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When “state of the industry” is mentioned, thoughts turn to equipment and technology. In truth, the rate of change in buyer-seller relationships is at least as rapid and significant as developments involving technology.
Print buyers today may be responsible for all their companies’ communications, including email, broadcast, telemarketing and fax. A primary motive in selecting suppliers is avoidance of the mechanics of the print process. A result of this “just do it” attitude toward suppliers is an increased opportunity for distributors. Their ability to provide information (or more accurately, to be perceived by customers as sources of information) represents an opportunity for competitive differentiation in this commoditized environment.
For example, postal rates will rise in May, and there will be many significant changes in rules, regulations and standards for qualifying for specific classifications of mail. Increases in postal rates may result in smaller budgets for print. On the other hand, the increased rates present an opportunity for distributors to offer suggestions and information about steps customers can take to improve the effectiveness and productivity of their print purchases. Failure to offer this type of information inevitably results in tighter price competition.
Trends in 2007
A trend identified by our research is the growing level of ignorance by print buyers about the capabilities and services of even their largest suppliers. It’s a consequence of several factors: personnel changes, expanded job responsibilities and the assumption that people will understand and remember such things. In this environment, a salesperson should consider formal monthly communication with each customer regarding capabilities.
“The selling challenge in 2007 is to help customers with solutions that more than offset increased costs.”
Look for transportation and distribution costs to escalate further in 2007. This phenomenon isn’t confined to the U.S. Postal Service. Common carriers continue to suffer from a shortage of drivers. Government regulations regarding hours of continuous “over the road” service and installation of “black boxes” in vehicles engaged in interstate service will result in price increases.
The onslaught of perceived commoditization continues. Most buyers believe that good product delivered on time at a competitive price is available from multiple sources. You probably don’t have any unhappy customers, and the reason is that the ones who were only slightly displeased moved on because buyers today see no risk in switching suppliers.
Perceived commoditization, a syndrome that afflicts virtually every industry, elevates the need for a distributor and manufacturer to meaningfully differentiate themselves from competitors, to provide customers with a unique reason to buy. In 2006, I saw some first-rate manufacturers go out of business because their product-based business model no longer worked.
While few costs are decreasing, distribution costs continue to increase more sharply than print manufacturing costs. Most distribution costs, especially postal rates, are not negotiable. The selling challenge in 2007 is to help customers with solutions that more than offset increased costs. The challenge differs little from previous years.
Some good news as we head into the year: “Integrated marketing communications,” also known as multi-channel marketing, is a concept now supported by evidence. Print is now accepted as an element in the marketing mix. There is less debate about print versus email or another mass medium. Print is here to stay.
Contributing Editor Dick Gorelick is an award-winning authority on sales, marketing and business strategies for the printing industry. As president of the Graphic Arts Sales Foundation in West Chester, Pa., he travels extensively, consulting, writing and speaking on sales training.