Worth Knowing

Are You Selling Value?

I was driving in to work when an ad came on the radio selling 25 cent color copies.  This company has gone so far as to put up a web site http://www25centcolorcopies.com . Here users can get a minimum of 100 prints, 8 ½” x 11” on 27 lb text weight (70 lb offset) for 25 cents per print. Prices are clearly stated for heavier stock as well. For this company it’s all about price, there was no mention of quality, but they did mention they would get the prints to you quickly. 

 

Does this pricing strategy remind you of offset pricing? Nothing like telling the users that all print is a commodity and you just need to find the lowest price. Do you suppose someone will come out with a website offering 24 cent color copies

 

About 2 years ago I was at a high volume digital printer out in Long Island. Their president described a strategy similar to the one above, whereby he’d be a high volume shop with click charges so low and volume so high he could price at or below the cost of competitors. A few months later the president was gone and shortly thereafter the company was sold.

 

Now I’m not saying that being the low cost producer can’t be an effective strategy. It certainly can be if it is implemented properly.

 

About a month ago I was visiting quick print shops in the Boston area and ran into a shop that was an order of magnitude bigger than most quick printers. Their strategy was to sell to the trade and their success was built around 3 partners that all “Sell-Sell-Sell”. One of the owners told me that pricing was a key success factor. He knew when to price high and when to price low to get a job.  His competitors all know him and they all know that occasionally he’ll quote a job for 9 cent per color page, which is, of course, lower than the cost for the local competitors. At least in this case the customer is the trade and not end user, and low pricing is done selectively and not broadcast to the entire market.   

 

Being the low cost high volume producer is a viable strategy for some, but it’s a risky strategy as in tough times there’s always someone else who’s willing to offer a lower price. Isn’t it better to harness the unique capabilities of digital print and digital technology to create new solutions that deliver new value and enable higher margins?

 

With digital print you can create value by improving response rates and sales or you can create value by creating systems to manage collateral and other printed and non-printed items. Quantitative measures of the improvement in response rates is documented in Caslon’s Response Rate report [ResponseRateReport] and determining just how much value digital print can add can be determined using the S3 Value Calculators [ValueCalculators]. Both are free for PODi members. 

Are you a resource-aholic?

Are you a salesperson who never saw a customer or an opportunity that you did not like? How about a manager who always wants to implement your latest brilliant idea? Or maybe you’re a printer that has made investments based on a hope and a prayer instead of current business.

If any of these fit, you may be a “resource-aholic.” We define “resource-aholic” as a belief by management and sales that there are infinite resources that can be deployed for any project they desire. Printers that pursue any lead or job that they come across without stopping to consider whether this new customer is a good fit for the business are hurting themselves in the long run.

So how do you avoid this resource-aholic syndrome? Start by reciting the Qualification Mantra: “Deploy your finite resources to work on the most profitable opportunities.” Then institute a prospect qualification process. Printers that have an effective qualification process are among the most profitable in the industry.

Your process should incorporate the following best practices:

1. Create a methodology to segment the type of work into well defined product segments.
2. For each product segment, have qualification criteria that is well understood and documented.
3. Provide a standard worksheet that a sales rep has to fill out before they can take a meeting or accept a job from a customer.
4. Train your workforce relentlessly in understanding the qualification criteria.

Caslon is currently developing Prospect Qualification Tools that will be made available to all PODi members. An “Alpha” version of these tools was presented at our recent S3 User Group meeting and we are moving to a “Beta” stage with select PODi members.

You can participate in this process and help up improve the tools by sending us your own qualification questions. Before pursuing an opportunity what questions do you ask to determine if it is a good fit for your business? What key information do you need to know before bidding on a production type job? If you are looking at a solution, such as a Web-to-Print program or trigger-based direct marketing program, what criteria must be met before you accept the job?

Send us your suggestions by submitting a comment on this blog or emailing chrisd@caslon.net.

