Don’t Buy W2P in a Bundle!

More money is made on W2P by iron hawkers (and the consultants they bring in) from naive PSPs than one might think.  The art of bundling services such as W2P to accentuate and thus increase profits of the overall deal is becoming commonplace.  It’s all part of the “features and benefits” tack of major press and equipment manufacturers and their glad handing salespeople.  PSPs are suckers for iron and somehow they just love to touch and feel samples and papers.  It’s as though they just go stupid when a manufacturer calls up and asks to show them the new model or the new substrate or the new software that will somehow make them filthy rich.

A good analogy is when I go shopping when I’m starving.   First of all, I hate food shopping.  I leave this to my wife and rarely ever set foot in a store unless it’s with my twin boys and we’re picking up a treat or a reward (both are avid athletes).  That’s when we go stupid and buy the Ben & Jerry’s, the chocolate fudge AND the whipped cream.  Knowing that mom rarely buys anything to go on the ice cream, we have to go get it ourselves.

PSPs act the same way when they are coerced by iron hawkers that they are convinced that they cannot buy the press without the W2P package and the mixing station (which will never get used) bundle.  And while we’re at it, we’ll throw in the inline coating unit (for a minor 200K) as this will only increase your monthly nut by $300.00 a month.  One word of advice: PSPs who are in need of more revenue and new customers (yes that’s you), stop shopping for iron!  Better iron isn’t going to increase your numbers one bit.  When your iron is tired and breaking, then and only then should you shop for iron.

And if the iron hawker convinces you that his solution will allow you to print for 20% less than what you’re doing – run for the exits!  The simple answer here is to invest in sales and marketing to find those with need and then go after those whose needs you can fulfill with what you have.  When the additional work begins to overwhelm your current capacity, then and only then do you go shopping for iron.

More sales is the answer.  Don’t buy a system with hopes that you can sell more customers.  Customers won’t buy it and they won’t listen to you.  They don’t care about your iron or its capabilities.  It’s “just a box” to them and it should be “just a box” to you.  Today’s larger companies which bring real opportunity to a PSP have no understanding of the print process and they have little to no concern of how a job is accomplished.  They delegate the task of purchasing print to low level marketing managers who simply want cheaper print in smaller quantities and they won’t buy it because you tout efficiency, capability, quality or beauty.  In their limited experience, they believe that “any PSP with a press can put ink on paper”.  The only criteria they understand is PRICE and TURN!

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Can PSPs Sell W2P Solutions?

A recent blog post on What They Think really sums up the current PSP’s dilemma with regards to their W2P strategy:

Web-to-Print as a Sales Tool: Webinar Sponsored by HP

On November 2, 2012 by Jennifer Matt

Lets move the conversation about web-to-print where it belongs – SALES. Printers need to sell solutions, web-to-print enables printers to wrap value added solutions around their printed products.

My response is posted below as I’m not very confident that  my comment will survive WTT’s moderator:

Jennifer,

I couldn’t disagree with you more. 99 in 100 Salespeople on the PSP payroll cannot spell “solutions”, let alone sell W2P solutions. They are cut from the wrong fabric. W2P Solutions are as foreign to them as PCs are to their pre-press departments. And to their defense, they were hired to sell volume, take orders all while schmoozing clients to further obligate them. The marketplace is no longer about quantity or volume. It’s about convenience and immediate service. While today’s buyer is less knowledgeable today than ever before, their demands are over the top.

Just as PSPs are hyped up at seminars and trade shows to buy overpriced presses and equipment on a “build it and they will come” spin or “if you don’t have it you will lose your client” spin, W2P software companies have assumed the same sales tactics to sell their wares to PSPs. It works on many for awhile, but most W2P purchases end up in moth balls in only a few months.  As a W2P consultant, I know you are familiar with the fact that W2P is a huge undertaking if done correctly. It only truly works when PSPs have existing long term clients demanding a W2P solution. Having vetted dozens of products in this space and deployed on multiple platforms, I can attest to the fact that the viable W2P players are now going after the enterprises clients of the PSPs. They have all but given up on the declining PSP marketplace. There just aren’t enough PSPs out there who will ever get it. Buying iron and selling its capabilities just no longer works. Yet, it’s the only way of operating that they know. Their regional sales staff mindset won’t work with digital on-demand print, low quantities and very low minimums. HP can attest to this. The economy is now global. It’s about just-in-time and only-as-much-as-I-need-now. Quantity is over. The PSPs cannot build globally on a regional framework, mindset and staff.

