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Chuck Gehman of Mimeo on transitioning to a marketing service provider

Published on January 13, 2011

Chuck Gehman, VP of Product Management at Mimeo tells Cary Sherburne that printers who are considering moving from printer services to marketing services should carefully consider.

Cary Sherburne:  Hi, I’m Cary Sherburne and Senior Editor at WhatTheyThink.com and I’m here with Chuck Gehman who is Vice President of Product Management for Mimeo.  And Chuck we’ve known each other a long time and I know that you don’t always like go with the flow or the crowd, you’ve usually got some leading edge and some different ideas.  And we hear a lot about how printers have to move from being print service providers to marketing service providers and I understand that you’ve got some feelings about that topic.

Chuck Gehman:  I do.

Cary Sherburne:  Surprisingly.

Chuck Gehman:  I think that it needs to really be well considered for a printer to decide to do this.  That’s probably the biggest challenge I have with it, that’s it’s being over hyped in the media, so the present company accepted, of course.  But I think printers needs ideas to improve and expand their business and to fill in for volume that they’ve lost and they may or may not be it depending on the circumstances of the printer.

There are other ways to expand and grow your business and succeed, besides being a marketing service provider, whatever that is because the other problem I have with it is it’s a little ambiguus term.  If you do a Google search for marketing service provider you will primarily come up with people that send emails.  They’re email service providers.  So I think that’s something we as an industry have to consider.  Recently Margie Dana wrote an article about printers calling themselves marketing service providers to disguise the fact that they’re printers.  And from her standpoint as somebody who represents print buyers thinking that’s not such a good thing if you’re...

Cary Sherburne:  Well, you know, it’s interesting because if you are positioning yourself as a marketing service provider but you’re not walking the talk then you just lose credibility instantly.  I mean, so I was speaking with a company that did make a transition successfully, Sugar Bush Media Solutions, Mark Parent and he did it the hard way.  I mean, he just sort of said, “Okay, I’m just going to make this migration,” and he lost a lot of business in the beginning because what happened was most of his customers were agencies and they said, “Wait a minute you’re competing with us.”

So the lesson he learned out of that was, hey first of all I have to have the knowledge about how to market.  I got that but then I also have to have a plan and then I might want to start this as a separate business and let my traditional printing business fund the growth.

Chuck Gehman:  It’s true.  It’s very true.  And there’s another conundrum for printers.  If their printing business is suffering and they think this is a way that they will get more print volume on the presses that could be a recipe for disaster.  In fact, I really started to think about this when I read your interview with the Mallard press guy.

Cary Sherburne:  Oh right. with Bob Gay.

Chuck Gehman:  And I’m looking at that going, you know, one thing that really struck me was he said if I had to do it all over again I’d go hire a CFO and a salesman and give them equity in the company.  And I’m looking at that going, why didn’t you just do that and not do the marketing service provider thing?  That probably would have been the thing – the difference between success and failure.  So I think that’s something to think about.

Cary Sherburne:  Yeah and the other thing that Mark Parent said, not to overuse him but he’s done such a great job is that, you know, you have to read everything.  You have to go to the venues where the marketers are?  You have to really live in their world and he claims to have read just about every book on sales and marketing that’s ever been written, maybe, maybe not.  But none the less he’s very well read in the subject so you’re able to really have that credibility.  If you walk in there and you don’t have the marketing credibility forget it.  I mean he says, “If marketing is not your thing don’t go there.”

Chuck Gehman:  I think that the printing business is very tough and competitive.  This is even more tough and competitive, you know, it’s sort of another league when you start getting into what advertising agencies and marketing companies actually do.

Cary Sherburne:  I think that’s given our listeners and viewers and readers a lot to think about.  Thank you.

Chuck Gehman:  Thank you.

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Discussion

By James Harvey on Jan 13, 2011

Dear Chuck and Cary:

You make a good point about media marketing services being too vague. I would argue a slightly more specific term such as “Market Response Provider” or “Market Response Operations” would be more appropriate for where successful printers are going with the addition of auxiliary services and the proliferation of both digital printing and automation.