Feeding your competitors poison

“I like to feed my competitors a steady diet of poison” is one of our all time favorite quotes from one of our members in the label printing space.  The quote became very relevant during our current research project for a prospect qualification tool for members.  Our research has shown that members that have adopted a process for qualifying their prospect and even re-qualifying their customers were in the top quartile of profitability for all print service providers. 

More interesting was the fact that the prospect qualification tool was more useful in finding out which jobs to take on instead of trying to figure out which jobs would close. What that means is that the most profitable companies were first and foremost using to tool to optimize the time of their customer service and manufacturing and secondarily the time of the sales force.  Saying no to bad prospects and customers and sending this “poison” to your competitors was a sure way to win in the marketplace.

As we continue to do more research in this area, we would love to hear from you. It would be good to hear what type of questions you ask that helps you qualify your prospects?

Growing Sales by Leveraging Mutual Relationships

A recent visit to a new PODi member shed light on an interesting way to get warm sales leads. The $5mil commercial printing company is branching out from commercial printing and fulfillment services into marketing services using 1 to 1 marketing and digital printing. After profiling their target market and target prospects they then look for ways to get an appointment based on a referral.

Naturally they were pursuing existing relationships with clients and exhibiting at local events. However, one particularly clever idea they were pursuing is to find mutual business relationships among their firm and their prospect’s firm and leverage them into referrals.  Turns out by using online business databases one can determine the bank and accounting firm a prospect uses. Then by taking the set that matches to their banker and accounting firm he can get high level referrals into this subset of prospect accounts. 

By leveraging mutual relationships they were able to get referrals to new prospects, save time and jump start their sales process.

For referrals and cold calls Caslon has developed a tool for helping you build your own message to new prospects. The Caslon tool contains sample scripts and hooks for a number of vertical industries and can easily be modified for referrals. Modifications for email and voice mail scripts are also provided. The tool is available free to PODi members as part of the S3 Council.

Advice from Experts: Getting approval to create case studies

Having your own case study can be a powerful sales tool and can drive new business for your company. But how do you get your customer to agree to publish a case study? We talked to three  PODi members about how they get approval. Below is a brief summary of their suggestions. Click here to read the full, detailed article.

Negotiate Early
Bill Nicholson, Director of Professional Services at e-Integrity, recommends beginning discussions early about writing a case study. In their proposals e-Integrity asks clients to cooperate with co-marketing efforts including serving as a reference and potentially publishing a case study.

Rab Govil, President of PODi, also suggests using a case study as a negotiation point in the contract stage. If a client requests a special price or service consideration you can ask them to agree to have a case study written about the program and include that provision  in the contract.

Make Your Customer Look Good
Christopher Wright, Director of Sales and Marketing at MSP Digital Direct says that he offers case studies to his contacts as a way for them to personally get recognition. Wright says that a case study can be used by a Director of Marketing to highlight his or his department’s success to superiors and peers.

Christopher DeSantis, President of RI Communications Group, says there are two main benefits for a customer to agree to a case study.

1. Personal satisfaction and growth for the program driver. DeSantis shared that his customers have included their PODi Best Practices Award recognition on their resumes.
2. Recognition for the company. Case studies highlight the originating customer as an industry leader. It is an excellent way for them to separate themselves from the competition. And who doesn’t want to differentiate themselves?

Know What Success Looks Like
Another point from both Nicholson and Wright is that it is important in the early planning stages of the program to know what metrics the customer will be measuring and what they will consider a success. When you can prove the success of the campaign your customer will be more willing to support your effort to write a case study about it.

Be a Strategic Partner
Ultimately a strong relationship with your customer is key to getting approval for a case study. Make sure that you are viewed as valued partner in the communication solution, not just the company that puts ink on paper.

Overcoming Objections
One of the most commonly heard objections to a case study is that a customer does not want their competition to see what they are doing. DeSantis shared that while this may have been a legitimate objection in the early days of digital print, he feels it is no longer a valid point. In today’s communication age if any company (including your customer’s competition) does not know about relevant marketing and the potential of one-to-one communications then they are not an industry leader.