The market is ripe for a new type of “player”. The new player knows every aspect of the solution from the design of the interface to the back end database architecture. They understand how to build in the cloud or on the floor. They know digital press technology, interfaces and communications. Data asset management, data transfer and version control is a language they understand.  Foremost, their astute business acumen knows the solution proposed must not only satisfy the needs of the least-savvy end user who will log on from afar to use the system, it must also fulfill the complex needs of the executive team. It must bring convenience and efficiency with measurable savings which can be clearly communicated to the board of directors.

She knows what top decision makers in the organization to approach, how to engage with them and how to make sense of such a complex proposal. She knows how to listen attentively to the prospective customer, ask the right questions which convey her investment of time and research in learning their business model along with the collection and retention of her client’s unique needs. She then knows how to propose, articulate, close and then build the solution which will stand the sniff test when examined by every executive in the company. Please introduce to me any people you know at a PSP who have all these skill sets and I’ll hire every one of them on the spot!

As a solutions architect of virtual and physical marcom solutions for national and global clients, I cannot hang my hat on one manufacturer, one software provider or one architecture. Clients come first. We must own clients or land clients prior to build out. And to your point, it’s all about the application, not the technology. Until this new breed becomes a force, hardware and software manufacturers selling on hope and fear will continue to mislead PSPs and continue to marginalize the print industry. The old ways of the PSP are obsolete. They have refused to conform to the new world and it’s only a matter of time until they will be returned to their previous state of being a simple manufacturer, never owning the customer and being completely ruled and owned by the new player who listens to the needs of the customer and thus owns the business. The PSP will resort to the mundane task of putting ink on paper and being ruled by price and turn.

The unfortunate reality is that PSPs continue to take the advice of partisan consultants who are being paid by manufacturers to promote their boxes and software.  These “consultants” take money from press manufacturers and software manufacturers to push their stuff.  A true  solutions provider does not operate like this.  The ad revenues to support trade rags are all from these same manufacturers who are on a  leash by Wall Street’s insatiable greed brokers demanding higher and higher revenue, stock numbers, dividends and higher profit margins.  The fallout is being realized by those PSPs who buy presses without a plan, have sales staff incapable of selling the work that these presses can accomplish and a business model that will never support the new world with its growing demand for less print, less paper, speedy delivery and a just-in-time culture they have been raised in.  It’s the seventies all over again.  Some of the largest companies in the volume print space are filing for bankruptcy at an alarming rate.  Size does not mean stability.  Read Mark Hahn’s target report here (http://targetreport.blogspot.com/).  Static volume printing that survives is going offshore and what is left will be picked up by those who throw the old model away and adapt to a solutions model for their clients.

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Execution & Automation is the new “Value Add”

PSPs have struggled for years to differentiate themselves from their competition.  As a first year MBA student is taught, there are only three positions by which a company can differentiate itself: price, superior service or niche offerings that competition does not produce.  Let’s look at these positions with regards to today’s PSP marketplace:

Price: As the biggest printers have the most equipment with the capability to print the most number of impressions per pass, price is not an option for anyone but the biggest PSP.  The big player’s M & A department is alive and well and going about the business of buying up the book of its competition.  If you consider yourself a small or middle sized player, then price isn’t the option that you can pursue.

Service: Many printers carved out a customer service offering in their past and continue to believe that this is a clear differentiation from their competition.  This rings true for loyal relationships, but not with new prospects. Today’s new print buyer has thousands of options available to them and there is no place for this play any more.  Their perception is “anyone can put ink on paper”.  Seasoned PSPs know this isn’t true, but to battle with procurement or purchasing departments with logic or the customer service play has become a losing battle.  These people answer to the CFO and their motivation is to trim expense either to buy more for less, or buy the same with a smaller budget.  When price is priority one, there is very little respect for any vendor, let alone PSPs.  Thus, the only option left is “niche”.

Niche: The niche differentiator that was sold to the PSP marketplace was big equipment.  The credit explosion of the last 10-15 years created an era that has never before been realized.  Credit was extended to anyone hanging out a shingle in just about any vertical.  Fancy, high capability presses and big equipment became ubiquitous across the PSP footprint.  HP, Heidelberg, Xerox, EFI, Kodak, Komori, Mitsubishi and dozens of others seized the opportunity to entrench themselves deeply into the PSP’s business.  As they discovered how to incorporate automation, color control, CTP and much higher output speeds, they mastered the art of owning the PSP.  For a while, the niche differentiator became the equipment.  Whether it was unique capabilities, low cost output or the ability to produce jobs in record time, the PSP has come to rely heavily on the equipment manufacturer and their advice.  Iron was their niche.

