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Empowering Marketing Service providers

november 2013

Strategy: 4 questions you must answer How a properly planned and executed exit strategy pays off Business Insights

So, now you’re an

MSP?

What to expect in the new communications revolution


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Nothing will solidify a relationship with a buyer faster than helping him find a tangible solution, even if you aren’t directly the one.

Publisher mark potter creative director

P2

Publisher’s Thoughts

November 2013

It ain’t 2006 anymore

brandon clark marketing manager taylor knowles MANAGING EDITOR michael j. pallerino ART DIRECTOR brent cashman

Editorial board

P4

Best of Canvas Notes Invaluable

P6

Marketing Insights P12

So, now you’re an MSP?

chris petro GlobalSoft

What to expect in the new communications revolution

tom moe Daily Printing

P18

dean petrulakis Rider Dickerson

Four questions you should ask to set yours

david bennett Bennett Graphics

P22

tony narducci O’Neil Printing

Why a properly planned and executed exit strategy pays off

Strategy

Alas, the Golden Years…

CANVAS P1


Publisher’s thoughts

It ain’t 2006 anymore

R

ecently, someone explained to me that we could no longer lead like it is 2006. When I heard that, I did a double take because it really doesn’t seem like that long ago. It really is crazy how time flies but change may

actually be occurring even quicker. It is difficult to think of 2006 as a long time ago. Many of us had BlackBerrys clipped to our belts, relied on printed directions to get somewhere and generally were excited about our DVD players. In my case, I had two kids who couldn’t talk and now they talk back. Today, I can ask my phone for directions as I am driving, a BlackBerry is just a paperweight and the DVDs collect dust while I watch Netflix on my iPad. That is what has changed in just seven years. That and the graying of my temples. The point is that technology retains an incredible pace and the way we engage the world is radically different after just a few years. So, if that is the case, why are we still utilizing the same kind of strategies and sales models? The world is much flatter and demands more of a horizontal approach. We must collaborate and trust. We must realize that getting into the circle of trust is much more difficult and takes more time and investment. If Apple introduces a new phone or tablet every year and TaylorMade Golf comes out with a new driver, why are we not creating a new model of sales? Why are we still rooted in a model that was born in the Industrial Age, outlived the Information Age and now is just camping out in the Conceptual Age? The organization now must embrace a community. It must embrace it at every point of connection, and it must be remarkably sincere and patient. The times have changed and it ain’t 2006 anymore. So, put down that BlackBerry and toss your old sales model – 2014 is just about here. There is a new model of engagement and CANVAS is here to help. Enjoy our latest issue of CANVAS Digital and have a wonderful Thanksgiving. Warmest regards,

Mark Potter, Publisher

P2

CANVAS November 2013


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Mark Pot te r Follow me @

P4

er markricepott

CANVAS November 2013


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market insights

A snapshot of the trends defining our industry

Here today… The percent of adult social media users who say they have configured their smartphones to automatically include geographic metadata with at least some of their online updates, according to a Pew Internet & American Life Project study. Among these geosocial service users, 39 percent say they check into places on Facebook, 18 percent say they use Foursquare and 14 percent say they use Google Plus, among other services, the study found.

3 keys to managing change in the workplace Change abounds. Perhaps no market knows that more than the printing services industry. Whether it’s new technology, new ways of doing business or a merger and acquisition, how change is managed is the difference maker. Dale Kirke, a learning and development specialist at Thales Training and Consultancy, offers these three steps to help you get a handle on transitions: No. 1 – Communicate rationale behind the need for change The first step of introducing any change is to tell your employees why the change (whatever it may be) is needed and the intended benefits. Make sure you handle and communicate carefully. Allow the opportunity for people to express their thoughts, views and opinions. No. 2 – Implement change in phases Change usually is best delivered in bite-sized chunks when feasible. Most change can be broken down into phases that can be reviewed along the way. Collaboration is key, so if you can, give your employees a chance to transition into the change until it gets fully implemented. No. 3 – Evaluate, review & report on change Carefully monitor the entire change process. People must be kept informed about how things are progressing, the results that are occurring and whether the change has met its objectives.

Look it up –

the Yellow Pages still got it Believe it or not, in this seemingly digital world we inhabit, the print Yellow Pages still dominates the local general services category. In 2012, general services advertisers spent $3.8 billion on print Yellow Pages, representing nearly a quarter of total spend in that category, according to BIA/Kelsey’s “Media Ad View Plus” survey.

