Partnering for Profit --Sherburne
WITH AN uncertain 2009 facing us, it is now more important than ever to diversify your services. One way to do this quickly and affordably is by partnering with others in the graphic arts supply chain. This serves three important functions: 1| Adding the right partner(s) opens the door to new revenue streams.
2| Partnering can get you up and running faster than a “grow your own” approach.
3| A fast path to diversification offers a broader array of services to customers; this differentiates you in the marketplace and creates customer “stickiness.”
Of course, not just any partner will do. The opportunity must be approached in a thoughtful and fact-based manner, beginning with gaining a clear understanding of the services that will offer the most value to existing customers or new target markets.
Just the Facts
The best way to ascertain these facts is by simply talking to your customers. The beginning of a new year is a great time to hold an account review with your top 10 clients. In previous columns and in my book, “Understanding Customers: Building a Customer Service Strategy,” published by NAPL, I have written in more detail about how to plan, conduct and follow up on a successful account review meeting with key customers.
In order to uncover the information we are seeking here, try to schedule the meeting with an executive as high up in the organization as you can. This does not mean bypassing your normal contacts—well, it does, really, but it can be done in a way that does not involve stepping on their toes. Depending on your relationship, you may want to involve them in helping you get the meeting set up.
Keep in mind that the purpose of this meeting is to learn—you are there to listen and not to sell. You want to understand the key issues that are keeping them awake at night, with the goal of finding a way to help them better manage those issues. After 10 such meetings with good customers, you should have a list of what customers are looking for, what is being left on the table, and what is being picked up by competitors that you might be able to address, as well as some brand-new opportunities you had not thought about before.
Now, for the partnering…
In my year-end cleaning frenzy, I came across a book I have had for some time. In fact, it was published in 1995, but still contains some great advice that is as relevant today as it was then. “Getting Partnering Right: How Market Leaders are Creating Long-Term Competitive Advantage” was written by Neil Rackham of SPIN sales training fame, along with Lawrence Friedman and Richard Ruff. It’s available on Amazon, if you want to read the whole thing.
The book identifies three critical success factors that are always present in successful partnering relationships:
1| Impact: The partnership will increase productivity, add value and, ultimately, improve profitability.
2| Intimacy: A successful partnership will be more than a transactional relationship; as the word implies, the relationship must develop a closeness, sharing and mutual trust.
3| Vision: Successful partnerships will share a compelling vision of what the partnership can achieve and how it is going to get there.
Sounds simple enough. Once you have identified potential partners, though, you should go a level deeper to investigate potential viability. Here are some key elements you should ensure are represented in a potential partnership.
• Efficiencies and Economies of Scale. Will this partnership help you to cut costs and achieve efficiencies in some way? Perhaps, one of the needs you have uncovered is the desire to outsource projects from concept through execution. You have a prepress department, but your team has limited design skills. Your options are to hire a creative team, or to find and partner with a design firm that meets the critical success factors mentioned above. In today’s climate, you are likely better served by the latter.
Perhaps you may even end up partnering with one of your customers, deepening and strengthening the relationship to the advantage of both. One firm should take the lead with the account, but both should work collaboratively on projects to leverage the combined core competencies. For example, the design firm needs to understand your production capabilities and limitations to ensure manufacturability. You, in turn, should understand where the design firm really shines in order to bring them in to deals that have the most likelihood of succeeding. This will deliver efficiencies and economies of scale for both of you.
• New Market Value. By combining forces with this partner, will you bring new value to your combined customer base and the market? Now that you have added top-notch design capability to your portfolio through this initial partnership, perhaps the next step is to take on the management and analysis of customer data to help them gain improved campaign results through more relevant and targeted communications.
One example of such a firm is Rochester, NY-based Emerge Partners, an agency that describes itself as “marketing progressives who generate transformative results.” The agency has substantial knowledge about information design and data analytics, and has applied that knowledge successfully in direct marketing, transactional and transpromo engagements.
• Customer Demands. Probably most important of all, is this partnership going to help you better address the customer needs you have uncovered? Clients want strong supplier partnerships that deliver total solutions and best-of-breed products and services. They would often prefer to go to a single source that will accept accountability for the success of the venture rather than negotiating separate deals themselves and having to micro-manage the supplier interaction.
In the scenario that we have been building, perhaps adding a mailing firm or a call center operation to the partnership is a logical step in building a total, end-to-end, integrated campaign management solution for your customers, so that you can literally take their marketing campaigns from cradle to grave. Or perhaps you might choose to partner with another printer that has complementary capabilities or is located in a beneficial geographic area.
It Need Not Be Forever
Also, keep in mind that partnering does not have to be forever. Sometimes, it is used as a stop-gap, while you assemble the internal knowledge and expertise to do it yourself. DME of Daytona Beach, FL, for example, has made quite a business out of producing digital printing for print service providers who wish to get into that aspect of the business, but don’t yet have enough volume to justify the investment in a digital press. DME will produce digital work on their behalf until such time as they are ready to make the move.
Keep in mind, though, that it is important not to violate one of the critical success factors of good partnerships: Trust…If your intent is to assume these capabilities at some point in the future, that should be made clear to potential partners, and a mutually agreeable exit path should be established.
As you consider 2009, think about how partnering could make the year better—for you and for your customers. There has never been a better time. PI
About the Author
Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries. She has written six books, including “Digital Paths to Profit,” and, most recently, “No-Nonsense Innovation: Practical Strategies for Success,” written with Bill Lowe, the father of the IBM PC, which is scheduled for publication this spring. Sherburne can be contacted at Cary@SherburneAssociates.com.