Results: This created a perfect storm to the likes most PSPs had never before experienced.  The “niche” sell by iron hawkers worked on every PSP in the region.  Their view of spending the majority of their budget on the best equipment was to make their lives easier, decrease their payroll, increase their profits all while  outperforming the competition.  All of this backfired.  The PSPs were blinded not from one direction, but from three!  Firstly, the cost of these new machines forced them to have to sell more in order to keep the cylinders moving and thus protect their people from abandoning the small shop for the higher wage big provider.  The average printer resorted to lowering the cost of print thus lowering the overall cost of print to the marketplace. Secondly, as credit was extended to all of their competition simultaneously, it meant that they had no choice but to buy the new expensive equipment or get left in the dust.  And finally, with all of the competition offering pretty much the same print for the same cost, coupled with the convergence of the information age of the Internet on every print buyer’s desktop, commoditization of the industry moved into the fast lane, obliterating any semblance of “value add” by print buyers.  All jobs were now about price and turn only.  If you cannot match the pricing on the Internet, then you lose.

The 64,000 question has now become:  What is a printer to do to survive? Is there something out there that will allow me to differentiate myself from this “price and turn” perception in the marketplace?  What can I do with my company to survive this “race to the bottom” that every PSP is now experiencing?  What is my niche to be?

Defunct Differentiators:  Every press manufacturer and consultant from the old era is selling the old differentiators that are now defunct for the commodity-minded print buyer.  Whether it’s a new capability, a new product that a press optimizes or a bigger piece of paper by which to get more impressions per pass, none of them matter to today’s print buyers.  They don’t care.  Selling them a new fold or new substrate isn’t going to render enough profits for any conventional PSP.  It might work for niche printers who are digital only, but it doesn’t work for the PSP who must move millions through their plant to stay in positive cash flow.  PSPs cannot create a new market.  They are not in the gadgetry business.  They service people who need large amounts of ink on paper.

Real Differentiators:  When industries become commoditized, the only way to differentiate one’s self is either to eat the competition (not an option for the majority of PSPs) and thus take their book or, become more efficient in producing the same product sets with less cost.  This means less cost in payroll, equipment and especially logistics (internal and external).  This means learning about your organization’s inefficiencies and how they can be improved upon.  It means tearing apart your processes and rebuilding them to create better ones.  W2P is but one of those tools one can use to create automation and better execution in producing jobs that otherwise would be loss leaders.  This is extremely disruptive and foreign to PSPs.  We are all resistant to change.  I believe everyone is POLR.  We all pursue the Path Of Least Resistance when it comes to accomplishing just about anything.  It’s the nature of convenience we’ve all been raised in.  This is why many PSPs are using MIS systems from the dark ages, have too many people on payroll and resist having to learn new ways of doing things because, “if it’s not broken, don’t mess with it”.

PSPs have never before had to look in the mirror.  They have been convinced that the solution is in more or better equipment.  The  urge to buy more equipment and buy what the manufacturer is selling no longer pans out. Just as General Motors produces more cars with less plants and fewer workers, PSPs must do the same in order to survive.  I believe the PSP who learns to examine their own internal processes, question each and every one of them, and move towards building programmatic and automatic systems product offerings, will be the only survivor.

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W2P, PSPs and the Enterprise

W2P is a technology that has only been around for about 10 – 15 years. I consider it a tweener.  W2P offerings are all over the place.  (A google search of “web to print” returns about 6,220,000 results.)  Most have been derived not from real life application experience, but from geeks with an idea and manufacturing service providers who need more revenue to make Wall Street happy.  Some purchase technology while others have toggled together their own solutions.  Xerox bought XMPie, Ricoh just gave PTI an infusion of capital to marry Marcom Central to the sale of its machines (to PSPs and the enterprise).   Pageflex and Interlink One are stand alone while EFI has a hybrid offering.

Today’s W2P technology companies pitch “cross media marketing“, “workflow ease of use“, “improved customer service“, “access to new markets” and other incorrect claims to PSPs to get them to buy in.  To all of this I simply reply BUNK!  This is all part of getting the PSP to bite into the apple of hope of more business.  Printers are cut from the fabric of manufacturing.  The only technology they understand is that which either streamlines their internal workflow, reduces payroll and/or gets more ink on paper with fewer passes through the press.  Today’s printer problem isn’t about their internal processes.  It’s about their slumping sales!  The market demand isn’t big enough to keep their presses humming and their debt is growing.  Buying more technology isn’t going to fix that.

Today, there are two targets in the eyes of a W2P salesperson.  The most common is to sell their big ticket item to the PSP.  The second is to bypass the PSP and sell directly to the enterprise customer.  In essence, the W2P companies are frustrated with the lack of sales to PSPs.  They are now bypassing the PSP’s and going directly to the enterprise.  I actually don’t blame them.  They need to make their numbers and the PSP middle market is buried in debt and disappearing rapidly.  PSPs with national or global enterprise customers are today’s only takers for the PSP sell.