P6

CANVAS November 2013


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market insights

Did you know

A snapshot of the trends defining our industry

While men still are less likely than women to use social networks, the gap is closing, according to a Pew Research Center’s Internet & American Life Project report. Broken down by specific networks, women (74 percent) are more likely than men (70 percent) to use Facebook, Pinterest and Instagram, and have similar engagement numbers as men on Tumblr and Twitter. Reddit is the only major network that men are significantly more likely to use than women, the study found.

gems

Web

With 2.4 billion people now on the internet, should we be surprised by any of the numbers we see about what they’re doing? For example, according to Mary Meeker’s “KPCB Internet Trends 2013” report, more than 500 million photos are uploaded and shared every day – more than half of which are on Facebook. In addition, about 100 hours of video is uploaded to YouTube every minute. On the mobile side, the survey says smartphone users check their devices about 150 times a day.

Mobile domination All those heads you see buried in smartphones will be an even bigger sight to behold in the years ahead. According to eMarketer’s latest estimate, nine out of 10 Americans ages 18-44 will own a smartphone by 2017. As for other age groups, findings show that eight of 10 Americans ages 45-54, and seven out of 10 teens (ages 12-17) and seniors (ages 55-64) will own one as well. The findings are based on the fact that individuals will own at least one smartphone and use it at least once per month.

The leaders who catch my attention are those who form points of view, can effectively communicate those views and then put them into practice. – Nokia President & CEO Stephen Elop on what makes a leader successful today

P8

CANVAS November 2013


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market insights

A snapshot of the trends defining our industry

Saw it on social

Executives say medium important voice in technology buys

Just how important is the social media world to today’s technology purchasing decisions? According to Forrester Research’s “How B2B Marketers Use Social Now” report, 85 percent of business decision-makers said at least one social media channel is very important or important when pulling the trigger. Here’s a breakdown of who’s relying on what:

63 47 46 40 36 35 19 19 percent

percent

Forums

Virtual trade shows

percent

percent

percent

Online videos

LinkedIn

Blogs

percent

percent

percent

Professional social networking sites (not LinkedIn or Twitter)

Twitter

Facebook

P10 CANVAS November 2013


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communications

So, now you’re an

MSP?

What to expect in the new communications revolution

W

elcome to the communications revolution, all you brave souls venturing out to find new life and growth opportunities for your printing business. I know it wasn’t easy. Sure, I bet you had lots of those “but-that’s-not-how-we-do-things-around-here” moments to

contend with. But whether you’re already working new service channels or are in the midst of your research, you need customers. So, now you’re a marketing service provider (MSP). In this ever-evolving MSP world, there are two things worth mentioning: Not all print buyers are created equal – Some are part of the creative department (ad agencies, marketing companies, in-house creative services, etc.) that help develop materials and create specs. Some work in procurement (inhouse corporate and brokers). Some have print knowledge. Some have input into the process or use specs they’re given to buy print. And some work in procurement, have no print knowledge and buy office furniture. You just have to figure out whom you’re dealing with and how long they’ve been doing it. Not all salespeople are created equal – When introducing new services, especially if they’re technical in any way, make sure the presenter is the right person, because he may not be the salesperson assigned to the account. Remember

P12 CANVAS November 2013


By Deborah Corn

CANVAS P13


So, now you’re an MSP?

that you’re marketing your ca-

Here are five ways to gear up

pabilities and new possibilities

and approach customers with

at this point, not selling them.

new services and opportunities:

The person you send to discuss things – and how they present

No. 1 – Education

everything – matters.

This is the most important part

Since we’re talking about re-

of the process. You may need

lationships, it’s important to un-

to have different approaches

derstand the customers’ point

and presentations for the dif-

of view. Print producers and

ferent levels of buyers and

marketers deliver new marketing

customers you have. It could

technologies and print opportu-

take several attempts to break

nities. Besides establishing value

through any barriers and skep-

for their employment, these ser-

ticism customers may have,

vices also help establish value for

especially the more advanced

the employers who must retain

who believe they have heard

clients being pressured by their

and seen it all. Practice makes

companies to bring that “wow”

perfect. If you can’t market

to the table. If one agency can’t

your own services, how can I

do it, another can. If you can’t

trust you to help with mine?

help, another MSP will.