What’s the difference? Once of print’s traditional strengths is traceability. From coupons to direct mail, print can be traced to direct sales … response … more easily than broadcast media, many forms of internet advertising and most forms of social media, where the focus is typically low CPM and brand awareness building. Some technologies, such as QR codes and PURLS have promise, some such as marketing through Twitter, look like fads. And there seems to be an onslaught of new concepts tossed out everyday, with ideas like cloud printing and cross-media publishing currently bubbling to the forefront.

So how should printers, or market response providers, judge what to invest in and what to avoid? It always helps to go back to the customer. If the print industries distinction is that it can more easily be traced to response, then when considering a portfolio of auxiliary services, how would new services or technologies help you answer the following three questions from customers:

1.) How accurate can you help me be in defining and reaching my target audience?
2.) How fast can you help me get from my idea or objective to a response, be it sales or audience action?
3.) How can you help me reduce the cost per sales, or the ratio of the cost of sales to gross income?

Like our own industry, almost all industries are under the same pressures. Few folks have the budget to expand market at any cost. Just like production operations, the question is how to optimize the cost-effectiveness of sales.

IMHO

-- Jim

Jim Harvey
Executive Director
CIP4 Organization

 

By Cary Sherburne on Jan 13, 2011

Good points, Jim! In the spirit of multimedia, maybe you can also give us a video response!

I am currently in China which has more than 100K printing establishments (1/3 of which are in Guangdong province near Hong Kong), and the industry here is still growing. One wonders if that growth will be sustainable long term. right now they aren't worrying too much about the same challenges most of the developed world is facing, although one would hope that they can learn from mistakes made elsewhere.

I found it interesting that despite the huge popularity of QR codes in Japan, and the number of smartphones you see here in China, that I saw no QR codes on my whole trip! Maybe in Beijing ...

 

By Alin Jacobs on Jan 14, 2011

Just a few thoughts and a possible revelation…

You’re right Chuck; there is a lot of hype about Marketing Service Providers. But it’s not all smoke and mirrors. Many commercial printers have successfully reimagined themselves. And many more will adapt to the processes necessary to prosper from the evolution of new marketing.

The way I see it; business as usual is yesterday’s news. Emerging technologies has changed the business landscape forever. Along with the challenges often associated with change come new opportunities. How we embrace those opportunities would make for an interesting and exciting brainstorming session.

Like it or not, we live in an always connected, email addicted, text-messaged, social-media driven world. But that doesn’t mean that traditional direct marketers can’t take the lead in this era of new marketing. In fact, I believe that commercial printers that have embraced variable-data and digital print technologies could be the logical successors to the Marketing Agency’s of tomorrow.

 

By Chuck Gehman on Jan 14, 2011

Hi Jim,

It's actually kind of fascinating to hear this coming from you. This is an existential question that has troubled the printing industry for years: what are printers-- service providers, or manufacturers?

I, for one, would have pegged you as someone in the manufacturing camp, for the obvious reason of your employment by CIP4!

The main point I was making in the video (and in a couple of other pieces I've written) is that yes, some customers need solutions to the three challenges you describe and maybe we can call a company who answers those needs something like a "marketing service provider", although I'm not a fan of that name.

There are many other problems we can solve for customers that don't involve us doing things that we aren't well positioned to do.

We all need to embrace cutting edge technology and be the best at what we do-- that's a key part of being a printer, it is part of our tradition.

But first you have to understand your customer and the ecosystem in which their company or department is functioning. Fortunately, most of the people in the industry promoting the MSP concept also advocate the basic idea of speaking to customers, having a real conversation instead of "asking for orders." That part is great.

Once you have the conversation with customers (and perhaps more to the point, prospects) about their problems and how you can solve them, it should become obvious what investments to make.

Let's use the example of QR codes since you mention them. Did you know that more than 90% of the phones in the US can't even read a QR code? This technology (or something like it, because QR is not necessarily the "standard" that is going to stick) will definitely be gigantic in the future, and the future comes quickly these days, but 2011 likely isn't "the year of QR codes"; maybe 2012.