The sale to the enterprise is a marketing widget sell.  It’s based on bringing all of the collateral and marcom into the control of the marketing department of the enterprise and moving it out of the manual marketing process between the enterprise and its vendors.  Unlike the sale to the PSP, it pushes things like email blast engines, pictorial fonts, QR codes, direct mail, CRM hooks, PURLs, GURLS and all other types of marketing processes housed under one roof.  Delivery is often PDF to the desktop and eliminates print altogether.  The attempt to control brand dilution is also suspect considering most people who use the system in the field will end up having their jobs printed on a cheap desktop printer or take it to a FedexOffice for higher quantities.  Tell me this doesn’t make a CMO cringe.

In order to sell W2P to the enterprise, the enterprise has to understand the value of W2P and have the staff and/or the budget to build the foundation, once the initial purchase is made.  This is a very long sales cycle for the W2P concern.  Successful sales include up front costs and then their build out. The W2P now can reap huge fees for on-boarding, maintenance, add-ons and upkeep.  The only problem with this model is that the sale is usually made to the marketing department and longevity hinges on how successful the enterprise is and the tenure of the CMO or VP (and their team) who purchased it.  The average life of a CMO is less than 18 months in today’s volatile marketplace. Even if that CMO understands and has a successful implementation, if they move on, no one now owns it and it often simply dries up, gets turned off or just runs on auto pilot to produce business cards.  If a CMO truly cares about the brand, then they will control the vendor selection for output, creating yet another layer of complexity and logistical challenge for her marketing staff.

Neither one of these approaches is going to reap the home run.  PSPs are dying and marketing departments are pushing vendors to do more for less and relying on the vendor expertise to help them execute their strategy.  W2P must come full circle and the firms that marry W2P with the manufacturing components, thus executing the marketing campaign strategies of the CMO, will win.

The true application of W2P is in addressing real business problems.  By itself, it’s not going to bring in more revenue and it cannot be seen as a standalone solution for marketers.

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W2P Advice to PSPs: Part 4 – The Horse, the Cart & The Rider

Your business is shrinking.  Look anywhere and the writing is on the wall.  Your sales staff cannot forecast into next week, let alone the rest of the quarter.  Print is fickle and print buyers are even more fickle.

You’ve been through the digital melee.  You have a digital press.  That just sunk you deeper in debt.  You still don’t know whether you’re making money on it.  You’re now convinced that the platform you’ve been building upon, along with your present staff will not support a profitable digital directive.  You’re also convinced that building value add into your offerings can only happen with digital solutions.  Where do you turn? Your sales staff won’t sell the low commission work.  You’re tired of hearing about how it cannot work from your sales staff, but in a way, they’re right.  You need to keep those expensive cylinders moving on those 40″ presses and your payroll content because there isn’t any young blood coming into the print business.  After all, that’s where all your money is coming from.  Leave them be.

If you’ve read previous posts, you know that trying to pose as an MSP, by selling more marketing services is not the answer.  You’re a printer, not a market consultant.  And you’re now convinced that the advice coming from the typical PSP vendor is not the way to go either.  You’re in need of more revenue at a higher profit margin.  Building solutions and finding customers that will value those solutions  is now your main concern.

To do this is 180 degrees opposite of how you built your conventional business.  You bought iron, you hired print personnel and you then went out and got business to fill up that iron.  Your footprint is regional and your sales force is local. You belong to local organizations for leads and relationships and these are strong, but shrinking as more people vacate printed matter in exchange for online and digitally produced, short run and small quantity jobs.

Your new target:  Your new target is national and/or global.  They have a large footprint and they need vendors to do all of the heavy lifting as their staff is slim and stretched.  They have hundreds, if not thousands of satellite locations spread all over.  They need stuff every day, but it’s minimal and it needs to be as efficient as going to McDonald’s.

Your product offering: Small jobs like business cards, flyers, brochures, sell sheets and training manuals is your new shtick.  Exactly opposite of the types of jobs your sales staff is comfortable selling.  Low quantity, quick turn, warehouse and fulfillment at a minimum, print on demand whenever possible and absolutely no AA or other ala carte charges are to be tolerated.

In order to pull this off, you must find the customer first, then have the framework by which to demonstrate to the customer that you’re capable of handling the work and the load at very little cost (preferably no cost) for development and deployment.  Only one problem, you don’t have the framework and you don’t have the people to demonstrate your capability to meet this type of client’s needs.  You have no horse, no cart and no rider.

Option 1: Buy a company with these capabilities.  Roll it into your corporation.  The order is tall and you’ll most likely spend 24-48 months searching, vetting and traveling to determine who the players are and whether or not they’re competent, qualified and affordable.  This is the longest most expensive shot and requires you find just the right company with the right horse, the right cart and the right rider, on your first shot.  Bring your banker and all your money. (Not an easy thing to do if you’re a traditional PSP.)