Start small and hone your pre-

With today’s marketers consistently challenged to deliver on

sentation before reaching out to your big fish or going after others.

digital, social and mobile, how print fits into this mix can fall into

No. 2 – Partner Up

a grey area, especially if your

Do you know who has divisions of people dedicated to teaching

customers don’t know how they

the world about new opportunities with print? The same people

can all work together. MSPs have

who need us to keep printing (i.e., press manufacturers and pa-

an amazing opportunity now to

per companies). I have seen some amazing marketing presenta-

help customers draw that line,

tions and case studies from these companies over the last two

but you must be prepared first.

years. They’re eager to share new opportunities for printers to grow their business. Call your reps and find out how you can work with them to present new opportunities and technologies to your customers. Having these people at your side not only increases your street credibility with buyers, but it also helps reiterate that you aren’t in it for a fast sale.

No. 3 – Partner Up 2.0 Even the big guys rely on smaller companies to help them, especially when it comes to technology. If you’re going to position yourself as an MSP, be the hub for as many services/solutions as possible. With some good research and solid third party agreements, you can create a list of partners for your customers to

P14 CANVAS November 2013


choose from to incorporate these technologies into their print materials and marketing campaigns. You don’t need to be the expert on such things; you need to be the resource. Nothing will solidify a relationship with a buyer faster than helping him find a tangible solution, even if you aren’t directly the one.

No. 4 – Bring It If you have the opportunity to get in front of your advertising and marketing customers to discuss new opportunities, bring something substantial to the table. If you don’t, the next company will. If you’re

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So, now you’re an MSP?

Nothing will solidify a relationship with a buyer faster than helping him find a tangible solution, even if you aren’t directly the one. coming to show me a QR code

That means investing in your own print-based cross-media cam-

on a postcard and say, “Look,

paign to market your new services, printing on new substrates and

it scans to a website,” please

sending samples, and creating personalized materials for your cus-

stay home. If you’re coming

tomers to experience firsthand. Buyers receive a lot of junk, so more

to show me a QR code and

generic information is of no relevance to them. Be confident and

the data that was captured

show them what you can do.

through the scans, show me

I know people aren’t always receptive to suggestions about

what other data capture was

spending money to invest in the future, but they all bite that bullet

possible, how to use the col-

at some point. And I know what you’re saying, “We don’t partner

lected data to personalize the

with third party vendors who can steal our clients.” But remember:

next contact with the recipi-

They need you for print just as much as you need them for digital.

ent, what type of personaliza-

It’s about teaming up with the right company. If you start with the

tion is possible and share the

press manufacturers and paper companies, and partner with their

results. If you do, your custom-

partners, there is no incentive to harm you.

ers will have something to take

My friend and mentor Pat McGrew M-EDP, CMP, consistently is

back to their companies and

reminding me to crawl, walk and run before I leap. That’s my ad-

customers. You don’t have to

vice to you. You can’t take the fast lane when it comes to reposi-

be the QR/data expert if you

tioning yourself and the services you offer. You can’t expect your

have a partner.

customers to instantly get it or push them just because you’re ready. You need to prepare to take them through the process

No. 5 – Walk the Walk

growing your relationships and communication along the way,

The best way to show your cus-

bring others to the table that can help you add value to your

tomers what’s possible with

business, and get really good at taking it slow before you and

print is to show them – literally.

your customers are ready to jump into the fast lane, together.

Deborah Corn, PRINT BUYERologist™, is the Intergalactic Ambassador to The Printerverse at PrintMediaCentr, an industry speaker and blogger, and a contract Print Production and Integrated Project Manager at PrintProQuo providing 24 years of experience in print production and advertising agency management. She is the founder and cultivator of Print Production Professionals Group on LinkedIn, and host of the weekly #printchat on Twitter. Deborah also works behind the scenes with printers, suppliers and industry organizations helping with their cross media marketing and social media endeavors.

