Can we have a Marketing Conversation?

Story of the Week

Last week, I had the opportunity to have lunch with one of my clients and his new sales manager. The client is a local shop with a stable print and office supply business. He has two sales people who have hit the wall, and seized the opportunity to hire a recently retired sales manager to reinvigorate the program. I was very impressed with the “new guy.” He’s bright, an easy conversationalist who asks good questions, and he’s coming into the printing business without the usual preconceived notions. He has lots of ideas and has already started turning over rocks to see what’s underneath.

The conversation ranged over several topics, including potential growth areas in the local market. There’s no lack of print competition in our smallish regional market, but also ample opportunity for specialization. We talked about the resurgence of direct mail and opportunities to help small and medium sized businesses with marketing services. I could see the gears turning during the conversation and left the meeting thinking that hiring sales experience from outside the industry is a good decision. (Note: Matthew Parker has written an excellent post about this topic: Why Print Sales People should know Nothing about Printing).

New Sales Manager Discovers Current Reality

A couple of days later I received an email from the owner.  Here’s a synopsis:

John (the new sales manager) has discovered a consulting company that works with over 200 fitness centers. They do saturation mailings in a radius around their clients’ businesses and are compensated with a percentage of the enrollment fees when a new customer signs up. They have a system that works for recruitment and they mail 40,000 postcards per month. Their current printer provides a turnkey package and the cost/piece is $.24 including postage. Predictably, price is THE issue and the prospect isn’t open to further conversation if there are no savings involved.
Catfish, bottomfeeder

The Printer as Catfish?

It’s an old story. Fisherman dangles worm hoping the unsuspecting fish will bite. While it’s conceivable that some unfortunate printing and mailing company is struggling to make this equation work, that’s not the point. Part of the thorny problem that the story illustrates is how quickly printers are cast into the bottom-feeder fish mold, but that’s not all of it. The question in my mind is how to escape the stereotype and shift the conversation away from the price of a perceived commodity. Is it possible? Is it even worth trying?

What are we selling, anyway?

The prospective buyer has a system in place that he believes to be working well. In his mind, he is buying a commodity product and if he can lower the cost his profits will increase. This isn’t a great scenario for the printer. If a local printer accepts this framework, he loses the ability to operate profitably. The sale ultimately goes to the low cost provider who may manage to squeeze a small margin from the job if everything goes well.

This is a sales scenario, but it applies equally to marketing and especially to those who are considering an entry into the marketing services arena. We have to shift the conversation. A good part of the challenge is is escaping the stereotype and the commodity mold. First, we need more information.

Here’s what we know:

  1. The buyer is satisfied with his saturation marketing system for generating new customer leads.
  2. He’s making a commission on new enrollments and he wants to manage his profits by controlling cost.
  3. He’s buying a product and he doesn’t perceive any potential service or quality advantage that would justify a higher price.

Here’s (some of) what we don’t know:

  1. What are the other areas of the buyer’s business? For instance, are there revenue streams for customer retention or reactivation?
  2. Are there other marketing services that are offered to the fitness center clients?  How are they implemented?
  3. What are the plans for additional services?
  4. How does the consultant attract new clients?

While the mass mailing that was dangled before the new sales manager is an obvious loser, could there be other areas where the potential ROI is higher and the specialized services of a smaller printing company might be a very good fit?  For instance, if the consultant is also involved with reactivation of members for his fitness center clients, a personalized direct mail and landing pages might make very good sense, especially if a higher return rate produces a substantial revenue gain. The increased ROI could also justify a price that enables the printer to make a profit.

Shifting the conversation

If we can gain an understanding of the consultant’s objectives, it may be possible to suggest ideas that make good sense. If we have the information, we can help with ideas and also with the math. Let’s consider an imaginary scenario for a reactivation program targeting a smaller database:

Cost: 2000 pieces @ $1.25 ea $2500
Revenue on re-enrollment: $100 each
Break-even conversions: 25
Break-even conversion rate: 1.25%
Net Revenue at 3% conversion rate: $3500

It’s conceivable that a database of lapsed members could be assembled from one or more of the clients, and that the value of a reactivated membership would justify a commission of $100. From the printing company perspective, a price of $1.25 ea (including PURLs and landing page design) affords a better margin prospect, and the conversion rate required for the consultant to break even is only 1.25%. If the conversion rate is 3%, the consultant makes $3500 on the campaign.

To sell marketing we have to talk marketing. The scenario above is an example of a conversation that might happen. Of more importance, it illustrates that marketing discussions should be open ended. They open up lots of “what-ifs” that keep the conversation going. What if we add email to the campaign? What if weight loss data is available for lapsed subscribers? What if we include a significant re-enrollment discount? The shift is substantial – literally from bidding on a product to creating and refining elements of a marketing program that makes sense.

Will It Work?

Rollback SignHere it is in (digital) print for the naysayers. There will always be price buyers. Some people are just Wal-Mart shoppers, always looking for the rollback. From the tone of the email that I received from my client, the consultant they encountered may very well be of that ilk. If so, end of conversation.

The answer to the question, though, is at least a definite maybe, but it’s up to printers to change the conversation.  There are plenty of prospects and customers who don’t fit the price buyer description, but can easily slide into the role when enabled by a conventional print sales approach.  Asking to bid on the next project is one very easy way to convince your prospects that you’re no different that any other printing company in the marketplace. I believe that the marketing conversation has the potential to produce different results.

I also think that the new sales manager will figure all of this out quickly, but the transition for traditional print salespeople may not be so easy. Selling beyond print projects and price requires a change in thought processes and a longer-term focus. Selling to marketers requires a different orientation. It requires digging into and understanding business objectives and marketing plans. For existing accounts, the transition may require development of a new set of contacts or the ability to shift the focus (and the preconceived notions) of current contacts.

If you have an opportunity, ask one of your customers the question, “Can we have a Marketing Conversation?” Let me know how it works out.

I’d really appreciate some feedback on these ideas.  If you have a moment, comment and let me know what you’ve learned about the difference between print sales and the marketing conversation and your particular experiences and challenges. If you’d like to “talk marketing”, please get in touch.  There’s no charge for the first conversations, and we usually generate at least a couple of good ideas.

 


 



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