Once you get approval to have a case study written be sure you submit it for PODi’s case study collection. Simply give us the details of your success story and we'll turn it into a polished case study. Service providers tell us that having their story published by a recognized industry association gives added credibility to their case study. The deadline for submissions is June 30th. Go to www.podi.org/casestudy/bpsubmission now to begin your submission.

Read the full "Getting approval to create case studies" article.

How going from $65,000 to $2,000 in print revenue can be a good thing

We recently spoke with Walter Payne, president of ImageMark and a member of PODi, who showed us that decreasing print revenue can be a good thing. The key was developing a solution that met the customer’s needs and also established the service provider as a strategic partner.

ImageMark’s customer was an aftermarket automotive supplier customer that had 125 different flyers that they were spending $65,000 to reprint annually. By moving this collateral to a print-on-demand solution the service provider saved their customer thousands of dollars and now they only spend $2,000 annually on production. But most importantly for the service provider, this program enabled them to build their relationship and credibility with the customer. From this print-on-demand solution they have branched into other lucrative marketing programs for the customer.

An important insight shared by Walter is that Web to Print solutions are a key application to promote during a down economy. Here’s why…

Marketing departments are currently experiencing tremendous pressure to reduce costs while increasing results. Printers can address this need by offering a Web to Print solution which will reduce production costs by only printing documents as needed. This also reduces costs associated with inventory storage, waste due to out-of-date materials, and labor costs associated with manual pick and pack kitting. Web to Print solutions can also have the added benefit of controlling the company brand across all collateral while allowing individual dealers or channel members to customize materials for their specific needs.

Another reason to promote Web to Print solutions is that they are very “sticky,” meaning that once the program has been implemented the customer will find it difficult to move elsewhere. The service provider wins because these sticky solutions provide recurring revenue and the marketer wins because they have found a partner committed to providing high-value, on-going services.

To learn more about Web to Print solutions check out these resources which are free to PODi members:

·        Our online case study database at www.podi.org/casestudy. In the left-hand navigation select Application / Collateral Management/Personalized Sales Collateral. Some recent case studies to review are:

·        Invisalign Increases Sales and Brand Awareness with Personalized Marketing Collateral – Reduced production costs by $380,000

·        Disney Destinations Cuts Costs and Improves Results With Customized Sales Collateral – Cut printing and storage costs by 50%

·        Smith & Nephew Reduces Cost and Saves Time Using On-Demand Sales Collateral System – system has saved company hundreds of thousands of dollars and cut turnaround time

·        For help in selling these solutions review the Collateral Management Solution Presentation in the S3 Council.

How to recover from a campaign that falls short

What do you do when the direct marketing campaign you are delivering comes up short?  If you lived in the movie world you’d go to the MIB (Men In Black) set and pick up the flash light that erases memories and shine it in your client’s eyes. If you live in the real world you might be inclined to think you should be off looking for another client, but that’s not usually the case.  Here’s why.  Most of all, your client wants to be viewed as a success and while this campaign wasn’t a success your client selected you as their vendor and so your client is vested in your success as well. Blaming the vendor for a poor campaign doesn’t make your client look good.  What he or she needs is good analysis of what went wrong and solid recommendations of what to do going forward.  And who is in the best position to provide that info? You.

Setting the right expectations (good or bad) upfront is a critical part of the third component in the S3 selling process – expanding the relationship. Here are 3 things you can do.

1. Be proactive.  If you are managing or have access to the results as the campaign unfolds be the source of information for your client for what’s working and what’s not working. Evaluate the impact of some problem and try to deliver the bad news even before the client knows. Being proactive will win a lot of brownie points and they will be in sharing mode. Nobody wants to be surprised.

2. Every campaign should include a post mortem analysis.  It’s best if you lead the analysis and examine how each of the 4 key factors affected the campaign outcome. Offer to call a couple prospects on the list and get their response to the campaign. Finally, You should make recommendations on how to adjust the campaign going forward.