Option 2: Partner with a sales entity and become their manufacturer.  Again a tall order in finding a potential partner that has the sales expertise AND the network of C-level contacts.  This option excludes the framework.  You’ll have to scramble and spin to land your first client and hope you pick the right solution partner for the technical piece the first time.  Finding a partner in this space is another needle in the haystack.  Very few exist.  Most are just brokers and don’t have this type of presence.  This is the horse without the cart or the rider.  Most are donkeys or plow horses.

Options 3: Resort to finding the right technical person to build the framework, the process and bring in the staff to support this new direction.  Then hire a national salesperson (good luck in finding a true player) with contacts at national corporations to bring in the business.  This is building the cart and then trying out horses until you find the right one.  Odds are you’ll be several years before you find a thoroughbred and a jockey capable of a championship race.

It’s not easy and don’t forget the role of the trainer (strategist).  It must be a committee of your best people and it must be in place.  If you misstep, you can choose the wrong horse (sales), build the wrong type of cart (framework) which means you lose your rider (technical guru) too.  You must hold your water and go after the national clients.  Unlike conventional print, you cannot be all things to all people.  You must hold out for the big clients.  You must have enough foresight to realize that you’ll have to walk away from the deals that don’t fit.  In essence, you are forced to learn a new language, a new discipline and build a new type of model all the while keeping your conventional business running smoothly.  The two are opposites and you’ll lay awake at night wondering much of the time.  But hey, that’s capitalism at its best.  Disruption is now commonplace.  It’s what pushes us to the next discovery, invention and more profitable business plan.  PSPs have been commoditized.  Reinvention is the only answer other then selling out and closing one’s doors.  That’s an option too, but don’t expect a valuation you can live with now that supply has far outstripped demand in every market.

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W2P Advice to PSPs: Part 3 – Your Personal PSP Evaluation

So you’re in the same pickle as every other regional PSP that has worked hard to build value-add only to see your once loyal clients put major jobs out to bid.  Your estimating workload has now doubled just to maintain the same volume (or perhaps less volume).  Sales staff pushes management to cut costs and lower margins.  They’re scared to death of losing clients and their livelihood.  You need to keep your cylinders moving and you cave to prevent cash flow issues and retain staff.  You are in the top 85% of all PSPs in the country.  Welcome to the “Race to the Bottom” that is contributing to the shuttering of 4.3 printers per day here in the US.  What must you do?

Let’s start with sales.  Like nearly all other PSPs, you work on a draw vs. commission only basis.  Your current sales staff is long-in-the-tooth and not going anywhere.  They don’t make near as much as they used to, but starting over is out of the question.  Trying to find sales talent out there is fraught with retreads, liars and losers.  Brokers are out of the question as they wrote the definition for “disloyal”.  It’s all about price for them and you’ll only get more downward pressure as their margin grows while they drive PSPs out of business.  You’ve attempted to inform and educate on programmatic strategies and W2P to no avail.  As written in previous posts, there is no incentive to sell small ticket, low quantity digital services for a traditional sales team.  What is missing?

Moving your sales staff in the right direction is like entering a pig in a horse race.  It’ll never work.  Stop trying!  You must look outside and realize that it’s not regional sales that you are seeking.  You need nationally focused people/partners who have CXO relationships.  As written in Part 1 of this series, everything hinges on finding the right type of customer first, not building a platform and then finding the customer.  So the picture looks like this:

  1. Your sales staff is not fit for W2P
  2. Your client base is regional and not national
  3. Building W2P before you land clients is fruitless

If this is you, you have two options:

  1. Option 1: As owner of your enterprise, assuming you’re an entrepreneur, you’ll have to pursue this on your own and expect to get little to no help from anyone inside your organization.  You’ll have to find the people/partners who can bring you the customers, assure them you have what it takes to execute and then build systems to accommodate the customers that come to the table.  Not a pretty option.
  2. Option 2: Find people who speak this language and partner with them.  Option 1 inherits the cart-before-the-horse scenario.  Even if you were to locate the right partner/salespeople, what would you demonstrate to the prospective customer?  They want proof you can pull it off and proof you are already doing it!

Remember that this is not going to go away.  You can’t play the ostrich routine until the storm passes.  Your business is no longer applicable to the ever changing and disruptive demands of the marketplace.  It’s shrinking and it’s not coming back.  Option 2 is the most feasible option for nearly everyone who reads this post.  Having to keep your current business running and operating at a profit is a full time job.

What do you look for in a partner?  Watch for the next post in the series.

