Marchand--Segmentation - Man of Many Words Finds One
Never known for brevity, I am thrilled to be able to reduce to one word my marketing advice for the new year now upon us: SEGMENT.
Life is observably complex. A walk in the woods, a stroll in the mall, a visit with a client in a downtown high-rise—they all reveal diversity and the complex relationships that affect our lives. So I intuitively mistrust reductionist approaches to difficult matters. They tend to oversimplify. Still, I say to all you printing sales and marketing managers, segment your customer and prospect lists.
It's true: My teeth are set on edge when I see brief guides to self-improvement or sure-fire paths to business success, whether they promise to take pounds off my waistline (yes!), grow hair on my head (no need there) or make me a tycoon (via 12-minute management techniques, the seven principles or the six secrets of the successful). Nevertheless, and despite my mistrust of programs that make difficult matters seem very simple, segment your customer and prospect lists, then target your marketing to each segment. (Wow, this keeps getting longer every time I repeat it.)
OK, so I haven't really reduced to laconic simplicity the advice I have for printing executives. Read on; it gets more complex if you stay with me through the following paragraphs. But it's fun to have gotten the idea down to one word.
What is Segmentation?
Your capabilities, products and services have certain commonalties. They are defined by the equipment you run, the kinds of products you produce and how you work with customers. Executives working in production-oriented industries know this so clearly that it hardly seems worth discussing. They have a short-hand that allows them to quickly describe their companies. Just eavesdrop when printers meet at GRAPH EXPO or a similar trade show.
"We run narrow web flexo label equipment . . . matched five-unit half-webs with finishing lines plus five- and six-color 40˝ sheetfed equipment . . . produce brochures, magazine and mail inserts . . . T-1 lines and ISDN capabilities . . . we're a high-end sheetfed house . . . do short-run annual reports, corporate identity and capability packages … digital prepress . . . fold and stitch . . . and end-to-end digital workflow."
A jargon only those who initiate it can understand. When I first heard it spoken, I wondered why customers weren't included in the shorthand. Who do these companies print for, I thought? What are their customers' industries? Are there any commonalities among them? Do they have any shared special needs (beyond wanting it fast, good and, oh yes, at the lowest price)?
I thought these were production executives talking to one another. Then I learned that sales managers (job titles didn't include marketing in those not-so-long-ago days) and CFOs use the same lingo, and they are also not quick to include references to the customer base in their shorthand descriptions. Why?
The answer is easy. Industries that require heavy capitalization and sustained reinvestment are inevitably focused on production. The more so when they are often less than a generation removed from their craft roots. (How many owner/operators of substantial and often successful companies first worked as strippers or press operators—often just 20 years ago?) The answer may be easy, but the focus is dangerous when it excludes an understanding of markets at least as detailed as the emphasis on production.
It is irresponsible, even absurd, to suggest that a heavily capitalized and usually debt-laden company can turn away from considerations of plant and equipment to follow the whims of the marketplace. But that is not the alternative.
Customers must be understood not only one-by-one, but also segment-by-segment. There are marketing consequences that must be addressed to each segment.
Here are eight examples:
1. What are the production and buying cycles of each segment? (When is the best time to direct our marketing and sales efforts to companies in given segments?)
2. How are printing and related services bought? (To whom should we direct our efforts—designers, print production staff, buyers, operations executives?)
3. What are the expectations, now and in the short-term future, for digital capabilities and job-
related communications? (File transfer, data management, the Internet, e-mail.)
4. What are each segment's needs for upstream and downstream services? (Forecasting, mailing, inventory management, fulfillment.)
5. What is the dollar volume of printing dollars spent by each segment in the region served by your company? (What growth potential does it have for your company? What, then, is the appropriate size of marketing and other investments to go after additional business in given segments?)
6. Who are your competitors in each segment? How do you stack up against each? (What are the implications for the segments chosen as growth targets?)
7. What is the language or terminology used in each segment? (A simple example: Preprint, insert, flyer and supplement are terms for the same product used in different retail segments and in various locales.)
8. What marketing communications should be used and how? (Publicity in a segment's trade publications, direct mail, etc.)
How to Segment
There's no mystery here. Break down your customer and prospect lists by segments, defined by SIC code, geography, size and printing/service needs. You'll discover commonalities that will enable you to market and sell more effectively. Just as important is the information you'll acquire, enabling you to evaluate proposed investments better than ever before.
Segment—become market-driven and production oriented. Maybe not one word, but still sound advice for your sales and marketing efforts in 1999—a year that I hope brings you continued success and increased prosperity.
About the Author
Jacques Marchand may be phoned at (415) 357-2929. His firm, Marchand Marketing, provides strategic consulting services, research, market planning, segmentation, lead generation, positioning and marketing communications to help companies in the printing industry increase sales. Send e-mail to email@example.com. Information about the firm's work for clients is also available on its website, www.marchand.com.