Mailing & Fulfillment — Five Steps to Become an MSP
WHEN I owned my own fulfillment center in the Dallas area in the ’80s and early ’90s, I wondered why printers were not embracing mailing and fulfillment services as an extension of their business.
Actually, I was looking over my shoulder, dreading the time when the giant woke up and understood the importance of these ancillary services to the growth of their businesses. Fortunately, the introduction of new technology and Web-based products kept the majority of printers busy enough not to infringe on our sacred mailing and fulfillment territory.
There were some printing industry innovators, such as Jim Schultz at Great Lakes Integrated and Gary Garner at GLS, who had the vision and understanding to pioneer the adoption of mailing and fulfillment services into their printing companies. These companies have reaped the benefits of their entrepreneurial efforts and are continuing to grow at a rapid pace. In addition, they’ve set themselves apart from their competitors by changing their value proposition to the client.
So I pose these questions concerning the new industry buzzword—Marketing Services Provider (MSP). What is the definition of a Marketing Services Provider? How do you know when you have achieved the MSP status? How do you get to be an MSP?
Before presenting answers to these specific questions, it is important to understand some background on the development of the Marketing Services Provider company description. Since assuming my position as director of fulfillment services for MFSA four years ago, I’ve concentrated on educating mailers and printers about the virtues of fulfillment and why they should get into the business. Even back then, we stressed that diversification and coined “Solution Selling” as the buzzword. We have now embellished that description of diversification to a higher level and call it “Marketing Services Provider.”
The adoption of fulfillment services has been enhanced by the fact that 81 percent of printers have adopted fulfillment at their client’s request. Printers have been forced into the industry by the needs of their customers. This market reaction is consistent with the marketing value chain, which I have proposed for many years, and shows that each marketing initiative follows the same and predictable path:
• Marketing Requirements,
• Data Collection and Management.
Simply stated, the marketing value chain identifies the support elements of each and every marketing initiative completed by marketing departments. There are two keys to note in the chain.
First, print is the first element after the creative process is completed. (Printers have always been the first outside vendor in the chain, which was the reason I kept looking over my shoulder for them to take control of the fulfillment industry.)
Second, every program has data collection and management as the foundation of the initiative. It is also assumed that companies that can offer all marketing support services in the chain have a better chance of competing for the business. The obvious advantages to offering complete services are reduced time to market and reduced costs, as well as marketing personnel only having to deal with one vendor, one contact and issue one PO for the entire job.
The primary benefit to the printer is account control. Every print order is subject to competitive pressure, but it is very difficult to find a true one-stop marketing services shop.
However, it may be that this approach to the MSP answer is too limited in scope. Jonathan Margulies, director at the Winterberry Group, recently presented an enlarged marketing services value chain shown above. This new chain provides a broader scope of services required by marketing organizations and increases the types and amount of services that could potentially be offered.
The model also includes some of the services we have been pulled into by our clients in the past several years, including variable printing, e-mail blasts and personalized URLs with landing pages. This new and expansive model has creative, strategic, data management and customer support elements new to the value chain model. Margulies advises to stay close to your core competency as you add new services, which is consistent with my original value chain model.
Now that we’ve engaged in background discussion, let’s get on with answering the questions at hand.
What is a Marketing Services Provider? A printer is considered to be an MSP when it provides additional services to a marketing department and procures that business from someone in the marketing organization other than the print buyer.
So, by this definition, many printers are already considered MSPs, but don’t know it. However, the long-term goal of penetrating and controlling a marketing organization will be driven by the sophistication of the service offering and whether the printer has mastered the art of establishment selling.
How do you know when you have achieved the MSP status? This was alluded to in the previous answer, but several other factors have to be considered for your company to be awarded this designation.
The first factor is with whom you are dealing. If you’re talking to senior marketing executives, you are at the right level in the organization. The second factor is what is discussed during the conversations with these executives. If you are discussing marketing strategy—and not printing—then you are firmly in the MSP world. Focus should be on how to improve the marketing operation and performance, and not how to get more print jobs.