Factor	Questions to Ask
List	·         Was the target market identified correctly? ·         Are the names on our list really the buyer? ·         Is the list up to date? ·         Did they receive the piece?
Offer	·         Did we address the pain points? ·         Was the offer compelling?
Timing	·         Did we miss the buying window?
Creative	·         Did the creative communicate the key benefit of the product for the target audience? ·         Was the piece persuasive? ·         What was the call to action?

3. Testing. If you put your toe in the water and it’s really cold don’t jump in. One of the great benefits of digital printing is there are no huge set up costs, which makes it easier and more affordable to test. You want to manage your media dollars carefully.  You can do that by testing small lot sizes of 1,000 or 500 or even 200 pieces. You are not testing for response rates with the small lot sizes; rather you are testing for failure. If you send out 500 you should get at least 10 responses. If you don’t get any or only a couple you need to make adjustments before continuing. Direct marketing is not an exact science so testing and adjusting should be viewed as a normal part of any campaign.

In summary, be proactive in supplying your client with information and analysis about every campaign. Always include a post mortem analysis along with your projects and test before you spend all the media dollars.  Setting the proper expectations at the start of the campaign and following these steps you’ll be able to set the proper expectations with customers and recover from an occasional bad campaign.

Why Didn’t My Campaign Work? An Analysis

Recently one of our members reached out to us and asked for our help regarding a lead generation campaign that failed miserably. First of all, I want to say that we love getting these questions from our community and we are very surprised that our members do not reach out more often. We have a service called “Ask the Experts” for just these kinds of questions, and it is absolutely free to PODi members. So click on the link and ask away! We are here to help.

Now back to the question asked by our member about his unhappy campaign.

The campaign resulted in 0 leads and only 12 people even visited their personalized landing page out of a list of 10,000. Not a good ROI at all! So what went wrong?

The campaign was a postcard with a personalized landing page. It featured a good offer – a $20 gift card for coming to the landing page and filling out four simple questions. It had many of the components that should lead to success but still failed.

Upon reviewing the campaign, it became clear that it failed because the creator did not follow the basic rules of direct marketing. The company fell into the age old trap – if I put someone’s name in bold letters on a direct mail piece and drive them to personalized landing page, suddenly the response will go through the roof.

It has never been like that and never will be. All response in direct marketing is driven by this basic rule:

1. List - 30% of the response is driven by who you send your offer to
2. Offer - 30% is driven by the value of the offer to the recipient
3. Timing - 30% is determined by when you send it – is the customer in the buying window?
4. Creative – 10% depends on the creative elements utilized.

If we apply this rule to our campaign, here is how it fared.

List – The campaign was designed to generate leads for a service to retail chain stores. The postcard was sent to corporate locations and to people at the C-level of decision making for that service. Potentially a good list.

Offer – The gift card offer was good, but it was not highlighted or detailed on the direct mail piece. There was no real reason for anybody to go to the landing page. I was surprised that even 12 people visited. Worse still, the value proposition was so generic – save time and money – it could have been used for any industry, any service. In fact, the direct mail piece only mentioned the actual product/service once. Your client wants to know that YOU know their industry and their unique challenges.

In terms of other persuasive elements, the actual landing page had a great testimonial but it was in paragraph form which few people read. An excerpt of the testimonial should have been on the DM piece to build credibility for the company and then followed up with more detail on the landing page.

The landing page also devoted a huge amount of real estate to the company logo and to a picture of the quoted customer. Neither was what prospects wanted to see.

Timing – This was not a factor as this was a lead generation piece and none of the recipients had every expressed any interest in buying this service from the company.

Creative – The visuals centered on photography of the team who delivers the service. They look like very nice people, but their picture tells me nothing about what their company can actually do for me. Do they understand my business? Do they know the industry? Are they experienced? Do they have the connections to get me the best selection and value? What qualifies these nice looking people to work with me? (Strangely, there were no visuals of the actual product/service – nothing to connect the postcard to the issues being addressed.)

The target audience, C-level decision makers, care more about enhancing their company’s prestige and appearance to their customers, than who actually does the work to make it all happen. With a C-level audience, you need to pitch the solution to a problem they face, not show them the tools you will use.

