Mañana Man's Mailbag —DeWese
This is one of those columns where I'm going to reach into the ol' mailbag and reprint some of the letters you readers send me. The idea is that I reprint either all or excerpts of the letters, and then I'll tap into my enormous wisdom and solve the reader's problem or I may have to single-handedly turn around the poor soul's life.
Okay, here's the first letter. I am reprinting it because it comes from a young person who beautifully summarizes a major problem in the printing industry.
*** Hello Mr. DeWese,
I wanted to contact you to let you know that I have been reading your articles for many years. You might find that hard to believe because of the fact that I am 28 years old and in the printing industry. My grandfather and father started this company in 1970 in Tampa, FL, after fleeing Cuba.
After my grandfather passed away, my father continued along with my mother, and grew our company into a very progressive and client-oriented corporation.
I have grown up around compromise. As a company, we will not sell our souls to the equipment and (we) love this industry. No I am not crazy, but I am ambitious for growth—but without manufacturers with deferred payments.
We understand our costs and will strive to keep them low. What I do not understand is why my competition will not. Why is it so hard to understand the 1 + 1 must = 2 principle?
In your opinion when do you see this industry raising its prices? Clearly owners and CEOs must see the rising cost of insurance and worker compensation. Or is it just me? As a young salesman I have already seen every excuse that can come from a buyer's mouth, but I accept it.
What I cannot accept is the massive difference in price. When this industry as a whole spends so much time and energy to produce any job, why do we give it away? What is the fear that we face? In speaking to several different people I realized that we are one of the few industries that drop everything for that sake of the client, but are never rewarded. One of my favorite comments is, "Have you ever seen a cheap lawyer?" No matter how bad they are, they are still $200/hr.
I would like to thank you in advance for you time and to let you know how much I respect your words.
Martin Saavedra Jr.
*** Dear Martin,
Intense price competition spans most of the printing segments. It is especially intense in your general commercial sheetfed printing segment. It is driven first by excess capacity chasing too little demand for the existing capacity. When supply exceeds demand, then prices go down.
Next, the industry pricing problem is exacerbated by the poor management practices found in many companies, large and small. Many owners of undercapitalized companies are starved for working capital. They either don't know or ignore their costs and bid down a job without attempting to gain any sense of the "market price." This happens because they are frantic to generate cash to keep the doors open.
The print buyers, on the other hand, have gained all the power in this excess-capacity market and have come to view printing as a commodity where they can demand price, quality and service from your competitors.
I was impressed with the insight of your letter. It sound like you, your father and your co-workers are survivors and will be around when supply inevitably equals or exceeds demand.
Phew! I hate it when people ask me hard questions. Maybe this next letter will be easier.
*** Dear Harris,
I had opportunity last weekend to catch up on reading that I set aside during the holidays. It included your columns for November and January. And I'm starting to get tired of finding that you've been wandering around in my head when I wasn't looking.
You had the effrontery to urge your readers to actively prospect for new business, and managers to track that activity. The nerve. If your readers actually start taking your advice, then some of them might wake up and make it harder for us to keep growing.
Our company is 60 percent larger in VA-sales than we were when I got here five years ago. We track prospecting activity constantly and both the CEO and I are actively involved in pitching new business. It's enabled us to post two flat years in 2001 and 2002 when nearly everyone else in our market showed declines from 12 percent to 20 percent. We replaced all the volume we lost as a whole lot of magazines ceased publishing from October 2000 to December 2002.
You also had the nerve to raise the issue with your readers of negotiating skills on the part of salespeople. DeWese, you're really starting to get under my skin. We spent 20 hours of training time in 2002 (the second half of 10 of our monthly, all-day sales meetings are devoted to training) specifically on negotiation skills.
As a result, the number of our clients under contract with us is at an all-time high; we have several five-year contracts for the first time in our history, and our largest customer signed a contract with an evergreen clause. If the other ne'er-do-wells with whom we compete wake up to the value of training their salespeople to negotiate effectively, it's going to make my job harder. . . again.
This year's training is on Strategic Account Development (selling to the executive level in our client companies), coupled with an initiative to sell 18 major titles we've identified as key prospects for the year. I'm calling it our Bagging Elephants initiative.
It's February 3, and we've already bagged the first elephant, with decisions on three more due in February. Do me a favor: keep the whole idea of selling above the production manager level the heck out of your column.
Seriously, what you're urging works, and it isn't rocket science. Catching up on your columns was a kick since it underscored just how right is most of what we're already doing. Now, if my competitors who read your columns will just stay in that 80 percent column...
A Sales Manager
*** Dear Sales Manager:
I had to disguise your identity and your company identity because about a thousand CEOs would be calling to recruit you, and you'd never get anything done. You have written a letter that is a much better column than I could have written. Your enthusiasm, your sense of humor and your spirited approach to sales management are quite refreshing.
You never once whined about the weak economy and, instead, bragged about getting stronger during these tough times. Keep doing what you are doing. I'm sure you've got your unworthy competitors on their knees begging for mercy.
*** Dear Mañana Man,
That stupid Everett Hutto has fired me and I need a job. He fired me over that stupid little $105,000 over advance on my sales commission draw account. I told him things was turning around from me and I would make up the shortage in no time. Can you get me a job in New York?
I hear they pay big draws and salespeople get to stay in their big cushy offices and wait for orders to come in. I am broke and will appreciate a loan for a plane ticket and hotel when I get to New York. I'll pay you back as soon as I can.
Sincerely, your biggest fan,
*** Dear Latrelle,
What am I saying? You're not Latrelle Bloodworth. I know it's you, Marvelle Stump. I recognize your handwriting and grammar. Besides, who else would send me a handwritten letter on the Hattiesburg, MS, Ramada Inn stationery? Marvelle, you loser, I wouldn't loan you the money for a bus ticket to Tupelo. For the last time, stop writing me.
To the rest of you, particularly a bunch of salespeople in New York, stop whining about the economy, declining sales and your declining commissions and get out there and sell something!
About the Author
Harris DeWese is the author of Now Get Out There and Sell Something!, published by Nonpareil Books. He is a principal at Compass Capital Partners and is an author of the annual "Compass Report," the definitive source of information regarding printing industry M&A activity. DeWese specializes in investment banking, mergers and acquisitions, sales, marketing, planning and management services to printing companies.