The third factor is your understanding of what goes on in a marketing department for mid- and large-size corporations. To gain such an understanding, study the diagram shown on page 70, which was configured by Peter Winters of the Winters Group & Associates. Consultative selling, which is required for most services after print and mail, has a large element of empathy selling. Therefore, it is essential to understand what goes on in the marketing department and to empathize with the problems of marketing executives.
If you are successfully providing printing, variable printing, Web-to-print, e-mail blasts, mailing, fulfillment and personalized URLs in a system for the client, you have become an MSP.
Here’s a five-step approach to becoming an MSP. While market conditions will determine the sequence in which you might add services, this would be an ideal order for you to approach the MSP goal.
1) Add Mailing Services. Mailing services are the easiest to add to the service mix, because mailing is viewed as an extension of bindery functions. If possible, it should be co-located in the bindery. The business model for mailing is similar to printing and can be managed with existing print software.
The equipment is no more sophisticated than current printing and bindery gear, and can be absorbed easily into production processes. The only additions to the organization will be some new software to prepare the mail and a person knowledgeable in U.S. Postal Service regulations and mail preparation. This person can be educated internally or recruited from the mailing industry.
There has been a reluctance by some printers to add this service because of the low revenue experienced from mailings—many times less than $1,000. However, by adding mailing services, the printer learns how to handle data with records and not graphic data. It starts the value chain/account control cycle. Furthermore, the addition of the next step will most certainly require the printer to add mailing services.
2) Add Variable Data Printing Equipment and Web-to-Print Services. These services are an extension of the commercial printing industry and, while the copies may be generated by utilizing toner rather than ink, it is still basic printing that fits within the basic framework of the company’s operating system.
The addition of a digital printer and software, which provide the capability to produce color variable printing combined with Web-to-print utilities, elevates the printer’s usefulness to marketing departments and allows the printer to provide support in one of the basic fulfillment applications: lead inquiry fulfillment. Some variable printing project sales are transactional, but many are programs that require the addition of sales personnel who are data savvy and consultative. You may need to add a specialist from outside the organization to assist in this sales cycle.
3) Add Fulfillment Services. Most printers are already completing fulfillment projects, i.e., assembling kits and shipping to multiple locations. However, the real goal of the fulfillment organization is to establish fulfillment programs with clients. These programs require the management of inventory for one or more years and the purchase of a fulfillment operating system.
One of the traps of this adoption sequence is that many printers think Web-to-print software is capable of managing a fulfillment program. We have not reviewed one such package to date with a warehouse management system capable of managing inventory for the long-term. Adding fulfillment programs also formally introduces the need to understand establishment selling and the differences of a service business model. Mastering this function will provide the organization with the necessary sales and marketing skills to move forward with additional services.
4) Add Related Marketing Services. Many printers have already entered into the modern marketing era and are offering e-mail blasts, PURLs and associated landing pages. These services will continue to be adopted by marketing departments to improve their prospecting skills and to provide valuable performance feedback metrics. They usually only mean the purchase of new software and will have the added benefit of requiring the printer to become proficient in database management, hygiene and utilization.
Although we have been adding data components as we progressed through the steps, it is at this juncture that a printer will really turn the corner from a production-centric to an information-centric company.
5) Add Creative Services. This is a difficult step for many printers because they have built their businesses on relationships with creative and advertising agencies. However, we have found that very few agencies see the direct marketing business and the need for great databases in the same manner required to totally assist clients. We, therefore, recommend that a printer approach this market from a direct marketing creative standpoint. It may be necessary to partner with existing clients, but the delivery system, expertise and account coordination need to reside in the printer’s organization.
Please e-mail me at tquinn@MFSAnet.org if you think your company meets the MSP goals I’ve outlined, or if you want to discuss how to get to the next step.
I wish you good selling. PI
About the Author
Tom Quinn serves as the director of fulfillment services at the Mailing & Fulfillment Service Association (MFSA).