Are You a Marketer or a Manufacturer? - One of them positions you better for the future By Brad Lena April 30, 2007 -- Ask yourself this question; what is more important to the success of your business, your customer or your customer's customer? Your answer places your business model in one of two camps. If you answered "customer" you are a print manufacturer. If you answered "your customer's customer" you are a print marketer. The difference for the future of your business can be huge. A print manufacturer delivers a product at unit cost. A print marketer influences the content of a product. Which do you think is the better long term business model? A print manufacturer delivers a customer-determined product at unit cost (i.e., a combination of manufacturing efficiency, competitive pressure and market conditions) that is acceptable to the customer. A print manufacturer is reactive to customer demands, and is placed at the mercy of business conditions in which they can, in most cases, exert little influence. A print marketer, on the other hand, influences the design, the objective, and the content of a product. Its cost is only partially based on these elements. Most of the cost accrues to a marketing "deliverable" (i.e., increased sales, customer retention/satisfaction, up sell, cross sell, event registrations, web hits, etc.). This type of product is inherently more valuable to a customer and more profitable to the print provider due to value-added services. Read any business story in The Wall Street Journal, and you will see how a company is achieving growth through a combination of cost reduction and increased demand for their products or services. Make no mistake; print manufacturers reside on the cost reduction side of the equation. Print marketers, on the other hand, reside on the increasing demand side. Stark choices The impact on the printing industry that new marketing channels, digital technologies, mergers/acquisitions, as well as the new alliances between franchised printing and national distributors, has been enormous. It presents printers with two rather stark choices. Either you become one of the best in whatever market niche you occupy or migrate to the increasing demand side. The issue perplexing our industry is managing the migration from a print manufacturer to a print marketer. In reality it is not an either-or decision as the emerging company will be a hybrid of print manufacturer and print marketer. The critical factor is having a coherent and realistic business model that accurately reflects your internal capabilities, human resources, existing products, market reach, prospective products, anticipated customer demand, etc. Acquisitions in digital presses, VDP software, e-commerce, sales, design, or programming talent must be configured to an accurate business model and introduced incrementally. Either you become one of the best in whatever market niche you occupy or migrate to the increasing demand side. Data as Job One The migration process begins, in my opinion, with customer data. Analyzing a customer's database was, more often than not, job number-one when I was working with clients to help them grow sales volume or market share. Many of these companies did not have sharp and detailed knowledge of the characteristics of their clients. It's safe to say that the customer databases of many commercial printers also are not as precise and well-defined as they could be. Without this detailed and precise understanding of the markets a printer serves and why, the emerging print marketer's business model will be faulty and the transition made more difficult than it already is, and it's difficult enough. A thorough examination of a customer database reveals the good, the bad, and the ugly. To build the most precise profile, additional information is often appended. Information such as SIC or UCC codes, sales volume, employee count, type of business (i.e., HQ, branch, subsidiary, etc.), and of course, geographic location. When this information is bounced against billing and profitability records, the value of a customer rises to the surface, and a determination can be made if they meet the criteria of a potential print marketing customer, and if so, what kind of digital or support resources they would require. These slow and unglamorous tasks are of critical importance in the development of a business model guiding the move forward to a print marketer. How well a company moves to the next phase in this transition all depends on how well they map out this initial phase. There's more to this, of course, and I’ll cover that in the next installment. Please offer your feedback to Brad. He can be reached at: [email protected]