The third party: Print management and the corporate-customer relationship
By Bob Dale and Gord Griffiths
By Bob Dale and Gord Griffiths
There are many players in the “print management” market, including Innerworkings, HH Global, DCM (Data Communications Management), RR Donnelley, Xerox and others. They have negotiated a role with major corporations to manage print procurement and other aspects of creative and print management on behalf of the organization.
What do these companies do that printers don’t? From the website of Innerworkings, the largest print management firm with almost $1 billion in annual revenue, at the core, they: “…leverage our global expertise, certified supplier base, proven methods and proprietary technology. …Services include creative, print, direct mail, branded merchandise, packaging, retail environments, and digital solutions”.
I’m sure if we check out most websites for the progressive printers in Canada and the US, we would find similar value-added statements.
It was announced this summer that HH Global acquired Innerworkings. Both companies act as intermediaries between printers and their former loyal corporate customers. By combining print volumes from many clients, taking advantage of overcapacity in the industry, they have forced printers to accept unsustainable price reductions. The impact has been devastating for many printers.
While pricing has not been sustainable for printers, it appears that the approach was not sustainable for Innerworkings, either. Despite generating over $1 billion in annual revenue, they have not had a profit since 2017.
Print consolidation and bidding software were originally introduced as e-commerce tools with platforms like Impress, Print Café and Collaboria, and procurement tools like Ariba. With the exception of Ariba, the other platforms do not exist. The common premise for these tools was enter the print specifications and use the ecommerce platform to solicit bids from many different suppliers. The problem with that was that it takes expertise to write specifications and also efficiently plan a print order.
Ever wonder how Innerworkings or Xerox got the opportunity to provide print management services and you, the print expert, did not? Besides their brand image, they nurture client relationships at the executive level. Best practices used in large enterprises is to ensure that there is a senior executive relationship with their top-tier suppliers. These relationships are designed to understand current strategy and challenges, industry and technology changes, and together explore strategies to work together to address issues, improve efficiency and ultimately reduce costs. Make sure your sales rep is not the only person that the enterprise customer meets. Build relationships between senior people with the intent to really help and bring true added value to the relationship.
What about the enterprise customer?
Enterprise executives and some senior procurement experts recognize that managing print is different, and there is a complex life cycle with hidden costs that need to be managed. Internal staff don’t have the same expertise and processes offered by major print management firms.
They do not understand the cost impact of the full supply chain, and instead focus on the purchasing function, searching for the lowest unit cost, instead of understanding the impact of creating and version management, warehousing, distribution and obsolescence.
Once the enterprise has outsourced the procurement function, they lose control. They lose visibility of the cost, since the data is now in the vendor’s control and the third party is not passing on all the savings promised. However, the initial problem of lack of expertise and formal process was solved, but often at considerable expense to the organization.
What about the printer?
If your blue-chip enterprise client’s printing is now managed by a third party, here are some suggestions:
- Try to replace that customer with another to retain a direct client relationship.
- Provide full service – explore how you can become a provider for the total supply chain.
- Use your expertise to become a competitor to the print management firm. Can you also provide a full range of marketing solutions, either through internal capabilities or through a strategic relationship with another firm?
- Go online – develop an e-commerce platform and form direct relationships with customers.
- Diversify – explore if you can expand into other areas that your clients will benefit from, like labels, packaging or wide format.
The key to success is owning the relationship with clients. The relationship is your asset – literally – and it’s called goodwill. Recently, Joel Quadracci was interviewed and he was asked where Quad’s sales growth was going to come from. His response was, from Quads’ current customers! His advice was instead of providing a client one or two lines of business, leverage your relationship and sell two, three or four types of business services.
While customers don’t usually care about technology, offering litho and digital is a given, but offering on-site creative and production management support, installation for the wide-format products you produce, distribution and inventory management are all value-added services that many clients need.
The bottom line
- Look at your relationship and business offering from your customers’ perspectives.
- Continually re-assess your value-add and services for your customers.
- Understand the life cycle of the printed product and cost impact at each stage.
- Train your team on “solution sales”.
- Invest in equipment and innovation!
We wish you continued success!
Bob Dale and Gord Griffiths are partners in Connecting for Results Inc. Their focus is to facilitate mergers and acquisitions that maximize results for all parties, and provide recruitment and consulting services. Both Bob and Gord have many years of experience, with Gord holding positions as the President of Quebecor Canada, and COO of Cenveo. Bob has over 15 years’ experience offering management consulting services, transition execution and support. He was a part-time faculty member of Ryerson University. Over the past 14 years, he was employed by RBC as a specialist to lead national and international efforts for effective print management. They can be contacted at email@example.com or by visiting https://connectingforresults.com.
This article was originally published in the September 2020 issue of PrintAction.