P16 CANVAS November 2013


Opportunity

Four questions you should ask to set yours

“If you don’t know where you are going, any road will get you there.” – Lewis Carroll

S

trategy. The word conjures up some distinct feelings. Some of us, the more operationally or action-oriented, think

of hours in off-site meetings, eating stale doughnuts with warm coffee and discussing four quadrant charts littered with “post-it” notes with an overpaid facilitator. Surely there are better places to be. And here’s the worst part – nothing ever comes out of

these meetings. And there are those who look forward to these meetings. It provides an opportunity to get away from the day-to-day grind and reflect on what must be done. You hear things like, “These meeting help everybody get on the same page.” Unfortunately, whatever you feel about off-site gatherings, the strategy meeting remains a “squishy” subject – one that is poorly defined by most of us. And here’s the kicker – we can’t delegate or outsource our attendance in the meetings. Let’s step back for a moment to truly define what “strategy” is so we can better take advantage of its premise. Truthfully,

P18 CANVAS November 2013


By Greg Coticchia

CANVAS P19


Strategy

whether you believe it or not,

That’s important. If a market is too small, it cannot absorb the risk

you have a strategy. Whether

or pay out the reward we expect as participants in that market.

it is working or not is another

Remember, there is only one thing worse than no customers –

issue. Explicit or implied, we

that’s one customer. So think big.

all have one. So, what is strategy really?

Question No. 2 – Where will you compete?

Over the years, I’ve heard

Next is where you compete. Map out the marketplace and make

lots of definitions. Several

sure you understand your products’ positioning in that market-

years ago, I was in a meeting

place. That’s a good idea. The answer to where you will compete

with an ex-CFO who was dis-

comes down to segmentation. You can’t be everything to every-

cussing strategy as it related

one. You must have real clarity on your customer.

There is only one thing worse than no customers – that’s one customer. So think big. to startups. He provided the

I suggest using the basic positioning statement outlined in

best definition of the word

“Crossing the Chasm” by Geoffrey Moore. It includes:

I have ever heard. The basis

• For (target customers)

of his definition centered on

• Who must (solve a specific problem)

the following four questions,

• Our product is a new (product category)

which help break the meaning

• That provides (key breakthrough benefit versus current way of

into four distinct parts. 1. How attractive

doing things – which solves dilemma) • Unlike (competitor in new category)

is the market?

• We have (whole product most relevant for you)

2. Where will you compete? 3. How will you compete? 4. What is the

Here’s a good exercise. Have your team that is in charge of strategy create the positioning statement separately. Have them

financial impact?

bring it to the meeting and read the outline. You may be shocked by any differences and similarities. Next, create one you all can

Question No. 1 – How attractive is the market?

Question No. 3 – How will you compete?

Attractiveness

measured

This is an attempt to answer, “Why us?” I believe it should

by, “Is it large enough?” –

be framed with two more direct ones: “Why do we deserve

with large being defined by

to be in business?” and “What would our customers do if

aspects such as market size,

we weren’t in business?” While these questions may sound

growth and profitability. Large

harsh, they cut to the heart of understanding how your com-

markets can absorb a lot of

pany will compete in the market. When thinking through how

mistakes. And, inevitably, they

you’ll do that, address the classic four Ps: Product, Place, Pro-

allow us to make mistakes and

motion and Price. You can do this separately and together.

“win” our share of the market.

Are you competing on price? Do you have something unique

is

P20 CANVAS November 2013

agree to and move forward.


in the market? Is your uniqueness valued by your prospects?

Strategy doesn’t have to be

Are you saving them time? Money? Are you adding to your

a squishy subject. It can be fo-

prospects’ unique capabilities?

cused and hard-hitting. In the

Think through your advantages and disadvantages. Get some

words of Winston Churchill,

clarity around them. Don’t list 10 or 20 items. Just find one or two

“However beautiful the strate-

that give you a competitive advantage.

gy, you should occasionally look at the results.”

Question No. 4 – What is the financial impact?

Each one of these areas can

What is the expected revenue and associated profit from your

have clear, measurable metrics

potential investment? If you know your market size and oppor-

to see if you’re succeeding and/

tunity, and who your customers are or will be, you’ll know how

or failing. Even the most results-

to compete. You’ll know if the risk is worth the reward. You won’t

oriented among us can see if

need accountants, spreadsheets and hours of analysis. What are

time spent on strategy is time well

the number of customers you can capture? What do you think

spent. Think about these ques-

they’ll pay for your offerings? As a result, what revenues do you

tions as you plan your next strat-

think you’ll gain? How much will it cost you?

egy offsite address with clarity.