Neither the imagery nor the copy did the product or the company justice in terms of building credibility.

In summary, always follow the rule of direct marketing and avoid using technology as a crutch. To help our members, we have some great tools in our Application Delivery Council. (Be sure to login first to get member access.)

Start with the Lead Generation Campaign Brief to help organize your thoughts and hone your message. Use the Design Templates for Postcards and Landing Pages to ensure that you include all the important content and don’t forget anything vital. And then deliver the best campaigns possible!

(You’ll also find templates and briefs for Nurture/Loyalty campaigns in the AppD Council.)

Again, we love to hear from you. Call us – we are here to help.

Direct mail leading channel for customer acquisition

Direct mail is still the channel of choice for customer acquisition and runs a close second for customer retention according to the recently released Media Usage Forecast by Target Marketing.

Customer Acquisition
In 2008, 52% of direct marketers’ media budget will be spent on customer acquisition. According to Target Marketing’s survey, 34% of direct marketers found that direct mail delivered the strongest ROI for customer acquisition. Email came in second place with 24%. In terms of usage direct mail still comes out on top with 81% of direct marketers reporting that they use direct mail for customer acquisition. This is followed closely by email (78%), search engine marketing (60%) and search engine optimization (59%).

Customer Retention
When it comes to the ROI of customer retention efforts, email and direct mail are very close. Thirty-seven percent of direct marketers reported that email delivered the strongest ROI and direct mail came in a close second at 33%. Although the ROI is close between these two channels there is a preference among marketers to use the less expensive email channel when communicating with existing customers. Eighty-five percent of marketers plan on using email in their customer retention efforts, compared with 76% who plan to use direct mail.

Direct Marketing Spend
The majority of direct marketers anticipate that their total media budget for 2008 will either stay the same or increase compared to 2007 expenditures. Not surprisingly the growth of electronic channels is outpacing that of direct mail. Eighty-nine percent of marketers plan to increase or maintain their budget for email marketing. This compares to 76% of marketers who plan to increase or maintain their budget for direct mail.

Among those that are planning on decreasing their direct mail budget, rising postal and paper costs were noted as factors in the decision.

What This Means for Print and Marketing Service Providers
Some of the respondents who planned on increasing their use of direct mail cited advancements such as variable data personalization, Personalized URLs and targeting abilities. Service providers should work with their customers to incorporate these relevant marketing techniques to increase their overall campaign effectiveness.

PODi members should take advantage of these resources:

• Educate your sales staff and your customers with PODi’s digital print case studies. Use the advanced search function to look particularly for Direct Marketing Lead Generation cases and for cases that incorporate Personalized URLs. Also, look for 46 new case studies to be added to the online database next month.
• Learn how you can help develop an effective customer retention program by reading the New Customer Experience report. This report is free to PODi members and may be purchased by non-members at our online store.
• PODi members should also utilize the sales tools on the S3 Council site including the Lead Generation Solution Presentation and Value Calculator. All the resources on the S3 Council site are free to PODi members.

Xeikon Revs it up for Drupa

Xeikon announced a new product for Drupa, the Xeikon 8000 (www.xeikon.com).  It’s essentially a much faster version of the Xeikon 6000. The new product produces 230 A4 pages per minute (up from the 160 ppm rate of the Xeikon 6000.)

While this toner-based product doesn’t have near the speed of the new color inkjet devices it has something they don’t have and that is 1200 dpi quality. The Xeikon delivers the level of graphic arts image quality required for many promotional commercial printing applications.

The market now has a number of high speed (1000 to 2000 ppm) ink jet device that don’t have quite have graphic arts quality. And now the market has its first 200+ ppm color printer with high quality. It will be interesting to see which vendor can get both: very high speeds and high quality.

The Xeikon 8000 offers:

*  speed of 230 A4 pages per minute

*  duty cycle of 8.5 million A4 pages per month

*  1200 dpi image quality at 4 bits per spot

*  Real-time variable data handling capabilities

*  An extended range of paper input and output options

*  Eco-friendly design and consumables