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W2P Advice to PSPs: Part 2 – Employee Evaluation

PSPs are not in the business of due diligence or evaluations.  Most are small to middle regional players who are being forced into technologies to retain their client base.  This makes them vulnerable to the slick willy salespeople who frequent their establishments. With proper due diligence done by an unbiased consultant or outsider, Most PSPs will find out in short order just how involved a real system is to deploy and the numerous components required to make it work.  If you’re a PSP and you’re not used to hiring outside consultants, don’t dismay.  It’s really not that difficult to take a first pass yourself and save yourself twenty or thirty thousand dollars of wasted investment to find out the same results.

Employee evaluation is clean and simple.  Start with your most technical person.  Do they understand the following disciplines:

    • Wide Area Networking (buzz word “cloud”)
    • Programming Languages including XML, Perl, PHP
    • Database Experience in one or more of the following: SQL, MySQL, Oracle/SAP
    • Ecommerce
    • The various VDP tools used in the marketplace (PageFlex, XMPie, PTI)

In 99.9 of traditional print concerns, you’ll get a glazed look and your technical person won’t have a clue.  That’s your litmus test.  If they do know what these things mean, congratulations, you’re in the 1 percentile.

Just in case you’re not in the 1 percentile of technically savvy print concerns, then you have to look outside.  As you look, remember never to take advice from:

  • Iron salespeople
  • Consumables salespeople
  • W2P salespeople
  • Other printers who don’t have serious W2P clients and investments
  • Digital Press salespeople
  • Paper salespeople

All of these players fit into the “credence goods” category and have something to gain from telling you what makes them money, not necessarily what is best for you.  See this previous post. Remember you start with finding the right clients, not buying stuff in hope of finding clients.

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W2P Advice to PSPs: Part 1 – Customer Evaluation

If you happened upon my most recent post titled the Blind Leading the Blind Leading the Blind, I mentioned that PSPs cannot be retaught and need to either hire or partner with those who truly understand and have real world experience with W2P frameworks and working W2P models.

So you’re a successful PSP.  You know the world is changing and that you’ll need to bring W2P into your environment to reap the benefits, keep existing clients and add new clients. Where do you start?

Step 1: Evaluate your customer base.  Your client base is critical in understanding just how you will implement W2P.  In doing so, you’ll need to evaluate what their projects are, how frequently they occur, how they interface with your company and how large their footprint is.  Are they loyal?  Are they simply buying your services because you’re the cheapest or the quickest?  Maybe they’re buying your services just because of your account team?  If this is true, be sure and determine whether or not your account team is capable of moving into this new realm, or not.

Key: Ideal clients for W2P have unusually large footprints.  They have needs which go far outside a single region.  Remember that W2P is not a quantity business, but can be a high volume business once instituted.  It’s small quantity, on demand and an extremely automated program type of business which will bring a completely different form of value-add into your existing relationship.  But in order to undertake such an investment in people, software, process, equipment, hosting costs, additional IT support and so on, one must have real revenue potential.  If your customer base does not fit into this model, then don’t throw your money away.  If the client demands it, outsource it to a firm that helps in order to retain your client.

Most regionally based PSPs only have qualified national clients because they are located in the same region of that client’s headquarters.  If this is the case, and you are serving multiple regions for that client, then you have a qualified candidate.  If you are only serving the headquarters and they are ordering from other service providers in other regions, then you still have work to do.  W2P is disruptive not only to your organization but can be even more disruptive to your client’s internal processes.  The efficiency of W2P cannot be ignored.  It’s logically much better than manual processes.  That being so, it often eliminates payroll on the client side.  This means that your account management team is bringing solutions that will cause disruption to the client.  This can be a win/win for you and the client, or a lose/lose for both parties if not presented to the correct players at the client.  Future posts in the future will talk about just how to propose W2P to your prospects/clients.

Warning: Don’t fall for the tricks of “growing your business” to bring in new revenue using W2P.  99 out of 100 conventional salespeople are unfit for W2P.  They’ll never learn the language.  It’s just way above their heads.  Just like PSPs, they’ve spent their lives pushing quantity.  They live belly-to-belly with the client.  They don’t know process.  They don’t know technology, and they will not be incentivized to learn it.  There’s no money in it for them.  It’s a hassle and not worth their time nor yours.  Those of you who have exceptions on your staff, congrats.  For those of you who don’t, you’ll need to design and adopt a creative sales plan that meets your W2P strategy once you’ve qualified your client base.