Greg Coticchia is an award-winning technology executive with more than 25 years experience in high-tech products and services. Recently, as CEO and co-founder of eBillingHub, he grew the company from inception to establishing it in a leading market position that led to its sale to Thomson Reuters. He currently teaches both business-to-business marketing and entrepreneurial leadership at the University of Pittsburgh’s Katz School of Business.


business insights

exit strategy • by Al Reijmer

Alas, the Golden Years… Why a properly planned and executed exit strategy pays off

O

ver the past year, we have spent time with

provided them the opportunity

Valley Graphic Media (VGM) owners Sam

to execute their own exit strat-

and Margaret, as they reviewed a number

egy – not someone else’s. With the assistance of an

of strategies relating to their exit strategy. For more

M&A consultant, Sam and

than 40 years, the duo spent their lives building and

Margaret located and negoti-

nurturing their printing services company. Their trials and tribulations can be found on the pages of the February, April, June and September issues of CANVAS Magazine.

ated the acquisition of VGM to a printer in a neighboring state, less than three hours away. But that’s only part of the story. What happened during the mutual analysis of each other’s organizations provided them cause for excitement and a base to creatively structure the terms of the sale. As it turned out, the existing management structure of the buyer and the complimentary services of both companies was the basis for a dynamic combination, whereby both organizations fully anticipate a

Their ultimate plan was to select an exit strategy that best suits their needs and ultimate goal for a secure and comfortable retirement.

result that will exceed the sum of the parts. If you recall, VGM was in serious need of updating their primary 40-foot 6/C Offset pur-

The (fictitious) VGM is not unlike the thousands

chased in 2000 and their digital platform, which

of printing companies that have faced absence

was installed in 2004 (visit www.thecanvasmag.

of family or internal succession opportunities,

com to read the February issue of CANVAS).

the dramatic economic downturn of 2008-2010,

The $400,000 to $600,000 down payment,

and the vast changes in the credit and lending

coupled with a monthly payment of $40,000

environment throughout the industry. Neverthe-

to $50,000, was more than Sam and Marga-

less, their management acumen and discipline

ret could afford or justify, especially since

through both the good and challenging times

they were just beginning to evaluate their exit

P22 CANVAS November 2013


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business insights

strategy options. Their acquirer updated and

exit strategy

•T  he complimentary capabilities of both facilities

expanded their offset and digital platforms in

will serve each sales department in attaining

2010 and 2012, and also added narrow web

work not previously attainable, i.e., the eventual

flexo and wide format inkjet.

result will exceed the current revenue of each

Unlike VGM, the suitor has no shortage of

organization combined (sum of the parts).

potential succession options with four children, and multiple nieces and nephews actively in-

• After reviewing past job quotations at both

volved in sales and management positions. This

facilities, there will be cost savings of at

would become very valuable in the future, as

least 5 percent on a minimum of 20 percent

VGM will be a stand-alone acquisition, requiring

of the work analyzed.

senior management positions after the eventual departure of Sam and Margaret. As for Sam and Margaret’s previously mentioned excitement, they are selling to liquefy

• Intellectual capital – Sam and Margaret will provide additional and necessary mentorship to the future succession candidates.

With the assistance of an M&A consultant, Sam and Margaret located and negotiated the acquisition of VGM to a printer in a neighboring state, less than three hours away.

The final terms of the acquisition include a three-year agreement for Sam and Margaret to remain serving both organizations, with extension options per mutual agreement. As an incentive to maximize the combined result

their investment in VGM, but they’re not retir-

of the two facilities, Sam and Margaret together will

ing just yet. After several discussions, the buyer

receive an annual bonus based on the overall net

soon realized the value that the couple could

profit increase of the combined organizations.

bring to the overall organization. While he has

A year ago Sam and Margaret never thought

plenty of family to serve as potential succes-

they would sell their company and simultane-

sion candidates, they still are too young and

ously be excited to remain in the game, albeit

inexperienced to assume any senior positions

just a few years longer. They look forward to as-

at this point.

sisting and mentoring the future successors of each organization, something they had hoped

Sam, Margaret and the buyer all agree there is enormous opportunity in this acquisition based on numerous factors including: • There is less than 3 percent overlap in sales revenue between both companies.

to do with their own children. Needless to say, exit strategies can follow many paths, and one size does not fit all. Sam and Margaret believe that their exit strategy fits both of them very well.

Al Reijmer is a partner at New Direction Partners (NDP), a leading advisory and management consulting firm that specializes in the printing, packaging and allied graphic arts industries with an emphasis on mergers and acquisitions. You can reach him at areijmer@newdirectionpartners.com. Visit New Directions at www.newdirectionpartners.com.

P24 CANVAS November 2013


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Canvas Magazine | So, Now You're and MSP? | November 2013