Fortunately, QR codes (from a manufacturing standpoint) are a great example of something that can be done with minimal investment in software and perhaps zero in hardware, but require a little bit of tech savvy.

I have never, that I know of, printed a QR code for a customer. Yet. If a customer asked me to do that, I absolutely could. This doesn't mean none of them are interested in doing it. So it is important to me to create an environment where a customer who is interested in such things would naturally gravitate toward us to help them with it.

But my involvement in that is going to be as a manufacturer-- I am going to print those QR codes. I am not going to manage that campaign from end-to-end, because I am not an advertising agency. That's not what we do.

And furthermore, QR codes are part of a much bigger marketing infrastructure that few printers could manage-- starting with basic web technologies, but also including emerging technologies like location-based services, all of the identity and presence technologies, and more new stuff-- it's a huge challenge that big retailers and well funded internet marketing companies alike are struggling with.

Let's continue the debate. I am glad to see you joining it. It's extremely important. Printers need good information, and Whattheythink is certainly leading the charge on that!

 

By Pete Basiliere on Jan 14, 2011

On top of that, consider the print industry in the USA. The PI Top 400 range in annual revenues from $9.9 Billion to $4.2 Million. The other 28,600 printing companies are under $4.2 million in revenues! The vast majority cannot become an MSP. People promoting the concept - and providers offering support - are talking to a very small universe.

 

By James Harvey on Jan 14, 2011

Chuck:

I agree with you. I would like to point out that automation of printing should be a given for any company that wants to answer the three questions that I posited, as automation enables printers to get to the market faster, deal with smaller, more target print runs and variable production, and certainly helps reduce the cost of sales. I would even go one step further and say if you haven't begun to automate production and are just looking at auxillary services, your not even in the game.

So yes, I'm in "the manufacturing camp" but I also realize that it's part of the bigger picture and that automation of production is only part of the mix that printers need to put together to compete for the customers advertising and media dollars.

IMHO

-- Jim

 

By Chuck Gehman on Jan 15, 2011

Alin:

Don't think that I'm coming at this idea from the standpoint of someone who is resistant to change, quite the contrary. The company I work for, Mimeo, is a 100% digital commercial printer-- and 100% of our jobs come in over the Internet. We are bringing disruptive change the industry every single day. Check us out, http://www.mimeo.com

I happen to love the "always connected, email addicted, text-messaged, social-media driven world", and I've been pioneering applications of Internet technologies for the graphic arts industry since it was possible to create them!

So we agree up that point of your argument.

Where you lost me is when you say Commercial Printers might be successors to "Marketing gencies". That's just not going to happen, to be blunt most commercial printers can't even market themselves, let alone someone else. It's actually more possible that Agencies might replace printers, because of the increasing low cost of high-speed output devices, and the decrease in the need for skilled labor to produce print. Highly unlikely, but more possible than what you suggest.

While I'm here, thanks Pete for your excellent point. It appears that the the advocates are telling the whole industry to do this, when in fact it is so inaccessible to the vast majority of printers, it's leaving a vacuum of ideas and help for them. I think this point brings a lot of clarity to the discussion.

 

By Alin Jacobs on Jan 15, 2011

It's good to hear back from you Chuck...

Only vaguely familiar with Mimeo, I did go out to your site. While I am most impressed, my take-away is that Mimeo's specialty is web2print.
What I couldn't readily identify is that your company provides marketing strategy development or implementation -- you know, MSP stuff. Did these old eyes miss something?

Your "blunt" statement (your word, not mine) made me chuckle. Since many of my friends are commercial printers, I'm going to try to be diplomatic in what I share. Suffice it to say, in many instances you are absolutely correct, but there is also a whole lot of talent within our industry. And let's not forget the freelancers, consultants, and a powerful workforce of unemployed people eager for the opportunity to apply their skill sets.

Needless to say, neither of us can predict the future. But I do believe that we can create it. Now that's exciting.

Thanks again for the dialogue.





 

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