps. “We’re spending more energy and more money than ever before on people training,” he said. “I would avoid cutting back on sales training. We’ve made that mistake and now we’re coming back from it.”

Sales Managers Speak Out
A panel featuring three sales managers echoed the importance of developing an effective sales force. Mike King, general sales manager, Midwest Single Source; Ralph Fucci, COO, Vanguard Direct; and Bob Saunders, vice president of sales, Printegra, shared their experiences and answered questions from the audience about their methods and sales management philosophies.

Moderator Pat McMahon, president, One Point Inc., started the discussion by asking how many attendees, by a show of hands, employed a dedicated sales manager who was not a principal and didn’t sell. The majority did not. The panel talked about the benefits of having a layer of management to help motivate sales reps and hold them accountable. The panel agreed that yearly goal-setting is a back-and-forth process between the sales rep, managers and owners of the company. “My belief is that the sales rep has to have ownership of the goal,” King said. “It’s a negotiating process until we find a plan that we think will deliver the kind of results we want as a business.” Fucci said that Vanguard reps have more than one goal or “target.” “We have a target for sales, and we have a target for gross profit,” he said.

The panel also talked about developing sales reps. At Vanguard and Midwest Single Source, future sales reps often start by working in the customer service department. “Just about every new rep in our company, unless they’re an experienced salesperson, spends time in our customer service department,” King said.

On motivating reps, the key is to develop a relationship with them. Saunders goes on sales calls with his reps to identify areas of improvement or to help them gain comfort selling a new product or service. King emphasizes the need for clear expectations. “A lot of the key to motivation is setting the expectation and then making them report on whether they’ve done it.”

Use Market Data to Boost Sales Performance
Chet Holmes, a noted sales trainer and author of The Ultimate Sales Machine, explained to attendees that only 5 percent of all companies reach $1 million in sales. Only eight-tenths of a percent reach $5 million. Besides developing fundamental sales and time management skills, the key to building a great sales force is to position them as experts.

He illustrated the concept by asking attendees to imagine they were addressing a stadium filled with prospective customers. Only 3 percent of those potential customers, he said, are ready to buy. Only 6 percent are open to it. The remaining 91 percent aren’t thinking about you, aren’t interested or are nearly impossible to convince. A good pitch should appeal to everyone in the stadium and drive the percentage of uninterested prospects down.

Holmes suggested the way to do that was by enticing prospects with education and information rather than products and services. For example, he suggested conducting research and then offering presentations on “The Seven Most Dangerous Trends in Health Care” for medical prospects. At least one of those trends, he said, is something your product and service can probably address. “Market data is way more motivational than product data,” he said.

Roundtable Discussions
The CEO Summit also included roundtable discussions, where attendees were seated randomly at tables and given the opportunity to discuss the topics they wanted. During this time, attendees shared marketing strategies, compensation plans, and hiring and organizational strategies. One group discussed how to support sales reps who were selling technology components with their product offerings, such as online ordering or email marketing. Several distributors have hired staff whose job is to go with sales reps on calls where the sale involves integrating the clients’ technologies.

Going “green” was another major topic. More distributors are being asked by clients to attain FSC certification for various products, which means they can only work with FSC-certified manufacturers on those products.

The economy also was a concern. The consensus at one table was that marketing clients are reducing their budgets. Distributors and manufacturers are working to get clients to reduce their inventories. Some distributors in the financial services markets have experienced pressure to lower costs, often driven by a bank’s procurement department. Nonetheless, distributors are optimistic that a recession can result in opportunities for their businesses if they can show clients how to save money and generate revenue.

Build Brands Your Customers Love
Joel Warady, principal of the Joel Warady Group, spoke about the impact of new marketing vehicles on branding. He said that new marketing channels require companies to reinvent themselves. Warady used ideas in Kevin Roberts’ book, Lovemarks, to demonstrate how branding has become a formulaic process and that companies have to go from a respected brand to a brand that’s loved.

Warady also explained the significance of new technologies, such as social networking sites and pay-per-click advertising, in practical terms. He used one of his employees—a 28-year-old marketing director who makes print-purchasing decisions for Warady—to illustrate why social networking sites should matter to printers and distributors. He showed attendees her MySpace page and how she was connected to at least one other influential print buying friend.

Warady also shared Google Ad strategies for printers and distributors. Calling search engine optimatization consultants a waste of time, Warady recommended that companies buy pay-per-click advertising. Because Google ad prices are based on keywords that the advertiser chooses, Warady suggested choosing keywords attached to questions that a print buyer might ask such as “aqueous versus matte.” Doing so increases the odds that the print buyer is looking for exactly what you offer, but it also positions your company as an expert. “If you want to be this company people love, wouldn’t you want to be the company that explains the difference between aqueous and matte coatings?” Warady asked. Of course, once the buyer clicks through to the ad, your website should answer their question.

Another strategy is to use common misspellings as keywords, such as “aqueus,” which reduces the chance that other companies will appear. The ads are so inexpensive that it may be cost-effective to pursue this strategy.

Andy Brown is managing editor of Print Solutions magazine. Email comments to abrown@psda.org.