In this series, you will find that sales is key to W2P.  Equipment manufacturers and others will tell you to build out first.  Don’t!  Even when you have multiple qualified candidates, they all have unique business models that may require different W2P models/architectures.  The last thing you want to hear is that the W2P system you implemented cannot serve a client’s needs and you’ll have to invest even more to service your client.  True W2P is very costly to implement and maintain as it requires a different type of employee team not currently under your hire.  You wouldn’t even think about adding another 2 or 3 million dollar press for one new client without a commitment to a guaranteed revenue, so don’t do it with W2P.  There are brilliant people out there running W2P systems which you can outsource your work to without losing the client.  Don’t rebuild the wheel, outsource until the demand justifies your own build out.

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The Blind Leading the Blind Leading the Blind

PSPs start out backwards with digital.  This is solely due to the fact PSPs are subject to the misguided advice (sales staff) of the iron manufacturers.  In the olden days (not so long ago), iron hawkers and consumables vendors (plates, ink, paper) were all given direct access to the corner offices of smaller PSPs and direct access to the GMs of the larger PSPs.  This open access has established a blind trust of these people by the PSP, much like the masses blindly trust the advice of doctors, dentists and lawyers.  PSPs get the latest news from these people as to what the competition is doing, who is buying what types of iron and so on and so on.  That works when you’re investing in iron, but when it comes to W2P, it’s absolutely outside the wheelhouse of these people.  They are the blind leading the blind.

This pattern began with the sales of digital presses over the past 15 years.  Their newfangled and highly unstable machines (small and large models) were introduced to the PSPs as a new means of generating revenue.  Sales staff were taught all the buzz words but hadn’t a clue on what the PSP was in for when he purchased one of these behemoth and faulty boxes for hundreds of thousands of dollars.  They used the acronyms “VDP” and “ROI” and any other thing the PSPs would swallow.  Digital shops sprang up with one box while PSPs were forced to add digital to keep their existing customers.

The presses didn’t become dependable or stable up until about 5 years ago.  This just added to the headaches and more dramatic losses for the PSPs.  He had to send staff for training (additional fees of course), buy supporting equipment and workstations and deal with a different pricing matrix that his estimating program doesn’t support nor does a traditional estimator understand.  He had to increase his physical footprint by putting in a clean area for digital, increase his overhead for electrical and additional storage for new digital papers.  Not to mention the unique bindery needs this new digital model requires for small runs as the PSP’s bindery is only set up for large runs.  This was all to support an unstable product often with severe press down times (sometimes up to 50% of the time).  Uneducated service staff and poor troubleshooting often resulted in days of down time waiting for replacement parts or senior service people to figure it out.

Today, most PSPs are on their second or third iteration of digital presses (depending on how many mistakes they made or defunct presses they bought).  They borrowed to buy the first one, paying high interest, exorbitant click charges and service fees all on top of the principal.  Most took the initial plunge without a single qualified customer.   I refer to this as the sales of “HOPE”.  It’s as goofy as buying a delivery truck and starting a delivery business against UPS or Fedex just because you have a truck!

And the slick willy iron sellers laugh all the way to Morton’s and talk about it over two hundred dollar bottles of Pinot Noir.  Then they show up before the press is paid for offering to roll the unpaid portion into the new deal (further adding to the sunk costs of the PSP).  These big press manufacturing companies make their quarterly numbers all at the expense of the unsuspecting but cornered PSP.

They continue to hit the wall over and over again with trying to increase sales.  The PSP doesn’t know anything about digital, so he turns to the only one he knows might be of help; the digital press staff?

Question #1: What do these people know about selling print?  Nothing!  All they do is tell you about their other successful customers in other markets (not your market). Now the blind press guy, who sold the blind PSP the expensive box with no real customers, is leading  the blind PSPs conventional sales staff on how to sell digital print?

Question #2:  Now that there are all these presses out there and the PSP is already upside down, what does one do to right the ship?

Watch for the next post on how to asses your landscape and how to qualify whether or not you need to build your own W2P framework or partner with someone who already has one in place.

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W2P Software By Itself is Just Another Piece of Useless Expensive Iron

In a recent W2P article, it’s quite interesting that all quotes are by vendors.  Their shortsightedness reveals just how out of touch these vendors are.  Their understanding of W2P along with their incomplete and thus ill-advised recommendations, are the advice of W2P companies attempting to sell their stuff to non-suspecting PSPs.  Absent are any valid success stories or advice from real users or architects of W2P systems who live in the trenches with the real clients and their challenges.  If I weren’t knowledgeable about W2P (which most PSPs are not) I would be led to believe W2P is the great new thing.  W2P is not new and adoption success to date has been dismal.  The last time I had to deploy a system (2009), we vetted 83 companies touting a W2P offering.  Today there are even more as global players are hawking their wares over here (DirectSmile mentioned in the article is from Germany).

The Real Landscape: More than 50% of PSPs who have tried to implement even robust W2P systems (usually from customer demands) have since given up and turned them off.  Most of the systems that do remain online have been relegated to simple storefronts to take in business card and stationery orders. W2P is loosely used and is often thought of as a single solution in and of itself that will make PSPs more successful.  W2P isn’t about the software or the potential of the software, it’s about the technology, the team and the capabilities a true automated W2P system of which the software referred to as W2P is but on piece of the equation.  There is so much more with regards to building a framework that will truly bring in more revenue.  99% of all PSPs do not have the personnel capable of designing, configuring and managing a highly functioning W2P platform and the network required to make it industrial.

Manufacturers Don’t Have to Use their Own Systems: PSPs are too heavily influenced by the manufacturers and vendors who buy ad space in print trade rags.  PSPs have taken  this bad advice from the dark side for years.  Now they are being tempted to invest in W2P products they have no clue about.  The industry has almost always put the cart before the horse by buying in hopes that the clients will come.  Take digital presses as an example.  The majority of traditional PSPs (not solely digital) who have $500,000+ Indigo and Igen digital presses, will confess that they sit idle the majority of the time because the mere existence of this iron isn’t bringing in the revenue in the B2B marketplace.  Most of them don’t even use the presses for what they were told they were good for (variable data mailings, customized brochures).  A colleague of mine once said that “VDP” is the most hyped up and useless, yet effective pitch ever used on PSPs.  PSPs most often resort to using their overpriced presses to appease knee-jerk and impatient customers with partial  static output solely for quicker turns.  In addition to this, the slick willy sales reps of these firms convince the PSP to turn themselves into Marketing Service Providers (MSPs)

Question:  How is a PSP who cannot generate enough work to keep his presses turning going to help his clients with their critical marketing needs? Without real marketing people (not PSP wannabes calling themselves marketers) on staff, their attempts at giving marketing advice to their clients to drum up new business has, and is, blowing up in their faces.  A PSPs marketing acumen is limited to putting ink on paper for God’s sake!

Trade Rags are Catering to Ad Buyers: Read industry blogs or the digital and print groups on LinkedIn and you’ll see validation of just that.  PSPs are grasping for straws.  The trade rags are serving up this new vapor in the form of new software vendors including W2P hawkers.

Trade rags fake their knowledge and understanding of the trade.  They are no better than newspapers who won’t publish anything that might upset their ad buyers.  They  waste dollars on retreads from the old PSP world with too much time on their hands.  These retreads write useless articles and blogs that make the ad buyers feel good, but do nothing for the PSPs.  Most have never lived in today’s new world.  Today’s Print Impressions website list includes articles about strikes in China, time management, printers putting in more iron, the toughness of a bloody pocket folder, green printing awards and RRD’s numbers and profits.  Just what portion of this useless fodder do you deem valuable in growing your business?

This new disruptive movement has moved the focus to technology and automation all the way to the edge, not quality, high speed volume output or newfangled press technologies (sorry Benny Landa but even if your nano press technology was stable today, which it is not, just like the Indigo, it will take more than a decade before serious consideration, let alone adoption).  Deploying this type of technology is way above the regional PSPs pay grade.  With regards to anything that doesn’t come in a box or pre-configured server, they don’t know where to begin.

Today’s PSP’s only hope in deploying real solutions is to find the real customers first.  Just like iron doesn’t generate new business anymore, putting in a piece of a W2P system will not land you more substantial business!  Get the business first – then vet the landscape and put the RIGHT framework in place!

What does this tell you?  The market is no longer about iron or the technology inside the iron.  You cannot build it in hopes that customers will come!  It’s about a new type of sales process, new internal processes, program vs. project based work and new forms of automation throughout the plant.  Today’s new client wants integration of key components all under one easy to use centralized system that is highly automated allowing its employees, partners and external clients to automate the personalization, proofing, ordering, payment, production, fulfillment and delivery of their marketing collateral – ALL WITHOUT HAVING TO PICK UP THEIR PHONE TO TALK TO THEIR PSP!!!!!

The printing industry has been turned on its ear and if this continues much longer with the PSP resisting this movement, the disruption will tear their ears clean off! High quantity static print is dead.  Small quantity, on demand, customized and no minimums is where we are today and that’s not going to change.  No matter how hard you want the old world to return, it’s gone forever.  Stop taking the advice of manufacturers and their marketing ploys.  Iron is not the answer!  W2P software in and of itself is not the answer.  Throw your trade rags out the door until they figure out they need to find real answers for PSPs in generating new business.  Finding new customers, qualifying their needs is key long before you purchase any piece of software or invest in a system that doesn’t fit those needs.

Go get the work first. Qualify the need of your new substantial client. Then hire the architect that can vet and build your system to meet your client needs.  Then you’ll be on your way to truly understanding the W2P landscape.

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